How to Diversify Income Sources as a Freelance Writer

As a freelance writer, it makes sense to diversify income sources. You never know when something will fall through or you'll need extra cash. Here are some of the things I'm doing.

When you have a variable income, developing different revenue streams can make sense. This doesn't mean that you have to monetize everything you do. However, it can make sense to think about how to diversify income sources so that you aren't completely stuck if a source of income dries up.

Why it makes sense to diversify income sources

I'm a big believer in the importance of income diversity. Building income from different sources can help protect you against problems that arise when you lose one type of income. A side hustle can help you shore up your finances in the event of a job loss, or some other financial difficulty. Passive income can also be a big help.

Basically, nothing is guaranteed. Until we have UBI, you can't rely on any source of income for the future. A traditional job can be just as insecure as a freelancing business. Your boss could fire you. A freelance client that provides a large chunk of your monthly cash flow could decide to cut your assignments.

When you cultivate income diversity, you reduce the chances that the loss of revenue in one area will completely cause you problems. Yes, having an emergency fund is important. And can shore you up. But having different sources of income can reduce your reliance on that emergency fund.

Diversifying income sources as a freelance writer

As a freelance writer, the process of diversifying your income sources usually falls into two different categories:

  1. Your client base
  2. Other ways you get money

Breaking it down can help you determine the best way forward and protect your earning power well into the future.

Diversify income sources in your client base

At one point in my freelance writing career, I realized that my income wasn't as diversified as it could be. One of my clients once accounted for about 1/2 of my income. Today, I try to be mindful of how much work I accept from each client. I try to limit each client to between 25% and 30% of my client revenue. That way, if a client drops me or cuts assignments, I'm not scrambling to pay the bills.

Other ways I diversify income sources in my client base include:

  • Different niches and sub-niches: I have a couple of small clients that are outside the personal finance realm. Within personal finance, I have a couple of niches I fill. That way, I can pick up extra articles in one niche if another is flailing. For example, in 2020, the credit card niche dropped off a cliff. But because only about 15% of my writing at that time fell into that niche, it had a relatively small impact. I could easily ramp up in personal loans and investing to replace that income, without having a huge impact while waiting.
  • Other types of freelancing: I have two clients for whom I do work other than writing. One of them has me appear as a spokesperson on their behalf, completing media appearances and interviewing. The other pays me to get guests for and co-host a podcast. I know other freelance writers who also have a couple of other freelance projects, such as social media management and video production, to diversify their income sources.

While these aren't major sources of my monthly income, they still provide me with additional skills and offer something beyond writing to help my cash flow.

Other ways to diversify your income as a freelance writer

It's not just about your client base, though. Look for other ways to get more money in your personal finance ecosystem. Over the last few years, I've worked on different projects that have the potential to provide me with ongoing income, regardless of what happens with my freelance career.

  • Investing: This is a big one. I started investing for a variety of purposes, including in tax-advantaged retirement accounts. I'm getting close to Coast FI, and a portion of my portfolio includes dividend investments. While still in the accumulation phase, dividend payments are reinvested. Later, though, they could provide some income.
  • Products: I've also developed a couple of mini-courses about travel and setting financial priorities. On top of that, I am working on an ongoing Kindle Vella about solo travel. And, of course, I have a book about freelance writing. These don't provide me with huge amounts of revenue, but they help.
  • Speaking: I've been getting paid for speaking gigs and enjoy that. I'd like to do more of it! I'm also toying with the idea of workshops. My small travel fund workshop got good feedback, so I might do more of that later. Finally, I've had some work as an emcee, as well as facilitating others' workshops.
  • Affiliate income: This isn't a big focus of mine, but I usually get a few bucks from affiliate links through this website.

You can figure out your own way to diversify your income. I know freelancers who have rental properties, do gig work like pet sitting and rideshares, and make money from YouTube. Some creatives sell patterns, templates, and even handicrafts. It's really up to you how you diversify income sources outside freelancing.

How much money will you make?

As always, mileage varies. Some months, my “alternative” income sources amount to a few bucks, and other months I end up with more than $2,000. The idea is to start building something different and see if you can begin seeing results. For some of my projects, it's more about building something that's mine and growing it over time.

One of the issues with freelancing is that it can be hard to devote time to your projects. They don't pay immediately as client work does. However, over time, there's potential there to earn even more—and it isn't reliant on someone else's whims.

For now, most of my income comes from freelance clients. However, I'm working to diversify my income so that, in the future, my client base accounts for less of what I get coming in. That will take time, and require balance, but it's definitely doable.

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