3 Clever Ways To Diversify Your Income For A Rainy Day
Job Security Is An Illusion, Quickly Assess Your Financial Future & Consider 3 Clever Ways To Diversify Your Income Online Safely & Reliably For A Rainy Day!!
- 1. Why Do You Need To Diversify Your Income?
- 2. Financial Security – Your Self Assessment
- 3. Income Diversification As Your Contingency Plan & Essential Underlying Concepts
- 4. 3 Clever Ways To Diversify Your Income Streams
- 5. Income Diversification First Concern – Gambling
- 6. Income Diversification 2nd Concern – Security
- 7. Diversify Your Income – Conclusion
Why Do You Need To Diversify Your Income?
It’s obvious, that you feel financial uncertainty. Even if you don’t, it’s better to have at least sense of urgency to diversify your income. Why? Simply you need a Contingency Plan as your financial safeguard.
Income Inequality – Gini Index
Let me share a bit about World Income Inequality measured by GINI Coefficient. What is the Gini Index?
Wikimedia Commons visualize the world GINI index by country as below;It looks the advanced countries are more equal than the emerging countries. However, this data is relatively old (2006) and the important trend is that the gap between the rich and the poor is becoming wider & wider not only in the developing countries but also prominent in the advanced economies represented by USA.
World Inequality Report 2018 indicates;
Top 1% vs. bottom 50% national income shares in the US;
Importantly, the middle class has been most squeezed;
Clearly, the Middle class where majority of us belong to is decreasing more and more and many of middle class people are facing the risk of dropping into low life. Nevertheless, you may say “I have a daily job and earn enough money for living. Thus, I don’t need to work more for second source of income”.
However, let me stress that we live in uncertainties. Actually, 1 in 7 workers were made redundant during the last financial crisis (2008) in the UK. Remember the impact of the recession in the UK was relatively mild among the developed countries. Only 20% of people made redundant could find a new job within 3 months, and 75% of them are paid less in the next job. This is the harsh reality, and economy is cyclical and bubble will burst at any time out of the blue. It means your life is always exposed to the threat of loosing job.
Still not convinced? Allow me to substantiate how middle class should feel a pinch and sense of urgency with further numbers & different perspectives.
Middle Class Is Really In Danger
World Inequality in Wealth Distribution
The above World Inequality Lab report says;
▶ Rising Wealth inequality within countries has helped to spur increases in global wealth inequality. if we assume the world trend to be captured by the combined experience of China, Europe and the United States, the wealth share of the world’s top 1% wealthiest people increased from 28% to 33%, while the share commanded by the bottom 75% oscillated around 10% between 1980 and 2016.
▶ the continuation of past wealth-inequality trends will see the wealth share of the top 0.1% global wealth owners (in a world represented by China, the EU, and the United States) catch up with the share of the global wealth middle class by 2050.World Inequality Report 2018
So, assuming that the current trend as business as usual continues, the projection of the middle class wealth will be stagnant / declining.
Tax & Social Benefit – Not For Middle Class
Needless to say, the welfare benefit is for the lower class. The principle of the below US case shown in the chart applies more or less to many developed countries. And, people in the middle class will shout “How come someone earning $36 an hour can have a lower household income than someone earning $8 an hour.”;
So, lower income class people are protected by social benefits, therefore you as the middle class tend to be most squeezed.
Uncertainties You Will Face
Uncertainty and fears of social decline and exclusion have reached the middle classes in many societies. The uncertainties in middle class especially in advanced countries attribute to the gloomy job market as follows;
Globalization – Job Outsourcing
The IMF report (Finance and Development, A quarterly magazine of the IMF Vol.45) indicates the massive income transfer to poorest 30% population is happening, means advanced countries job are being outsourced to the developing countries. The higher the income inequality less positive toward globalization, in other words, the globalization spurs the inequality by squeezing middle class jobs.
Technologies – Robot will take over your job
Oxford University research summarizes (for details), among 702 occupations in 12 categories of total US employment, nearly 70% is at high to medium risk of getting replaced by robots over some unspecified number of years perhaps a decade or two. As seen from the chart, the unlikely job is high-end skill oriented job, which is another reason the middle class should worry. The middle class is In the Vulnerable Status.
