Being part of the creator economy is difficult, but it gives you so much freedom to grow your brand and establish a business you’re proud of. If you want to make it in the long term, you need to set yourself up for success by building up as many income streams as you can manage.
If you don’t already have multiple income streams coming in, you need to work on building up your income sources ASAP. Here’s why.
7 Reasons You Should Have Multiple Income Streams
1. Nothing is Stable
As an online creator, your income is not predictable. You’re counting on people buying your products or services, tipping for your content, subscribing to memberships, using affiliate links, engaging with your content for ad revenue, etc.
What happens when these income sources fluctuate?
Most income streams you have access to as a content creator are not stable or consistent. Building a stable, full-time job around a single inconsistent income stream is difficult. Developing multiple sources allows you to have some stability in your income. Think of it like building a house on stilts, with each income source being a stilt. Don’t rely on one stilt alone, or the house is coming down!
When you’re dealing with inconsistent income, you need multiple streams to ensure any consistency. As long as you have a few different sources coming in, you’re better insulated against uneven income.
2. Your Audience Is Diverse
If you offer one thing to a group of people, some of them will probably take you up on it, but you’ll never catch everyone with the same offer. To improve your income, you need multiple things to offer your audience.
Your audience is made up of many different people in unique situations. The more variation you can offer them, the more likely you’ll get income from a larger group of people. Since you want to monetize as much of your audience as possible, you can appeal to more people by offering different ways for them to support you.
3. Active vs. Passive Income
Whether you’ve been in the space for years or you’re new, you need to plan for a mix of active and passive income streams. If you have to put in a lot of hours for each dollar you earn, what happens when you take time off or change your workflow?
Passive income is any income that doesn’t take your active involvement. It keeps earning even if you’re not putting time into it. While this is the traditional definition, passive income in the creator economy also includes money earned from minimal direct effort or some upfront effort to create and little to no effort to maintain.
You can add only so many active income streams before you’re overstretching yourself. The best way to counter this issue is to work towards adding passive income streams.
Here are a few examples of passive income for creators:
- Digital product sales (courses, reports, templates, plug-ins, etc.)
- Affiliate blogs
- Print-on-demand product sales
- Stock image, icon, and video sales
- eBook sales
- Sponsored social media posts
- YouTube channels
With most of these examples, there’s some effort upfront to set it up, but it can become entirely passive or mostly passive over time. Any digital or print-on-demand products you sell can be fully passive sources of income after they’re created, while options like sponsored posts, blogs, or YouTube channels can be outsourced to become passive.
You can also take advantage of traditional passive income streams, such as:
- Real estate rental income (especially managed LLCs or REITs)
- Stock and bond investing
- Managed Airbnb rentals
- Peer-to-peer lending
A good mix of both active and passive income is much better than relying on one income type alone. Active income is likely to give you higher earnings, while passive income always provides a smaller stream, even when you’re not directly doing anything. This is an effective way to insulate your income and make it more stable.
4. An Income Stream for Every Platform
Your audience may be different on each platform. Those who watch your YouTube videos may not be the same as those who interact with you on Twitter or Instagram. Having something unique to offer on every platform helps you capture and convert the different segments of your audience.
Make sure whatever you’re offering makes sense to the platform you’re using and the audience you have there. On some platforms, monetization can be more seamlessly integrated into your content, such as on Instagram, where you can add links to certain image types for people to make purchases directly from your content. Monetization can also be in-built, like with ad revenues from YouTube videos or Twitch streams.
Set up your monetization so it’s as easy as possible for people to support you. Play to the strengths of the platforms you’re using instead of trying to force one thing to work everywhere for everyone.
5. Long-term vs. Short-term Income Sources
Some income sources have short-term potential, while others will let you earn in the long term. Mix both for the best outcomes. This is similar to mixing active and passive income, but the difference is making sure you’re balancing short-term or instant income with indefinite income sources that last for years.
Examples of short-term income are sponsored content, one-off projects, tips, limited merch drops, or one-off paid events. These are all good sources of income, but they don’t provide consistent revenue unless you continuously redo them. You have to put in the effort to make them happen each time, and there’s no clear escalation of revenues.
Long-term revenues are any source of income that repeats automatically, pays out over a longer period, or is available for purchase indefinitely. Examples are subscriptions or memberships, long-term brand partnerships, affiliate programs, digital or print-on-demand product sales, coaching programs, or long-term service contracts.
Both short and long-term income can be either active or passive. The biggest difference is that short-term income is less certain, while long-term income is something you can depend on and plan for. If you want a stable career, make sure you’re not building your entire monetization strategy around short-term income. Start working on growing your long-term income sources ASAP.
6. Relying on Yourself, Not a Platform
We’ve already mentioned income stability, but it’s worth looking specifically at the stability of the platform you’re using. If you’re getting a large portion of your money from a third-party platform, you need to diversify your income so you’re not completely reliant on a platform.
It’s a sad story that’s played out over and over. Creators work to build up a following and grow their income on a platform, only for that platform to suddenly close or change their rules, causing those creators to lose their primary source of income instantly. It’s happened to affiliate blogs, YouTube channels, TikTok accounts, streamers, and practically every other type of creator on every platform.
Don’t put all your eggs in one basket. Set up your income so you never fully rely on a single platform. Even if it’s your largest income source, make sure you have at least two other supplemental income sources in case things change suddenly with the platform.
7. Career Growth & Stepping Up
Finally, it’s important to look at your income sources and see if what you’re doing now is helping you get to where you want to be in the future. Are you working to grow your career while you’re earning?
Looking to the future helps you keep your career moving forward and allows you to adapt more easily when things change. While career growth might involve taking on new challenges and looking for different ways to earn, it could also mean intentionally seeking out projects that help push you toward your goals. Instead of taking only the low-hanging fruit that’s easiest to get, you’re looking for ways to push yourself and grow in the direction you want to go.
Keep at least one income stream representing the next step you want to take in your career. Don’t get locked into work that you hate that leads nowhere.
How Many Income Streams Should You Have?
We always hear that millionaires have at least seven streams of income. This is great, but it’s not a solid rule to live by for creators. The ideal number of income streams is a range that might fluctuate depending on what kind of what you’re doing.
Here’s what you should be aiming for.
Minimum Income Streams Creators Should Have
Establishing three income streams is a good milestone if you want stability as a creator. Once you have at least three ways to make money from your audience, you have a good foundation to build from.
Having any less than three income streams puts you in an unstable position. You’re too dependent on each stream, with very little to fall back on if one of your income streams fails. If you keep a minimum of three income streams, with at least one being a long-term income source, you’re better prepared for ups and downs in the market, platform changes, and other disruptive forces.
Can You Have Too Many Income Streams?
If three is the minimum, does that mean you should have a maximum number of income sources? Yes and no.
The maximum number of income streams you should have is as many as you can handle without overstretching yourself. It can vary a lot depending on what you’re doing, how productive you are, and how good you are at delegating.
Scaling your income will always involve delegation at some point. The more income streams you want, the more you need to learn to outsource wisely and manage from afar. If you have to be directly involved in every income stream, you’re limiting your potential for growth.
You’re doing fine as long as you can maintain each income stream well. If you get to the point where you’re struggling to manage your income streams, you’ve probably exceeded your maximum, and you need to refocus.
Do you have a plan to add to your income streams this year? Let us know in the comments below!
