Focused - 11: Balancing Dollars and Delight

Episode Date: December 14, 2016

One of the best things an independent worker can do is invest in both belts and suspenders. We discuss cultivating and managing multiple income streams, and both the risks and benefits of getting your money from a bunch of different places.

David Sparks and Jason Snell spent their careers working for the establishment. Then one day, they'd had enough. Now, they are independent workers, learning what it takes to succeed in the 21st century. They are free agents. Welcome back to Free Agents, a podcast about being an independent worker in a digital age. I'm David Sparks, and I'm joined by my fellow host, Mr. Jason Snell. Hi, Jason. Hi, David. Good to be here. Yes, it is.

You know, one of the best things about being an independent worker is that you can invest in both belts and suspenders. Interesting. Interesting. I've never worn suspenders, but I suspect you were being metaphorical here. I've worn them they're actually quite nice once in a while pulled up your pants yeah i could see the appeal you look like larry king but you know yeah back when i was at disneyland when my couple of my costumes had suspenders i found i kind of like going beltless but it's even better if you have belts and suspenders especially when it comes to paying for your shoes. Boy, I'm just going crazy here. Wow. Well, so the point here is, I think, as we maybe suggested on our last show, we're going to talk about having multiple income streams. Or if you are a gambler or a fan of James

Bond movies, imagine placing several bets on the roulette wheel instead of just one. several bets on the roulette wheel instead of just one. And this can be a healthy way, if you're an independent worker, to make your business more secure, investigate new revenue streams and new ways to grow your business, new ways to grow yourself as a professional. And so David and I both have multiple income streams, and I think it's a good thing, but we're going to talk about it today. That's our topic. Yeah, I mean, I really think that there is a large degree of luck in finding an income stream that allows you to go independent, that finds you a way to break loose, break your chains of bondage and get out there. But the real success is in the long game. Can

you keep it going? And something that works for you today is not necessarily going to work for you in one year or five years or ten years. And you're here for the long game. So I think you always need to be keeping your eyes open for other ways to make it all work. In my business, the law business, it's the one client versus 100 little client problems. I had a friend who got a big client. He was an insurance defense attorney, and he got a big insurance company that hired him. And he suddenly had massive amounts of income. He started hiring people and taking leases down for big bits of space on offices.

And he had it all figured out until that day that the insurance company decided they were going to go with a different firm. And then all of a sudden, he was facing huge problems, commitments and people. And that's something that I think, no matter what you do for a living, I think that's something you need to be wary of. So one version of the multiple income streams is don't have all your eggs in one basket in terms of your clients. Try and get lots of little ones if you can. That way, if one of them has a bad day or decides they don't like you anymore or just decides to move to Hawaii and shut things down, you've still got 99% of your business instead of zero.

Yeah. I mean, it just, it makes sense. Whatever the number is, and maybe depending on your business, having 100 clients or 20 clients or 10 clients or however you do it, that is the diversification there is exactly the point that you hope, it's not to say that all of your work will go south at once, that could happen, but it's more likely that some of them will be up,

some of them will be down. And what you'll end up with in the wash is stability. And like you said, if one of them vanishes, then that's too bad. But that's a little hit. And maybe another one is stepping up and wants to take on a little bit more business. Or maybe you've got room to bring on a new client that's going to be your next big successful client. But it's something I think as an independent worker needs to be at the front of your mind from the beginning, even before you go out independent. If you're thinking about going independent, what is your plan for multiple income streams now? What are you doing now to give yourself that flexibility once you break out?

Yeah, it's hard and it depends. This is so dependent on what your business is too, but that was for me going out on my own. Uh, definitely I intended multiple things at once. And part of that was I wanted to try a bunch of things and see which ones worked and see which ones didn't. Um, but I also wanted just the diversity of it so that I, I wasn't relying on, well well, I'll give you an example. So I write a column every week for a website that formerly employed me. And that's a really nice income stream. But they could cancel that column at any moment. And I'm well aware of that. And I hope they don't because I really enjoy doing it. But if that was my entire job, which it can't be, but they'd have to pay me a lot more. But if they did, and that was my entire job,

and I focused on writing for them, and that's the only thing I did, well, guess what? I'm essentially employed by them at that point. And again, there's nothing stopping them from saying, sorry, we don't actually need your services anymore. Whereas today, if they came to me and said, we don't want you to write for us anymore, that would hurt because I'd lose a pretty nice income stream. But it would free up my time. I could find something else out. And I've got all of my other business going on. Yeah.