The Latest OECD Report Confirms Middle classes losing out to ultra-rich
BBC summarized the latest OECD report by saying “the middle classes are being “hollowed out”, with declining chances of rising prosperity and growing fears of job insecurity.” It shows Middle Class Dismal Growth as;
– Across OECD countries, which include most of the big economies in Western Europe and North America, the 10% of highest earners have increased their income by a third more than middle earners
– In the UK, more than a third of middle-income households “report having difficulty making ends meet”, says the OECD
– In the United States over the past three decades, the top 1% of earners have increased their slice of total annual income from 11% to 20%
“Middle incomes are barely higher today than they were 10 years ago,” says the analysis.BBC - Middle classes losing out to ultra-rich
It confirms middle-class households feel a sense of “unfairness” and are “increasingly anxious about their economic situation”.
Financial Security – Your Self Assessment
Your Income Status Assessment In Your Society
Firstly, examine How Accurately You Grasp Your Income Status In Your Society.
Wherever you live, just assess your Income in comparison with the rest of the population in your country and know the difference between What You Perceive & Reality. Clicking OECD , which will navigate you to the below page; Does your original perception match the reality? And, if you’re fortunate enough to be in the Top 1 % of Income, you may not need to assess further.
However, if you belong to the rest of 99% population, then you may want to assess how you are secured for your retirement.
Spare Another 1 Minutes To Assess Yourself Further for Your Long Future!!!
Let’s Examine How Well You’re Ready For Your Retirement
Go To Fidelity Retirement Score, answer 6 simple questions then you will get the retirement score like below. The underlying assumptions (inflation, social security & tax etc) of this software is based on US parameters thus your condition may differ though the objective here is not making an accurate simulation but just trying to roughly assess how well you are fit for your future retirement life. Therefore don’t take it seriously. If the score doesn’t reach On Target, it’s a sort of indication that you may need to improve some factor(s). In any cases, it’s said that you need the contingency savings worth at least 6 month salary. Otherwise you will be in serious trouble when unwelcome event such as job loss actually happens to you. Unless you’re happy-go-lucky person, it’s better to start making fast extra money conveniently e.g. Online, as your Safety Net. Yes, Diversify Your Income For A Rainy Day while you have a daily job.
Income Diversification As Your Contingency Plan & Essential Underlying Concepts
We’d better prepare the Contingency Plan through Income Diversity. Needless to say, income diversity is cultivating more than one source of income. Means making extra money in multiple streams so that you aren’t at the complete mercy of one set of circumstances. This is all about creating your Safety-net. Well, I know, Easier said than done. How To Do It. Different people have different opinion & idea, and there are many “10 ways to make extra income” posts in internet. However, people often find most of them difficult to continue, because I personally feel they don’t satisfy the below 3 basic underlying concepts for multiple income sources:
1. Don’t bother your time so much
Assuming you have daily job, thus extra income should come from side earning (otherwise it can’t be an Extra income). It should not negatively affect your main-stream work. Whatever you do it will be competing for your time, attention and resources. We have only 24 hours a day, therefore it’s wise to earn from the task of which nature should be either 100% Passive or Semi-passive.
2. Enjoyable and /or Informative
We’re human being and have 2 fundamental desires of Want To Feel Good and Want To Learn. In order to get you constantly motivated and make the task sustainable, the task should be something related with what you are familiar with & like to do eg. hobby / favorite stuff, or something you’re interested & want to know better.
3. Little Correlation with your main income
Income diversification is all about risk aversion, often said as Don’t put all your eggs in one basket. If you work for construction company, don’t try to get extra money from real-estate area such as property dealing company stock. If the economy slowdowns & goes into recession you may loose all. In other words, selecting the opportunity that has no or little Correlations with your other incomes is important from risk management perspective.
3 Clever Ways To Diversify Your Income Streams
Having taken all the above 1-3 concepts into account, the following 3 approaches sounds viable:
1) Making the best use of Expertise of Experts
To save your time and increase the chance of success rather than doing everything from scratch on your own
2) Use Forex (Foreign Currency Exchange) Trading
To sharpen your radar on global Political & Economic climate / movements, means increase your knowledge & insights on international affairs as well as improve your financial literacy
3) Enjoy Sports Events (Advantage Gambling)
To get more fun & excitement through your favorite sports events
Let me elaborate a bit further. Firstly, 1) concept should apply to 2) Concept. In order to do so, Forex trading should be Passive Trading and you can use Managed Account / PAMM account, Social Network Copy Trading and Software (robot) System. These 3 Methods basically 100% passive income means you don’t have to do trading by yourself but someone will do for you.
