Heard of the old adage “do not put all your eggs in one basket?” I was asked why my investments and income streams span across multiple mediums and disciplines.
Aside from the fact that I just have a diverse set of interests, I strongly believe in diversifying, whether investments in the stock market, real estate or building and establishing multiple streams of income elsewhere.
Although highly unlikely, the Internet may suddenly blow up, the local real estate market may dry up, or the city where the business exists in which I’ve invested may go bankrupt, anything can happen at any time. Diversifying is critical to hedge against unforeseen circumstances and maintain a balanced investment and business portfolio.
If you are going to work hard creating multiple passive streams of income so that you can own your own financial destiny and enjoy financial freedom instead of being at the mercy of your employer, why would you even take a chance of losing control of the life you have designed for yourself?
Today I urge you to revisit your portfolio and evaluate whether you are diversified enough to sustain the temporary ups and downs that any investor and business owner encounters throughout the lifespan of their investments and businesses.
If the answer is no, I urge you to learn about ways you can further diversify to reduce your exposure and maintain maximum balance. If you are strictly invested in the stock market, consider other options such as precious metals, real estate or investing in a small business locally.
Think about ways you can generate other streams of passive income relatively easily by duplicating previous efforts. For example, if you have a successful website online that generates passive income for you, replicate the formula and establish another website in another niche.
If you have a rental property that has been profitable for you, consider investing in another one in another city nearby. The key is to diversify, and one way to do that is by expanding. When one well dries up, you can count on the other to provide you with water.
Diversifying is not just for your stock market investment portfolio. It is for anything that involves risk, or exposure to unforeseen circumstances and uncertainty. So stay on the safe side and diversify your investments and income streams as much as you can.
Are you diversified enough to where you do not worry too much about your exposure?