Money Rule #4 – Diversify
Ecclesiastes 11: verse 2
“Divide your portion among seven, or even eight, for you do not know what disaster may befall the land.”
This verse reminds us of the importance of not putting all our eggs in one basket. Life is unpredictable—job loss, health issues, or economic downturns can easily wipe out a single source of income. The solution? Diversify your income streams.
Most people already practice this principle to some extent. Many households rely on two incomes to make ends meet—one from each partner. Though it may feel burdensome, having multiple streams of income is a form of security. Solomon’s wisdom tells us to aim for seven or eight sources, but the main takeaway is clear: don’t rely on just one.
Millionaires know this well. According to the IRS, the average millionaire has seven income sources, such as a salary, rental income, dividends, interest, capital gains, royalties, and business profits. Diversifying income isn’t just about wealth; it’s about protecting yourself against the uncertainties of life.
So, how do you diversify? There’s no one-size-fits-all answer. It could mean starting a side business, investing, or finding other creative ways to generate extra income. The key is to start thinking beyond just one paycheck.
I’m Lonnie Davis, and these are thoughts worth thinking.