Three Paths to a Higher Income
Here are three paths you can take to boost your income.
1. Use Income From Your Day Job to Buy Assets
Most of you reading this have a day job. You work 40-ish hours per week for an employer and receive a paycheck for your work.
The first, most straightforward path to boost your income is to use some percentage of your paycheck to buy assets.
Assets are things that pay you. Examples include stocks, bonds, REITs, websites, or anything else that puts money in your pocket simply for owning it.
Suppose you earn $4,000 per month after taxes. If you use $2,000 to buy shares in a stock index fund with a 3% dividend yield, you will get paid $66 each year just for owning those shares. That’s $5.50 each month.
Now, instead of earning $4,000 per month, you will start earning $4,005.50 per month.
The more assets you own, the more dividends you’ll receive. If you continue to buy assets each month using income from your day job, your monthly income will continue to increase.
2. Build Your Own Assets
Along with buying assets, you can simply build your own.
One example of an asset you could build is a website. Two years ago I decided to build my own personal finance website called fourpillarfreedom.com. Now, each month I earn money from that site through ads and affiliate links. Last month alone I made over $1,600.
I also built statology.org, a statistics educational site, which I hope to monetize over the course of the next year.
There are virtually no barriers to entry if you want to build a website. You simply purchase a domain name, a hosting plan, and start writing content.
Granted, it can take well over a year to earn a single dime from a website, but for those who are consistent and patient, a website can turn into a wonderful income stream.
Websites aren’t the only examples of assets you can build, though. Consider Dave from Accidental FIRE, who sells graphic designs online. Each month he earns $300-400 from selling his designs online.
The best part of all is that he only needs to create a design one time, upload it online, and sit back and wait for people to purchase it. As he continues to build up his online inventory, his income will likely continue to increase over time.
Building assets can be a great way to create your own income stream. The one drawback is that it often takes months or even years to see the payoff from building your own assets. But if you’re patient and maintain a long-term perspective, this isn’t a problem.
Personally, when I feel impatient and wish that I could earn income faster, I think of this quote from Steven Pressfield in Tribe of Mentors:
“I’m 74. Believe me, you’ve got all the time in the world. You’ve got ten lifetimes ahead of you. Don’t worry about your friends “beating” you or “getting somewhere” ahead of you. Get out into the real dirt world and start failing.”
3. Provide a service
The third way to boost your income is to provide a service. Often people refer to this as a “side hustle” since it’s something you do on the side outside of your day job to earn extra income.
There are hundreds of examples of people earning extra income outside of their day job through providing services.
Personally I earn $40-50 per hour tutoring college students in statistics.
Jennifer Chan, a full-time lawyer, found a way to turn freelance writing into an income stream.
Kenzi from Kenzi Writes was able to turn freelance writing into her full-time job.
Kevin from Financial Panther frequently earns over $3,000 each month with side hustles like Airbnb hosting, Rover dogsitting, and DoorDash food delivery.
Young FIRE Knight found a way to earn over $300 per month charging electric scooters.
Millionaire Dojo earns hundreds per month selling items on eBay.
There are countless ways to earn income outside of your day job. Test out many different side hustles, see which ones are worth your time, and commit a few hours each week to working on them.
I personally use all three of these paths to boost my income. I invest 50% or more of my paycheck each month from my day job as a data scientist into stocks and REITs. I also work on my site fourpillarfreedom.com for a couple hours each morning before work. And I tutor students in statistics whenever opportunities arise.
By using these three income path, I’m typically able to earn $1,000 or more each month outside of my day job. I encourage you to use a combination of these paths to boost your own income.