For 3) , we use Advantage Gambling or Advantage Play. Sports Betting is one of 6 Advantage Plays we use. As explained in the next section, although it says gambling we Never Gamble. In fact, the above passive trading is not risk free, but most of the advantage plays are basically risk free. Because we don’t rely on chance but count on mathematical advantage. You can find more about these 6 advantage palys, in Advantage Play – Probably Only Surest Method To Beat Bookmakers & Casinos For Anybody;
Generally speaking, both 2) & 3) have very little correlations with other assets class such as Stocks, Bonds, & Commodities and also the income from your daily job unless you work for FX broker or Betting Bookmakers.
Income Diversification First Concern – Gambling
When it comes to the Advantage Play, whatever I explain, some of you may still say I don’t do gambling. Let me show you 2 examples that prove Advantage Play is Not Gambling;
This method for Sports Betting has been catching on especially in UK / Ireland over the last 10 years. Nearly 300,000 ordinary people are supposed to use this method to make fast extra money on the side. It has been introduced in several established media such as Guardian – Free bets mean you can clean up as bookies meet their match. Very briefly, how it works;
- The organisations you use: Bookmaker such as William Hill & Exchange like Betfair
- The profit source; Bookmaker’s Free Bet Offer such as “Bet £10 Get £20 Free Bet”
- You Do 2 transactions; Back (bet on win) with Free Bet at Bookmaker & Lay (bet on NOT win, means both lose & draw like football match case) with your own money at Exchange so that you cover all the outcomes
- No matter what the event’s result will be, your losing & winning will cancel out each other, so break-even of plus minus 0. In the real practice, usually 2 bets are not perfectly offset due to the odds difference & exchange commission therefore you make a small loss called Qualifying Loss.
- However, the stake you bet at Bookmaker is Free Bet (not your money but free money) therefore it will become your net profit.
- Success factor is how to minimize this qualifying loss in the process, and as explained it is Risk Free.
You may want to see the details in Matched Betting For Dummies – 9 Essential Things You Should Know Before Staking Any Real Money;Yes, now you understand that it’s Risk Free because we Hedge all the bets we place and Guarantee the Profits from Bookies’ Free Bets / Bonuses.
Have you heard the name of Patrich Veitch? Patrich is the man most feared by British bookmakers. The Daily Mail as well as The Telegraph reported that Dubbed Enemy Number One. Patrick Veitch went from being a Cambridge University mathematics scholar to the man feared by the bookmakers. He works 80 hours a week on his system and uses a host of agents to put on his money on horse racing. Regularly winning punts of £100,000 including once putting £20,000 on a single horse. He has made and kept a fortune and continues to torment the bookies at every turn. The rewards can be seen in his splendid town house in the north of England, a smart London pad, his own helicopter and his Ferraris. He uses his intelligence and mathematical brain to analyse form and spot holes in bookmakers odds. He commented that horse racing is such a multi-layered conundrum, what you’re looking for is the factor that the bookmakers have got completely wrong. That takes strategic thinking, experience and thoroughness. The fact of the matter is, there is no short cut. The only way to win is through sheer hard work. Unfortunately, Patrick doesn’t produce tips, but there are a few excellent Tipsters who constantly produce Value Bets, not so smart as Patrick though, will help you make fast extra money.
Are We Yet Trying To Gamble?
