The photo here is a poignant reminder as to WHY you NEED multiple streams of income. That's me after my 4th brain surgery in June 2002. After collapsing on the patio one Saturday, while cooking on the grill, my wife took me to the Emergency Room at the local hospital. After an MRI, I was informed that I had a central neurocytoma, a brain tumor. It was located at the opening of the left ventricle and had almost completely closed off the ventricle. The most likely outcome for my condition was a fatality. Fortunately, the tumor was benign, NOT malignant. However, some complications resulted in a total of 4 surgeries before it was all over. I was just 2 days shy of spending a FULL MONTH in the Surgical Intensive Care Unit. Not only was I unable to work for that month, I had an 8 week recovery period during which I was unable to drive or basically do anything other than having my wife drive me into town for follow up doctor's visits. That's a total of 3 MONTHS, NO WORK!
Now, understand my situation. I've always been self-employed, so I can't file for unemployment compensation. My primary business at the time was the business I started over 30 years ago. It is a service business. A service business REQUIRES that you be there to provide the service that your clients need. If you can't provide the service, NO INCOME. My wife was not employed so she was unable to compensate for any loss of income. Additionally, my living expenses are quite high. Fortunately, I had MULTIPLE sources of income. And MAN am I glad that I did! All expenses were easily covered, all the bills paid. And let me add this, many self-employed people have NO health insurance, because of the cost. My various sources of income provide what is needed to assure that I can maintain good health coverage. Although my medical bills were several hundred thousand dollars, my total out-of-pocket was ONLY $1,000 (That makes the doctors happy. And when a doctor is working on your brain you want him to be happy). :-) I now enjoy great health with no complications whatsoever.
Anyway, here's my point. You never know when your life may take a sudden, unexpected, turn. You can experience a sudden loss of employment, sudden loss of health, sudden changes that may completely alter your life for a time, at the very least. Are you prepared so that when such an event occurs you are able to cope financially? When something suddenly happens to one source of revenue is there another available to take up the slack?
Consider how recent market conditions have unexpectedly created just such a scenario for many. How many real estate and mortgage professionals have, in recent times, been clobbered financially by the sudden downturn in the housing market? They've been 'dropping like flies'. What a shame! I know many in the real estate business who at one time were doing SUPER and now are finding it a real struggle to make it financially. In fact, quite a few who have been in the profession for many years are now looking for something else. It illustrates the point I'm trying to make here. The more diverse your sources of income, the less you are impacted by such changes when they take place. And please understand, odds are, it's not a matter of "IF" such a change will happen but "WHEN" such a change happens. There WILL be a need for more than one source of revenue.
When I was growing up I was one of six kids, a large family. My dad always managed things so that my mother was able to stay at home with us kids, not have to be away at a job. However, because of the large family, and a single source of income, while we always had what we needed, we lived for the most part at poverty level. It scares me to think of what would have happened if my Dad had suddenly experienced what I did in June of 2002. How would he have managed financially if he suddenly found himself out of work for 3 months? Sure, he was an employee, so he could have filed for unemployment compensation. But that's not paid at the full amount of your regular paycheck and we were barely making it as it was. Fortunately, he beat the odds and never faced that. But I did, and I'm glad I had something to fall back on.
