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How To Create Diverse Income Generating Sources For Yourself

The importance of Income and investment diversification cannot be overemphasised as it enhances individuals financial stability and creates pathways for their growth, Mr James Ilori,CEO of FCMB Asset Management spoke on the best methods to ensure a smooth transition to income and investment diversification.

A good understanding of this will lead to a less risky financial future for you.

Here are the five approaches on diversifying ones sources of investment income;

Always begin with the end in mind
Having an end goal in anything helps keep you on track, when you are thinking of your income and investment diversification, you are thinking of the future , you must have a goal you plan achieve, this would set the stage and guide along the path to achieving that goal.
The best practice is to come up with a long term goal, break it down into clusters of short term goals then identify strategies and implement them to achieve these short term goals that would lead to the actualization of the main goal.

Set aside a percentage of your current earnings
The habit of saving cannot be over-emphasized, anyone that wants a greater future must begin now to save for that future. It is recommended that you save a 20% of your current earnings then push it into investments that are different from what you are currently doing.
This opens a new stream of income for you different from your previous one, it creates a level of financial stability for you.

Have Investment objectives
Your investment objectives determines the strategies you would use to achieve your goal. There are different types of investment objectives like capital protection, income generation or capital growth.
Money market, bonds, treasury bills, equity and so on are like investment tools you can use depending on what your investment objectives are.
Make use of professional service or consultation
When investing, it is advisable to conduct personal research and also employ the services of a professional either for consultancy or for them to be involved in your investment plans and implementation. If you plan on diversifying your investment all by yourself to cut the cost of a professional, always note to start with low risk investment opportunity, this would reduce the cost of loss if any occurs.

Hedge against the risk of devaluation
Another valuable way to diversify your investment with low risk is to invest in opportunities that are in currencies that are stable or have strong value. With the current exchange rate and currency stability, best advise would be to invest and conduct business in currencies that are stable for now, this would reduce loss coming from currency devaluation.

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