Last Updated on December 29, 2021
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.
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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.
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.
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
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Dr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over nine years of experience publishing news analysis, research and financial product development. Connect with him via Twitter or Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 3000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter what the market condition is!! Watch the first lecture for free! One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
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