Recession Survival through Income Diversification

While discussing the economy and how to survive job layoffs, a reporter asked me what advice I would give to someone anticipating financial storm clouds. I replied,

Diversify income as quickly as possible. If money is coming from only one source, you're too exposed. Have several sources of income, a side job, a product you sell, something else that brings in money other than your 9-to-5.

As a freelance writer/ online marketer, this is true for me as well. Writing just for one client, for those who ghostwrite or write for a byline, can be risky. I saw this firsthand in the past year when friends of mine on the WAHMs Who Write Forum were let go from Demand Studios, Writers Research Group and other large companies. Suddenly they had no work or very little, and their families were counting on their income.

My income comes mainly from the following, in no particular order:

• eHow ebook
• eHow articles
• Affiliate sales, primarily Amazon, HostGator, CommissionJunction, SiteBuiltIt!
• Adsense, especially on my home & garden blog & pets site
• Private clients (two are editing gigs, one is writing)
  
• HubPages
• Bukisa & InfoBarrel

Having income from a multitude of sources is my basic business model as a freelance writer and WAHM. I would be bored with just one avenue, but it's also a hedge against income loss as I could bring any one of these income sources up to a higher level if my primary sources dropped or dried up.

How do you diversify your income sources?

Diversify Income Streams to Survive a Recession

As many who have recently been laid off or lost their job can attest, depending on a single source of income can be quite risky, especially if the job is in a non-essential sector or one likely to suffer during a recession. Some sectors are more recession-proof than others, for certain, and those will fare far better. But there is ultimately less security when one depends on a single company or other entity for income, rather than drawing income from a variety of means.

I am not necessarily advocating that every 9-to-5 worker open an entrepreneurial side business, but increasing one's diversification of income can certainly improve your ability to weather the tough economic times we are suddenly hearing so much about--and for many of us, actually experiencing in our own families, jobs and investments.

For the work at home mom (WAHM) or other freelancer, entrepreneur or online adventurer, this can mean a variety of things.

• Writers may diversify by increasing the number and variety of writing clients, actively seeking new clients to replace those with less work. Never rely solely on just one or two big clients.
  
• Residual income builders should add multiple income streams to their sites and content articles, such as affiliate programs, ad words, paid advertisements, information products, referral links and e-newsletters.
• Webmasters should diversify their niche site topics. Even as advertising in some sectors plummets, it rises in others. Anticipate these changes and consider niche topics likely to be in demand despite -- or because of -- a poor economy.
• eBay Sellers should also diversify what they sell to anticipate sluggish consumer spending. People still have some money; find out what they are spending it on and make some money doing it. Check out the knowledgeable eBay Coach for advice.
  

Whatever your area of expertise, and no matter what you do for income as a work at home mom (or dad, or anyone else) increase your sources of income during the coming year. Anticipate, rather than react, to what's going on in the economy and how that will affect what you do. Did you know there were many who made money during the Great Depression?

How do you plan to increase your income, despite a poor economic outlook for 2009?

"How to Budget Money" Is a Hit

High schoolers should learn how to make a budget, and personal finance classes should be mandatory in college. In a perfect world. But the reality is, many adults come out of school financially illiterate.

So what do people turn to when their finances are a mess and they don't know how to get them cleared up? Internet searches, of course. Oh, I'm sure some check out books from the library--I fell into that category--but many start with Google.

It's interesting to see what people are searching for on Google, and how those trends change with the times. On eHow of late, personal finance topics are big. A simple how-to on budgeting, How to Make a Budget, has already received hundreds of hits, even though it hasn't been ranked by Google for its main keywords.

In fact, my other recent articles on money topics, such as How to Avoid Paying Private Mortgage Insurance, How to Get Out of Debt Fast and How to Make Money in a Recession are also popular. As you see, they're timely topics.

If you're concerned about your writing career surviving tough financial times and a possible recession, look for a niche that will explode, and get writing now. The finance and money topics will be done to death, so be creative. What aspects of life will change in an economic downturn? What specific areas will people try to save money in? Niche and grow rich.