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Multiple streams of income: How to create them & why it’s smart

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One of the most popular TV shows of the last decade was Breaking Bad. The critically acclaimed program told the story of a high school chemistry teacher who enters the lucrative, though dangerous, world of manufacturing methamphetamine following a diagnosis of terminal cancer.

Many of us can relate to Walter White’s dilemma in that we don’t make enough from our primary job to get all that we need or want. Most of us need multiple streams of income. Even if you don’t feel that need today, at some point you’ll discover the importance of diversifying your income sources.

Advantages of creating multiple streams of income

There are a number of practical reasons to have more than one stream of income. Here are three you should understand today.

It’s there in the event you’re unemployed

Whether because of a layoff, business failure, or termination, most people will spend some part of their career being unemployed.

If you think unemployment benefits will cover you, think again. They also provide a fraction of what you made in your job. Plus, you don’t receive them if you’re fired for cause.

Having multiple streams of income before you become unemployed takes much of the sting away from losing your primary income source. That, in turn, means you don’t have to just take the first job offered to you out of desperation.

[ Related: What to do when you suddenly find yourself unemployed ]

You can build up your savings with secondary sources of income

Saving money is critical to financial stability. Yet it’s a discipline most people lack.

One of the easiest ways to save money is to have multiple streams of income. You can use your primary paycheck for your living expenses, then bank all the money you earn from secondary income sources.

This money can add up fast, giving you the funds necessary to buy a home, save toward retirement, cover emergency expenses, or all of the above. Plus, the more money you can save, the less you need to rely on credit cards and other debt.

Secondary income can become primary income

Many of us are always on the lookout for a way out of the 9-to-5 corporate grind. We want flexibility, freedom, and the enjoyment of doing work that engages us.

For many people, that escape hatch forms from a side hustle or investment opportunity that started as a secondary source of income.

How to create multiple streams of income

You can make extra money in a number of ways. Don’t worry. None of these ideas will get you in trouble with law enforcement or drug cartels like Mr. White.

Use your skills

Most of us have skills that other people don’t have and are willing to pay for. It may be in your chosen profession. Or it may be what you studied in college but can’t find a full-time job doing.

Maybe you’re a writer, software developer, graphic artist, or marketing specialist. There are a number of freelance websites where you can find potential clients. Take on as many projects as you can fit in your schedule and make extra cash while doing it.

Full-time teaching may not pay enough, but tutoring or working as a part-time adjunct professor at a local college can pay off without much time investment.

Or perhaps you have more technical skills such as carpentry. Ever considered flipping homes, where you buy a run-down property, fix it up, then resell it for a profit?

If you have selling skills, but don’t want to do this work full-time, there are plenty of opportunities to do so on a part-time basis. You don’t want to rely on commissions for your primary income, but what about a few nights and weekends a month selling insurance or real estate? You just need a license.

Make money from hobbies and interests

If you’re a well-rounded person, you have interests outside of work and relationships. These are activities you may do to relax and unwind. Some of them could also turn into income.

For example, Etsy has become a unique marketplace for handmade items, vintage goods, and craft supplies. If you quilt, bake, or make your own organic lotion, you could sell your creations using an Etsy account. If you like to hunt estate sales and auctions for rare antiques, Etsy, and other websites are a great way to resell those items for profit.

Creative people who write, paint, sculpt or take photographs can make a little extra money selling their creations and/or entering contests with cash prizes.

If you enjoy sports, one way to make extra money is to become a high school sports referee. Getting booed by parents and yelled at by coaches may not sound like an enjoyable activity, but referees can make good money. They are also in very high demand because of a nationwide shortage. If you’re good enough, you could move up to officiating small college and junior college, where the money is better.

Find out how to become a licensed sports official by contacting your state’s high school athletic association or the National Federation of State High School Associations (NFHS).

Don’t forget about basic side hustles

Driving for Uber and/or Lyft is one of the easiest jobs to get into. The only requirements are having a driver’s license, valid insurance, a clean driving record, no criminal history, and a four-door vehicle that is clean enough and runs well enough to provide a comfortable ride. You can work as much or as little as you choose. You can also choose your hours, though to make the most money you will want to be available during the busiest times in your area.

If you have a spare room in an apartment or a full house you can rent for a night or several days at a time, you can make extra money by making that space available on Airbnb.

Or if you’re not afraid of needles, you can make money donating plasma. You can earn between $20 and $70 a week. Private centers typically allow you to donate twice in a calendar week with at least one day between donations.

[ Related: 10 practical side hustles ideas to make extra money ]

Invest in income-producing assets

Many people think of investing as saving for the future. But you can also invest in assets that produce regular income.

This type of income stream isn’t for everybody, as it typically requires a large upfront investment. And as with any investment, there’s the risk that the asset’s value could decrease over time.

But if you have a large sum of cash you don’t need and want to produce regular income, here are a few assets to consider:

Rental property

You can buy a house or multi-resident property and rent to tenants. Keep in mind that to make this profitable, you must consider your debt payments on the property, plus taxes, maintenance, utilities, and insurance. You also have an asset you can later sell.

Real Estate Investment Trusts (REITs)

A REIT is like a mutual fund, only instead of owning stocks or bonds, a REIT owns shares in real estate properties. This is an ideal investment for people who want to invest in real estate without the headaches of managing properties. What’s more, REITs are legally required to pay out a minimum percentage of income as dividends to investors.


Many people own plots of farmland that they lease to farmers, who grow, harvest, and sell the crops. There’s no labor on your part; you just have to find a farmer looking for extra land to farm.

Dividend-paying stocks

Many companies pay a dividend to shareholders based on their quarterly profits. You can purchase shares in a mutual fund that invests in dividend-paying stocks. While many investors reinvest the dividends to buy more shares, you can also keep the dividends as an income stream.


A bond is a loan made by an investor to a borrower, either a business or a government entity. Many bonds require a periodic payment, called a coupon, to the investor over the term of the loan. These payments can be a source of income to the investor.

Bottom line

With all of the above ideas for income streams, keep in mind that you must report all income when you file your taxes, even if you don’t receive a tax form from the income source. Some types of income are reported differently than others, so you may need to consult a tax professional.

The information and content provided herein is for educational purposes only, and should not be considered legal, tax, investment, or financial advice, recommendation, or endorsement. Breeze does not guarantee the accuracy, completeness, reliability or usefulness of any testimonials, opinions, advice, product or service offers, or other information provided here by third parties. Individuals are encouraged to seek advice from their own tax or legal counsel.

— Published December 11, 2020
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