And one of the things you've done that is impressive is you're not just looking at saying I'm getting a lot of little clients as opposed to one big one. You've explored different business lines. You've got different things you do. I mean, you're a writer, you're a podcaster, you've got all these different kind of ventures going on at once. And that's another form of multiple income streams is looking for entirely different business lines or different things you can do with your existing business. Yeah. And it's not for everyone, but I think having diversity in clients is one way to go and having diversity in form is another way to go. And so for me, right now, I have my writing with advertising, my writing with membership, I have freelance writing, I have my podcasting on my network, I have my podcasting on Relay. I have some membership from both of those.

So I've got a bunch of different stuff that's feeding me from different sources. And I'm fortunate to be able to do that. And then I can try those different things and then sort of rebalance. It's a little bit like if you take something like a mutual fund or something like that, where you've got your retirement plan and you're kind of rebalancing over the course of time. It's a little bit like that. I can rebalance and say, oh, this one's working. Let's put a little more there. This one's not working as well. It's a luxury, I'd say. You don't have to do this. But the more diversification you get, the more flexibility you get. Yeah. For me, it's the same thing. I've always felt like multiple income streams is the way I'm

going to be able to be doing this in 10 or 20 years. So I've got, you know, I do podcasting, I do writing, I do screencast for app developers. Oh, yeah, I'm a lawyer too. You know, I've kind of branched out and it does limit your abilities. And we're going to talk about that in a minute, but it feels me very comfortable. It makes me very comfortable to know that there's different ways I can earn money. And, you know,

no matter what the world throws at me, I think I'm going to be able to take care of my family. And, and I think that's what you're looking at as an independent worker is how do you, how do you protect the long game? How do you know, or how do you make the best investments to make sure that there's additional income later, even if what you have now becomes for some reason not the thing?

That's actually my number one motivator in diversifying is finding new directions and trying things out and staying relevant in that way. And that's a, you know, this is a new direction doing a podcast about something that isn't, you know, technology or popular culture, right? We're doing this, this is a new direction for us. And we're not, you know, business experts tell you things on a podcast, right? We're not one of those, but we are trying this out. And it's different for both of us. And, and I do that with, you know, I'm making some videos and stuff now. And it's like, is that a business? I don't know. Maybe it's not, maybe it goes to my existing business, but it's something I want to try. And I think there's, I think there's an aspect of, of using your, uh, search for diversification as a way

to explore potential directions for business in the future. And they won't all work out. And some of them will, but I feel like a healthy independent business is much more likely going to be sort of like, I've got these five things and then this one's fading, this one's peaking, and then I'm bringing in this new thing

and we'll see if it's going to work or not. And that you're managing kind of those multiple streams for the present, you've got stuff that's fading away streams for the for the present you've got stuff that's fading away and for the future and and if you think of it that way as like you're you're investing in these different things and they all are different parts of their lifespan ideally then uh that i think that's healthy i mean if they're all on full on all the cylinders and they're all doing incredibly well then that's's amazing too. But I like the idea of

always having something in the hopper that's a new thing that might become something that it's worth spending a little bit of time on because it could be another source of income that could be good in the future, even if right now it's pretty small. And I like your discussion of placing bets earlier because as an independent worker, you are uniquely suited to do that. When you're working for somebody, you don't have that decision to make to say, hey, we should really try this other direction and just see how it goes. Quite often, you don't have that right to say that or that ability. And as an independent worker, you can place these little bets and try these little things. Like this video you just made was really good. And maybe that turns into something,

and maybe at some point you start monetizing it. But you're not going to know unless you try. And you get to do that because you're independent. You don't have someone saying, no, no, no, no, we need you writing this other article now. You got to move on. We're not making you a video guy. And so you get that chance to take those risks, and also you get the chance to avoid putting yourself in these ruts, you know, where if you do the same thing over and over again, you're like, well, this is working, so I'm going to keep doing it. Yeah, that's great, but, you know, Buddhist is everything changes, and guess what? It does, right? So even though it's working now, you still need to keep your eyes, sea level and trying to figure out, well, which way is the wind blowing?

