5 Great Ideas How To Increase Your Income
As Warren Buffet said, you should “never depend on a single source of income”. Following this wisdom, we explore the key ideas on how to increase your income.
Firstly, in our 20s and 30s, we tend not to earn so much however, promotions and job changes leading to salary increases are quite frequent. Then when we reach our 40s, things start to stabilize. This is when we reach the peak of our earnings, which has a flattening effect on our salaries. If you haven’t thought about additional sources of income earlier, it is about time in your 40s to go and seek them to keep your income growth going.
Here are our top 5 favourite ideas for income growth:
1. Negotiate a salary increase
Some of us thrive at this, some find the idea of salary re-negotiation dreadful. While it might not seem like a pleasant task, you should definitely consider this option. You wouldn’t be alone. According to Indeed’s research 63% of Londoners were planning to ask for a pay rise in 2018! And bear in mind the UK job market is currently very buoyant, so it’s the perfect time to ask
If you have never done this, research and prepare yourself – it’s not that hard! You might even enjoy the process. 🙂 Glassdoor.co.uk has many useful articles on this topic from general guidelines on how to negotiate your salary to exact wording – what to say during a salary negotiation.
2. Find a side hustle
The idea of generating passive income has gained popularity in recent years. There’s tons of online information. We have listed our top 3 favourites:
- 50 Ideas for a Lucrative Side Hustle – Entrepreneur
- 7 passive income ideas ANYONE can try! – mamafurfur blog
- Discover the world of apps! You can capitalize on many ideas offered by apps – airbnb for renting out your spare room, drivvy for making extra income with your car, fiverr for small jobs ….
3. Invest In Real Estate / Rent Out Your Spare Room
Take advantage of the possibility to rent your spare room or even let out the whole property while you’re on vacation. Just to give you an idea: a single person renting a small flat in London pays £20-60/day.
In case you have spare cash lying around – consider a buy-to-let investment to generate passive income. Caution: calculate your ROI carefully. To generate passive income here, the monthly sum of all costs plus mortgage repayment must be less than your net income from the rental (after-tax). Observe property market movements, with the possibility of an upcoming recession or Brexit in the UK, property prices could crash and therefore present opportunities to buy cheaper.
4. Earn passive income through investing in the stock market
There are 2 ways you can earn from investing in the stock market:
- Buy low, sell high or as Benjamin Graham says: “ The intelligent investor is a realist who sells to the optimists and buys from the pessimists”. This idea involves risk as it assumes that you can time the market and understand short-term pricing trends. A great deal of market understanding and luck is involved in it.
- You can hold stock which pays high dividend yields. Experts say, aim for 4-6% or higher to generate additional cash flow through dividend payments. Avoid companies paying lower dividends. It is important to understand that stocks paying high dividends have naturally growth rates. Hence, don’t count on steep price increases.
If you have more interest in this topic – check out our 7 ways of investing money you can benefit from.
5. Start your own business
The last of our ideas on how to increase your income is starting your own business. Have you got a business concept? Why not pursue it? The UK government leads you through the most relevant aspects of setting up a business step-by-step.
The Bottom Line
Most millionaires have actually 7 streams of income:
- Earned income – from your job
- Profit income – from buying & selling
- Interest income – from lending money
- Dividend income – from owning stocks
- Rental income – from renting a property
- Capital gains – value increase of your assets
- Royalties – income from others using your work
With our ideas on how to increase your income, we have covered most of these wealth stream types. Now it’s your turn. Take a step towards your dreams. Every day closer.
Check out our blog for more resources on financial planning, passive income streams and money in general.