When we go to any restaurant with family or friends for party, we chose the best menu, when we go to a mall we try to buy the best apparel & shoes; in the electronic stores we buy the best gadget.
Then Why,Why and Why? On the other side, when it comes to going for money making activity, we randomly opt for any system we come to know about. We don’t think about actual risk involved, about its sustainability, its viability for us, risk: reward, etc.
After paying our house rent, the Car instalment, taxes & insurance payments, kids’ school & tuition fees, Credit card and other bills, we are left with meagre pennies in our bank account.
We, hence try to make some extra income so that we can provide some or possible extra luxury to our family. Possible luxury like domestic and international holidays, special birthday and anniversary gifts, enough money for kids’ higher education (recently IIMs and other known MBA schools have increased their Fee by 20% or more) and marriages. We also want to save as much as possible for our retirement life or for emergency expenses.
Reading above two paragraphs, don’t you make it out easily that almost all of the requirements, we are trying to make second income for, are related to do with us and our family?
Isn’t it irrational from our part that we are becoming so careless about the financial decisions which can help us for the betterment of our family life?
We plan for months, Check out the possible options, select and execute the best and in the grand way to celebrate even if it’s a birthday or an anniversary.
Ahaaaa!….That’s my point – What exactly we do is that for small-small happiness of our family, even for a smile which would not last for more than few seconds, we try to put up our best and for which we are always ready to take so much pain, however, we are not considerate about the amazing and long lasting changes in the family life.
Let me show you what we generally ignore when deciding what way to opt for to generate second income.
- Actual risk involved – The biggest risk which is generally attached with part-time jobs, second jobs or overtime work is related to the quality of work. Somewhere due to tiredness and stress we lose our focus and we tend to keep pushing ourselves anyhow just to complete the tasks given. This can take a toll on our health and there is a bigger possibility that we lose our main job/business.
- Sustainability of income – We try to get lured by short-term money making system easily. Generally these types of systems either involve some illegal means or it’s about taking blind risk.Blind risk simply means gambling. You very well know how gambling can be fatal for your family and kids more than it can be for you.
- Viability for you – The moment we come to know about any extra activity we can do to make money, we just jump to grab this opportunity without considering the fact that will it supports your already set schedule? Will it make sense to spend that much time and money going for this job? Will it help you to spare some time for your personal growth as well as your family? Etc.
- Risk:Reward – This is very important to understand. Whenever we are doing something extra of course we take risk with our time, health, money, etc. We never try to calculate that – does the reward made by chosen money making system sufficiently compensate us?
We either do some part/over time job or make some investments to generate second income.
In today’s competitive world, the expectations of a company from its employees have increased many folds. Simultaneously, there are many qualified unemployed candidates standing in queue to replace us. In such a scenario, diverting focus on any side job may prove suicidal for our main job.
The recommended way of generating more money is investments. It requires almost no physical presence now a day. Due to advent of speedy internet connections, the time required to make investments is also less.
Now, there are multiple investments options. This is also very important to find out that which investment will help us in the ‘best’ way, which we always seek for, to support the basic luxuries for our family. The luxury we have been talking about above.
As per understanding, an investment which can help us to create wealth will definitely support our aim of funding our luxuries. We are already generating regular income through our job. The need of wealth creation should be fulfilled with the help of investments.
Let us analyse the available common mode of investments.
Out of all the common mode of investments mentioned in the table above, the highest return has been given by the stock market investments. Here the point of focus is not highest return in fact the main point to discuss is that stock market returns have the proven track record to beat the inflation in the long run.
What the stock market return is doing are the main criteria to create wealth.
If your investment is not beating inflation it is just working as an emergency fund for you. We need emergency fund too and that should also be certainly planned properly.
Coming back to our main discussion now, If stock market is the right second source of income or not –
- It is sustainable source for sure. It happens in the entire world so no question of its sustainability.
- It is viable also for most of us as it does not require bigger funds. It can be comfortably started with a minimum fund of hardly 50k to 1 lac.
- It does not involve actual risk as it is possible to follow such trading methodology in trading industry where you just need to invest 15-20 minutes in the month.
- Risk:Reward ratio is also highest if it is done with full discipline and patience and with the help of a successful trader not advisory/analyst. (Link of the blog – Are you an advisory-trapped?)
So, finally we have understood that Stock Market is the best source of second income.
The best part with the stock market is – the moment you have fund available, you can start your journey. No question of right time or wrong time.
Start your investment and change the financial future of your family.
Author: Abishek Raaman