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Thank you to Equal Experts for their support of this show and all of relay fm i think we've sold everybody you need to start thinking about multiple income streams does that mean you just drop everything and move on yeah let's scare people now that's our next thing right now we've sold them let's scare them uh because there are there are you know there are plenty of issues here one of them is just overtaxing yourself overextending that if you don't make time and space for this, you are now doing too much. You risk throwing time and money and effort away on futility. So there's definitely risk here, and you need to make space for it, which means you're making space that if you're running at peak efficiency, and I would say this is not always the case for independent workers, where they're literally every hour that they're spending is money that they're making and everything's humming smoothly right i i think if you're doing

that then you have to make a decision about is there something that's not paying you particularly well that you could drop in order to work on some developing some new business but also sometimes you've got gaps you've got slack time where you really have, you know, don't have enough work or enough clients to fill the entire week. And you can task a little bit of your un, you know, unmarked time to do something new like this. And that's, that's something that you maybe could do. And yeah, but but even if all of that is the case, and you aren't going to suddenly be working all weekend on this new thing that might be nothing, it is important to keep in mind, it is still a risk. It is still a bet that you're placing. And so you may get lost in something that ends up being kind of futile. So you need to know

when to let it go. I would say another risk of this is just a loss of momentum. If you're doing, if you want to try something completely new while you're working on, you know, the rest of your work involves a certain skillset, um, you will be building up skill in a new area, but you also risk not spending as much time with your, uh, existing skillset and continuing to grow it and continuing to, uh, build momentum in that area. And I think it's worth at least being aware of that, that like it is potentially a distraction. And if you can't be a cross trainer, you know, you do risk if it's something very different than what you're doing now, kind of splitting your focus and not making either as good as it could be.

When we first started the podcast, I told the story at the beginning of the show how I decided to get out of the litigation business. And I'm really a poster child for someone who goes after too many multiple income streams. Being a litigation attorney, a transactional attorney, a podcaster, a writer, I'm doing all these things at once. And I realized that I was spreading myself too thin to the extent that I wasn't able to do things right. And I had to decide, okay, so what goes? Do I start, do I turn Jason down on this idea of this new podcast? Do I cut things out of my life to make it work? You're always looking at trimming these. And I decided to get rid of the one that made me the most money, which was the litigation. I mean, when people sue each other, it's like a bonfire of a hundred dollar bills. It's crazy, right? But that wasn't satisfying me. It wasn't where I wanted to be at this point in my life. So

I made a calculated decision, but I knew I had all these other income streams, but I think there's this calculus that comes into this. And as you start really getting into multiple income streams, you have to be willing to kill income streams, you have to be willing to kill your babies and you have to be willing to make tough decisions as you place these bets and say, okay, this is working or this isn't. And this is, you know, I need to stop with this one. And I think one of the risks of multiple income streams is just going in a hundred percent and not be willing to stand back and look at whether it was worth your time and effort. And I think you need to do that often. This goes to something that we're going to talk about,

I'm sure, in a future show. But when we talk about managing money and accounting and things like that, I think that's actually an important part of the multiple income streams. We're talking about income, right? We're talking about different things that are paying you money. And one of the important things about this is to have, maybe it's every year at the end of the year, maybe it's quarterly, maybe it's monthly. It depends on how much effort you want to put into this because every hour that you spend calculating out your, you know, making charts about your income streams is an hour that you're not working.

So you have to decide what the right approach is for you in terms of getting the data in a timely fashion versus the work that goes into that. But that's an important part to take stock and have some discipline about it and look at what you're doing and say, what is the actual income stream here? Because what you don't want to do is make judgments based entirely on feel of like, this feels good. It's like, it feels good, then you probably should keep doing it. But if you realize it feels good, and it's losing you money, and the ones that don't feel quite as good are the ones where you're surviving, then you need to know that, right? You need to know how to make those decisions. So some of this is about data, you need to be aware of what it's costing you or what it's bringing in.

When you look back, especially if you've got lots of different streams, because that's one of the ways you make the decision to drop something that you can afford to drop. Even if it's one of your more lucrative things, if you decide you don't want to do it for other reasons, you need to have the data to make that decision. If it's all just kind of fuzzy and goes into your bank account, then you could make bad decisions. Yeah. So when do you decide whether you cut something loose or not? I don't know. I'll tell you when I do it. No, it's a tough one, right? It's tough to make that decision. And I think there are lots of reasons you make it. You make it because you decided it's just not going to work out and you've put enough into it. You make it because it decided it's just not going to work out. Um, and you've, you've put enough into it. Uh, you make it because it's costing you too much. Uh, you make it cause you decided you don't like it or you're not very good at it. There are lots of, lots of reasons to do it.

