Mitigate Risk
Diversify your income
We’ve all heard the saying before, “don’t put all your eggs in one basket”, yet most of us end up doing exactly that. We get one education, one job, and hope it will carry us into ‘financial freedom’.
Yeah, that’s the equivalent of investing everything into one stock simply because everyone else is.
If you’re an investor, you know that’s one of the riskiest mistakes you can make. So why do we treat our careers any differently?
Diversification
Having only one income stream is extremely risky. Losing that job means losing your primary source of income, and if you become tired of that role, replacing it only brings you back to square one.
The best way to minimize the risk of major losses is through diversification - avoiding dependence on a single source. This way, if you lose a stream of income, you still have others to fall back on.
Here’s what your professional portfolio should look like:
Day Job
Working a day job isn’t a bad thing. If you enjoy it, then why leave?
However, if you don’t enjoy it, don’t leave without a plan. Use it as a foundation while you build something better.
As I write this, I’m working a job I’m losing interest in. But as mentioned, don’t put all your eggs in one basket. Scatter the risk. Build before you leap.
Personal Projects
If you have an idea you’ve been thinking about, consider how it could create value and generate income.
It only takes one idea to change your life.
Personally, I’m drawn to digital products. If done right, selling the invisible can cost almost nothing to create while providing value to thousands.
Investments
Having your savings in the bank protects your money, but it also limits its potential. Investing allows your money to grow over time, though it comes with risk.
To keep investing simple, consider using Wealthsimple’s automated portfolios. Choose a risk level you’re comfortable with, stay consistent, and let time do the work.
It all starts with the day job, but it shouldn’t end there. Your paycheque is more than income - it’s the seed that can grow into greater financial freedom.
Compound Habits
The compounding effect can be simply explained with a rolling snowball.
The snowball starts small - just like your initial investment (the principal). As it rolls downhill, it collects more snow, causing it to grow larger. The larger it becomes, the more snow it collects. This repeating cycle is the power of compounding.
This principle applies far beyond investing. It works with your career, your business, your relationships, and any area where small, consistent efforts build upon previous progress.
In The Wealthy Barber, David Chilton recommends investing 10% of every paycheque. I’d like to expand on that.
In addition to investing 10% of your income, invest 10% of your free time into learning. Use that time to develop the knowledge and skills needed to strengthen your job, personal projects, or investments.
The secret isn’t making one massive leap - it’s making small, consistent contributions that compound over time.
The Two Obstacles
Let’s be realistic: this all sounds exciting, but whether you’re building a side project or investing your money, meaningful results usually take years to develop.
It could take 2-5 years before you begin to see truly significant returns. But here’s the thing: any career takes years to build and develop anyway.
You’re in the long game regardless.
So, to make sure you start on your feet, here are the two obstacles you will consistently face on this journey:
Tailoring
Your professional portfolio is your platform, and it should reflect the industry you want to enter.
Before you take the first step, you need to be grounded. You need to know yourself, your product, and your market, then tailor your portfolio accordingly.
You don’t need absolute clarity, but enough to give you direction. As you gain experience, your message becomes clearer.
How will you know when you’ve found it?
When you can answer, “Who are you, and why should I listen to you?” in two sentences.
The Mind
Nearly every challenge you face begins with a battle between you and your mind.
It will doubt you, tempt you, and question whether you’re capable.
But every time you challenge those thoughts and hold your ground, you slowly reclaim control over your mind.
So, what’s the method?
Friction.
View difficult situations as opportunities.
Every challenge is an opportunity to strengthen your mind.
A neglected mind creates a neglected life. A disciplined mind creates a disciplined life.
Like a knife, the sharper your mind becomes, the more effectively you can cut through obstacles, overcome challenges, and shape your future.
Ending Notes
Freedom isn’t found by having more money.
It comes from expanding your horizons, pushing your limits, and creating more options.
One of those options is building a diversified income.