Diversification can mean several things. To most people, it’s spreading their money over a range of investments so that if one investment doesn’t do well, the rest of the money won’t be affected and there’s still plenty to fall back on.
For the past year, I’ve unknowingly been diversifying another way.
With my investments, I do a pretty bad job of diversifying. I have my money in a few broad mutual funds, and the rest is kept in low-interest savings accounts.
But when it comes to my job, I’ve done an amazing job at diversifying. Not only do I work a full time job, but I pull in a decent side income through blogging. When I add in another side venture, there’s an additional stream of income. And now, with the addition of writing for WiseBread, I have yet another option for ways to bring in income.
I do not consider myself a writer by any means. I am interested in personal finance, but writing several times a week is one of the last things I expected to be doing. Still, if I were to lose my primary job, I would be able to meet my expenses each month without dipping into savings because I have a healthy income coming in on the side.
Of course, nothing is guaranteed, so I keep plenty in savings, but I feel prepared that if disaster would strike, I would be reasonably prepared.
What does diversification mean to you? How prepared are you should something unexpected happen?