Many of you will still say Patric is an extremely rare and chosen gifted man. Yes, such a huge win must be rare. However, it’s also the fact that there surely exists a bunch of people (5% or more depending on the categories though) who continuously win and make living it. So, let’s define the “Gamble”. Mr. Naoya Kihara, the first Japanese Professional Porker Champion defines that gamble is Putting Money Into Something With Negative Expected Value. Means taking excessive risk to end up with loss. Poker is not a gamble for Mr. Kihara because he plays only the game of which expected value is positive. That’s exactly the underlying concept of our 6 Advantage Plays. Everything is based on the theory of probability and expectations that is gauged in EV(Expected Value) as I will explain a bit later. Mathematical expectations is a function comprised by two variables of probabilities and their payoffs amount. It tells you how much profit / loss you expect. It is a weighted average approach that involves multiplying each possible outcome in a situation with its probability to arrive at the expected outcome namely a predicted value of a variable, calculated as the sum of all possible values each multiplied by the probability of its occurrence. My bad, it sounds complicated, in fact you don’t have to learn anything about it. Just a simple formula only. Given a random variable X with values x1, x2, x3, . . . xn, and respective probabilities of p1, p2, p3, . . . pn, the expected value of X is given by the formula:
E(X) = x1p1 + x2p2 + x3p3 + . . . + xnpn.
Again, you don’t need to remember these things. The key principle here is whether we take Calculated Risk Taking that brings Sure Long-Term (say average) Profit or Blind (excessive) Risk Taking. We should only risk money on positive mathematical expectancy situations where:
E(X) – Your Risking Money Amount = Plus,
You should not risk money on negative mathematical expectations where E(X) – Your Risking Money Amount = Minus and unknown probabilities. In other words, “minimize risk while maximizing profits” that can be materialized through structured strategies & money management operations.
For this particular point, you may want to read Beat The Bookies By Knowing How Your Enemy Makes Money – Secret Of Odds;
Although I said you don’t need to remember any details, but for you to understand the whole concept, it’s critical to know the EV (Expected Value) that is explained in the above document.
Very briefly, imagine you find a coin flip game stall in a festival and storekeeper offers you if you win you will receive £10. Then what is the maximum stake you should accept to do this game? Probability of head or tail is 50:50, means your winning probability is also 50:50 that is 50%. Then your E(X) = $10 (if win) x 50% + $0 (if loose) x 50% = £5 Therefore when the stake required is less than £5 like £4 you should do this game but if it is larger than £5 such as £6, then you should not participate in the game. Please be noted it’s possible that you may keep winning over 10 times consecutively under £6 stake based on simple luck, called Variance. But in the long-run say play 100 times, the probability theory surely applies and you will loose, vice versa.
The handful of of constant winners are not gamblers but stick to this principle. When it comes to Sports Betting, the expected value formula can be expressed as:
Expected Value (EV) = (Probability of Wining) x (Amount Won per Bet) – (Probability of Losing) x (Amount Lost per Bet)
For the above coin case, if you stake £6 to participate the game your EV = £5 of E(X) – £6 of Stake = – £1 while if you stake £4 to participate the game your EV = £5 of E(X) – £4 of Stake = + £1.Anyhow, the bottom-line is as long as you bet on Positive EV, namely Value Bet, it is no longer gamble but something you will surely make money in long-term. Proven top Software / Tipsters / System are the one that constantly identifies and provide you with such Value Bet. So, the key factor of success is how to find good software / tipster / system as well as good FX traders / robots.
Not convinced? Still feel risky move? Talk to me to anytime – click the face icon on the right;
Income Diversification 2nd Concern – Security
As the Internet age, wherever you are, you can access to Forex Market and Sports Events 24 hrs / day worldwide through on-line Forex Brokers and on-line Bookmakers. You can make fast extra money online at your convenient time by using Professionals found on the internet. However, it’s widely believed that over 97% of on-line investment programmes & business opportunities such as network marketing are scams or extremely short-lived due to the poorly constructed business model. So, always resort to your common sense and turn your back on tantalizing promises of Easy Profits and Get Rich Quick advertising words. Let me elaborate a bit further on this security issue because it’s very important.
When it comes to Passive Income, Pooled Fund is one of the most popular investment vehicle. Because any funds in which multiple investors contribute assets and hold them as a group, are classified as pooled fund like mutual fund / unit trust / hedge fund etc. These funds are managed by professional trader, so you don’t need any education & skills to trade for yourself but they do everything for you. However, people are often tricked by Ponzi Scheme (famous in Pooled Fund Structure because your money is not under your account but in someone else (trading company etc) account.
