Diversifying your income in these hard times
10 April 2019 FINANCE
By Nomali Cele
Is it side hustle time?
Diversifying your income seems inevitable in these economic times. Money is not going the distance it used to and each year brings with it a set of new responsibilities and deductions. In order to meet the monetary demands, most Afropolitans find ways of diversifying their income.
These are people who already have a steady income in terms of full-time work or a business and they decide to add another income stream. The new income stream isn’t exactly something that’s poised to be their future full-time job or only source of income. But if it’s something that works and solves a problem now, it’s the perfect fit.
Diversifying your income – Look at your skills
When you’ve decided that diversifying your income is the way to go, the first place you should look for potential income is your skillset. What are you good at? What can you do well but don’t need to earn any new accreditation to do it? You can consult with small businesses or give extra lessons to matriculants or university students. Now look at your skills, what’s your thing?
Diversifying your income – You don’t have profit from your hobbies
It’s one thing freelancing as an accountant and another labouring to knick hundreds of items a week in order to sell at the fortnightly farmer’s market. The latter will lose its lustre quickly because you have gone from just enjoying knitting or writing or taking photographs to having to do it because it’s something that’s now bringing you money.
Diversifying your income – Is your work still first?
If your side hustle or efforts to make extra income are encroaching on your work, your employer might have a problem with that. Contrary to popular evangelism, not everyone can have a sustainable business and not everything that shows a little bit of profit needs to be turned into a full-time business.
Remember your job is what pays most of the bills. It’s what keeps the lights on and your side hustle merely allows you to buy one nice light fitting. Keep your bread and butter, your full-time job, a priority at all times.
Diversifying your income – Finding balance
It’s all too easy to get carried away when you find yourself doing a lot of things. You can easily go from working on your side hustle a few evenings a week to working every free moment you are not at your 9 – 5 job. This is unsustainable and can lead to burnout.
Remember to dot your I’s and cross your T’s
It’s not just about making money, you also have to make sure you are keeping your admin in order. How will your new income stream affect your tax returns? Look into that and make sure you are staying compliant.
For new freelancer Neo Khanyile who’s working in artist management, the legal of things was a learning curve. “I do struggle with following up with payments,” he says. He recommends having a written agreement for those times people start ducking and diving.
“A good idea is to do a standard contract for yourself and whoever you’re freelancing/contracting for if they don’t give you one.” For Khanyile, this contract has specifics regarding the following:
- Start and end dates,
- Payment date(s), and
- Job description
This piece of paper is important because as he says, “if anything starts going funny, you have a legal, enforceable document to refer to.”
Have you started diversifying your income streams? Tweet us your tips for beginners using #KayaOnline