Generating multiple streams of income can positively impact your finances. We often hear about the importance of diversifying our investments across multiple asset classes. In a similar vein, diversifying our sources of income is equally, if not more important. Generating additional income can have an immense impact on your quality of life. If this was true during ‘normal’ economic conditions, current scenarios, with the added headache of decreased job security and uncertainty on your primary source of income, such avenues take superiority and should be pursued with added vigour. There is no certainty, however through research and education, you’re on the right path.
In times of a pandemic, safety and security, for you and your loved ones takes utmost precedence. Given the digital age, and accentuated further by the onset of free and cheap internet in our country, the World Wide Web has opened massive opportunities for you to learn and accordingly apply your knowledge from the safety of your home.
Trading has low entry barriers, and can be a consistent and steady source of secondary income if executed efficiently and planned conscientiously. DIY or do it your own is a recurring theme within the financial services landscape, and customers today have the opportunity to take trading calls independently, via platforms, internet based services and discount brokers, well within the confines of their home. The below key points are imperative and should be taken into consideration in building a secondary source of incomes, especially in times of a pandemic, when movement and interaction are extremely limited.
The ideal source of income allows you to call the shots on your time. Particularly, if you have a full time job, managing multiple responsibilities can be difficult. Trading allows you to pick your style and the frequency with which you want to execute your trades. Some forms include intra-day, swing and long term. As the names suggest, in case you’re capable of managing your time on a daily basis, intra-day is best suited as you can visit your terminal and take multiple calls in the same day. Similarly, in case time is limited, you may adopt swing trading, and set your trades with a pre-defined duration and accordingly revisit your terminal basis such indicators. Trading allows you to be the master of your own time, and thus remain flexible with your involvement, all within the confines of your room.
In wanting to generate a secondary source of income, scalability is something we all seem to miss. The general thought process is to not give it much importance given that your maximum attention is elsewhere. However, this mistake means your new skill is short-lived and would push you into finding another source soon enough. Trading, if executed thoughtfully allows you to build your portfolio gradually. As your confidence grows, you can accordingly scale the size of your position and therefore generate higher amounts basis your success ratio.
In adopting a new skill, you are spending considerable amount of time, energy and money. In that regard, sustainability is key. You want to pick a skill that you can build upon and accordingly expect to contribute effectively for a considerable time in the future. Trading can be sustainable business if executed thoughtfully and planned thoroughly. You can successfully pursue trading as an alternate source of income if you bridge the gap and move from being a trader to a professional trader. Education and practice go a long way in maintaining and accordingly making this a sustainable option.
Generating another source of income is a lot of work, and you will only be successful if you enjoy the process and the outcome. Your win size builds your confidence, and sticking to your trade plan and adhering to the defined rules ensures your emotions are kept in check. Trading has the ability to give you an adrenaline rush.
Given that you’re pursuing this as a secondary source of income, your monetary contribution to kick-start this enterprise should be attractive enough for you to follow-through with this. Trading has extremely low financial barriers of entry. Financialization of the economy is a government mandate, with the financial burden for traders and investors on a downward slope for the last couple of years. This bodes extremely well, thus making it an inexpensive proposition to enter.
In times of a pandemic, safety and security are of utmost importance. Working from home, and generating income using means that allow you to limit contact and human interaction are the need of the hour. Trading provides one such option, and by following a conscientious approach, educating yourself and maintaining a calm mind, you can become a professional trader and successfully generate a secondary source of income.
The author is Chief Executive Officer, FinLearn Academy