Why a second income is important! Why you have to start now!

Published: March 2, 2019 at 10:23 am

Last Updated on

Most of us at some point or the other would have told ourselves: “how I wish my income was higher!” The reasons are obvious: high expenses, EMIs that we can almost drown in, the fear of not investing for our goals etc. Why just dream about it? In this post, I agree that a secondary source of income is important for most of us and why we need to start now.

Today if we talk about second income, making money online seems to the first choice especially among younger folk. Yes, the internet is a crucial component in making money online or offline today. Most of the wannabe bloggers, affiliate marketers, drop-shippers and Youtuber with dreams of making Lakhs each month are (much) less than 30. Sadly, most them are astonishingly clueless about how to get started, making the perfect prey to digital marketing gurus.

No, I am trying to say, I will show them (or anyone) how to make money better and they are the not intended audience of this post. I am writing this for those with 10-15 years of work experience. Practically of them would have picked up direct or lateral skills related to their jobs and I think they should seriously think about how to make money out of this.

This article is not for those who want a second income immediately and therefor not meant for the younger audience mentioned above. I am referring to building a second income that will bear fruit 5,10 or 15 years from now when we need it the most.

Why a second income is important for everyone

Viewers may have seen this video recently:

We all need to be multi-crorepatis by the time of retirement. Crorepati is no longer a dream, it is mandatory. Therefore:

  • A secondary income will supplement income from our retirement corpus, act as a cushion
  • If we could not invest enough, we could live off the secondary income for a few years
  • It will keep us busy and not pester our spouse or children after retirement–something we can wake up to do
  • One can always do something for free to keep busy, but it will not suit everyone money is a good stimulant for many
  • Hopefully, such an engagement will keep us healthy

Why we need to start work on a secondary income today

  • If we start today, we will have an established service by retirement. That much time is necessary
  • The secondary income would not be small then. It will be small now and that is perfectly okay!
  • Do not put pressure on yourself – that you need the second income immediately!

Many young people make this mistake. Instead of learning new skills and using it to make more money, they look for shortcuts and give up when they fail. If equity investing needs patience, secondary income generation requires a lot more patience!

How should I build a second income?

Your work experience must have taught you skills on which your current income depends on, directly or indirectly. Make a list of those. Out of these, what would people find useful and pay for. That is a natural starting point of a second income.

Why a second income is important! Why you have to start now!

Since time is on your side, you can consider learning a new skill (something that you always wanted to do) and then hope to build an income from it. Whatever you choose, the lower your expectations of success, the more successful you will be.

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Series on secondary income creation

This is the second part of a series on a second income creation.

Part 1: Eight ways in which websites make money

Part 2: this post

Part 3: If you want to a start a blog, do this first! (coming soon)

Part 4: Two types of making money online and why you need to choose before starting (coming soon)

Video version of part 1

Video version of part 2

Also watch fresh content from freefincal on YouTube

 

 

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Pattabiraman editor freefincalM. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin Pattabiraman has co-authored two print-books, You can be rich too with goal-based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management. He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice.
He conducts free money management sessions for corporates and associations on the basis of money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association. For speaking engagements write to pattu [at] freefincal [dot] com

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