On the other hand, Managed Trading Account including PAMM (Percent Allocation Management Module) is an investment / a trading account which contains a portfolio of securities that is owned by an individual investor. Means you yourself directly own, but are chosen and traded by a hired professional money manager on your behalf (100% Passive). The trading can be managed by human namely discretionary trading, or automated technique such as using robot that can eliminate all emotion. In the Managed account, all your money never leaves from your hand but are kept in your brokerage account under your own name. You grant permission to the experienced traders to access to your account so as to trade on your behalf. But the permissions are limited to trading only and he cannot deposit any extra fund to the account or withdraw from your account.
Let me stress that you are the proprietor of the account (Ponzi Free). Generally speaking, managed account demands at least $100k or more to agree to work only for you. But lately, there are many managed accounts you have the advantage to hire them with smaller amounts – but of course the broker won’t work only for you. However, the new technology of PAMM – Percentage Allocation Management Module provides you with the solution allowing the trader on one trading platform to manage simultaneously unlimited quantity of managed accounts. Trader’s activity results (trades, profit and loss) are allocated between managed accounts according to the ratio. The bottom-line is that the PAAM allows small investors to enjoy the security & return of managed account starting from even $100 or less. So, let me summarize the key characteristics / benefits of Managed Account & PAMM as follows:
- only the owner of the account can deposit and withdraw investment funds at any time
- the owner can revoke the right of the investment manager to trade the account
- the owner may close the account at the end of any trading week
- the owner has real time access to their account and can view all trading activity taking place therein.
More Secured Ways
When it comes to Social Network Copy Trading and Robot Trading (both are auto-trading, so passive income) there is no room where Ponzi scam tricks you. Because you manage your accounts for yourself by using the signals from Experts or Robots which allow you to make auto pilot trading. Never get your money leave your account and never get any others to access your account.
Regarding the Sports Betting, unlike FX trading, there are no 100% passive trading and you yourself are able to bet in your own bookmaker account (manual in general but some sophisticated software will make the whole process easier especially for Sports Arbitrage).
You do it basically without any input from your brain but by just following the instruction you receive for every betting from tipster. Your decision making rests with determining which bet signals to take, thus we describe it Semi-Passive Opportunities.
When it comes to Matched Betting, you can also use excellent system which allows you to save time. Under this system, your money never leaves your hand thus, surely Ponzi Free. For all the Advantage Play, we provide you with the Free Programme which aims to achieve £/€/$50,000 Extra Income Within 2 Years – see the details at the bottom.
Let me stress when you engage in On-Line Money Making Programmes, theoretically it’s better to avoid Pooled Fund given the availability of so many safer choices.
Diversify Your Income – Conclusion
Wrap Up – Uncertainties & Why We Need To Diversify Our Income
“Causes and Consequences of Income Inequality: A Global Perspective” issued by IMF explains the key causes of Inequality, which is a good summary of the uncertainties we discussed;
In addition to looking at the consequences of inequality, our study also examines some of the causes. Our results suggest that there are many common factors behind rising income inequality, irrespective of a country’s level of economic development.One such factor is technological change, which can raise the demand for skilled labor over low-skilled labor by eliminating jobs through automation or upgrading the skill level required to keep those jobs. The decline of some labor market institutions (such as lower trade union power) is another. These factors help overall growth and productivity, but they also tend to boost inequality, at least in the absence of compensating measures. Globalization has also played a role in reinforcing inequality, albeit a smaller one. We find that the rising skill premium—that is, the wage difference between skilled and unskilled workers—is associated with widening income disparity in advanced countries. Financial deepening—or the expansion of bank credit and financial markets—is associated with rising inequality in emerging market and developing economies.Causes and Consequences of Income Inequality: A Global Perspective
These trend will be expected to continue, and we have to prepare for that by diversification of our income.
Wrap Up – Our 2 Pillar Methods & Vision
The best part of the approach explained in this article is that you can start building additional income streams by satisfying 3 elements of 1. Maintaining your full-time job, 2. Enjoyable and / or Informative Task, and 3. Little Correlation with your main income.
We all have different preferences and therefore our decisions will vary significantly. Whatever you decide to do, or not to do, your contentment and satisfaction in the end is what truly matters.
As I said in “About Us”, our vision of this site is;
“Help Ordinary People From All Over The World Make Money On The Side Reliably & Sustainably, Which Will Enrich Their Life For Long Term”, and we wish the above 3 smart ways will fit your needs and eventually contribute to achieve financial freedom.