Um, and they don't, they're not all financial. Some of them are like you said, like with litigation, like personal, I don't, I don't want to do this. But sometimes it's literally like, I spent 20 hours a week on this sort of work, and it produced a fraction of what the other 20 hours of the week did. So why am I doing that? And having that moment of like, I know that this is a thing that I could do and make a little bit of money from, but imagine how much more money I could make from this other thing if there is another thing to be had. money I can make from this other thing if there is another thing to be had. I think that there's a lot of different ways to look at it, but having a disciplined approach, I think, is the key to be able to stop and look and think and make some decisions from a little bit of remove from, like you said, from your babies to be able to say, I'm proud of the work I'm doing there, but it's not working out. You're shutting down part of your own business, right? That's hard. But, uh, if you don't do it, you will just say yes to everything and, uh, and run out

of room for the next big thing that might be even better. Yeah. It seems to me like it's like balancing dollars and delight are the two things in my head. It's like, is this something I really enjoy doing? And is this something that makes me money? Because our goal for this show is for you to continue being an independent worker. And so you can't just think about delight because you may end up putting your resume out and looking for a job pretty soon if you're not making any money. But at the same time, you're an independent worker. You should not just be all about the dollar either.

So there is a balance there. You should not just be all about the dollar either. So there is a balance there. And the beauty of this stuff is once you start doing multiple income streams and you place these small bets, if you do it right and if you're willing to assess and decide when to kill the babies, occasionally one will come along that turns into something. And I think that is really wonderful when it happens. And I think that is really wonderful when it happens. Just an example for me is I've been writing books for all this time, and people were asking me, well, can you give us a really good book on a particular app?

And what they really were looking at when I listened to the question is they don't want me to write a book about how to use this app. They want me to show them how to use the app. So I'd start doing these video field guides, where it's just a screencast. Much easier to produce than a book. I don't have to have editors. I don't do layout. I just make a screencast much easier to produce in a book i don't have to have editors i don't do layout i just make a screencast still a lot of work but much easier and so i tried that as a small project and now that's turned into an entire line of business for me where i release two or three of these things a year and they make good income

i love making them and people love buying them and that's only happened because i was willing to place a small bet on saying well here's a different way to solve that problem. Let me see what happens. And you're an independent, so you can do that. No matter what it is that you're doing to make your living right now, there are some little bets you can place. And maybe one of those will be the thing that gets you not necessarily from year one to five, but gets you from year five to ten. And by placing the bet now, you're going to make that happen. Yep. I couldn't say it better. It's so true. You got to place the bets, I really think. It's a good, healthy thing to do. And some of them will turn out. And let's not

forget, some of those income streams that seem really reliable now won't be in the future, really reliable now um won't be in the future probably just chance the chances are that some of them won't be so you end up backed in a corner if all you've got we're back to the top right we're back to the one big client here you have one big income stream uh and you haven't developed new ones then if that one goes down you now have no business. So always, always good to, and you know, as a human being, Oh, being open to new things. Like you should always be striving for new things to learn something new, to try something new, to have that be part of what you're doing. That should always be as a professional worker, not just as a person, like as a professional worker, open to new ways of doing things and new kinds of things that you could do. I think that's

how you avoid, I mean, that's how you avoid stagnation. It's how you keep being a viable professional. As you get older and the world moves on, you got to move with it or you're going to be left behind. Exactly. And it's fun. It is fun. And the final point for me is, you can do, I've said this once, but I just want to me is you can do I said this once but I just want to emphasize you can do this because you're

independent if you're punching a clock somewhere you don't have the power to do this so do it

I couldn't have said it better myself I think we have covered this one so we're going to thank everybody for listening

you can see all of our episodes and get links to email us by going to relay.fm slash freeagents. You can also tweet at us at freeagentsfm on Twitter.

So until next month, we're actually skipping the next fortnight because of the holidays. We'll be back the second week of January. David, it's been a pleasure as always. See you next time, Jason. Thank you.