Most people are doing good to simply have a few months worth of living expenses sacked away.
Unfortunately, however, this type of savings and investment plan is not sufficient for staying ahead of inflation, planning for a comfortable retirement and maintaining an enjoyable quality of life.
The answer to this question is actually quite simple.
You should be doing both of these things.
Why Online Businesses Are An Essential Part Of The Successful Savings Plan
Forget everything that you ever heard about online businesses that are capable of making overnight millionaires. This is rarely ever the case.
Now that more people are heavily reliant upon the Internet, there is an amazing opportunity for people from all walks of life to start successful businesses at very nominal start-up costs.
Best of all, most online companies do not require a tremendous amount of work once they have made it past the start-up phase.
For guys, this is the best opportunity to generate more revenue, have more free time and make their mark on the world.
With all the free and low-cost resources that are available to aspiring entrepreneurs, there is simply no excuse for not taking advantage of them.
When you hear phrases like “multiple revenue streams” and “passive income“, you should know that the web is the surest way to make these things a reality in your life.
Assess Your Risk Tolerance
Investors and entrepreneurs have to take time to assess their risk tolerance before diving headfirst into any new endeavor.
If you are barely making ends meet and are working hard to stay afloat, your first and most important goal is to get your head above water.
You cannot establish a feasible plan for building a stable and comfortable future until you get your financial house in order.
This means drafting a practical and comprehensive budget, paring down your spending where possible and ultimately, freeing up some of your cash so that you are actually able to start pursuing other things.
Before you begin investing in a new business endeavor, it is always best to save up a comfortable nest egg.
There are a number of reasons why this is true. Although there are many investment opportunities out there, ranging from forex trading to MLM opportunities, each one of these opportunities has the potential to result in loss.
Your ability to tolerate this loss is your risk tolerance.
You shouldn’t be investing money that you cannot afford to lose.
You also have to be cognizant of the fact that most investments with high profit potential also entail a significant amount of risk. This is just as true with a new business as it is with any other investment endeavor.
Persons who have saved a nice stash of cash, tend to be able to tolerate risk a bit better than others.
Not only can they afford to lose more, but they are also able to remain emotionally stable during the formative stages of the online business development process.
They don’t simply throw their hands in their air and cash out when their companies fail to provide immediate returns.
Instead, these persons are able to remain persistent in building their businesses, which is often essential for building a lucrative and stable company.
Establish A Balanced Portfolio
Starting a business shouldn’t cause you to throw caution to the wind. You should have a balanced approach to asset distribution.
This means that the way in which you are allocating the assets that are used to make more money for you, should not be extremely slanted in any one direction.
Don’t throw your entire nest egg into the latest multi-level marketing opportunity in order to buy in at the top tier. Maintain an IRA and other long-term savings accounts, while using more modest sums of money to get your feet wet and learn the industry.
This same rationale should also apply to how you approach business ownership.
A lot of online companies and opportunities to join them promise men you full financial freedom and the ability to leave the traditional workforce permanently.
If you are dead set on leaving your current, full-time position, you should not quit your job until your new business has earned consistent profits for at least six months to a year.
You should also have at least a full year’s worth of living expenses saved before parting ways with your employer.
If you really want stability, investing and business ownership should never be done with the primary goal of leaving the workforce.
This is something that you should only do when it’s feasible and when you have enough revenue coming in from other areas that it just makes sense to do so.
Beware Of The Online Business That Promises Overnight Returns
Creating an online business entails a lot less risk than most forms of investing that have extremely high profit potential.
You’re likely to lose a lot less when starting a company that goes belly up, than you are if trying your hand at the forex or binary options market with limited training.
Successful companies have a very simple formula.
These entities have something that buyers want and need, they offer it at a reasonable price, maintain modest overhead expenses and leverage all of the available online platforms for aggressively marketing these goods.
This results in the most efficient use of resources and time which invariably diminishes the risk associated with these efforts.
Creating Multiple Revenue Streams
In an ideal arrangement, any new endeavor you take on will pave the way for you to establish new revenue streams.
With more resources, you can start considering passive income sources. This could be property investing, using your marketing skills to create info materials to mentor others and more.
The reality is that money buys options.
If you are constantly hiding your extra money under the proverbial mattress or stashing it in a relatively low-interest account, you aren’t taking full advantage of the opportunities that are out there or your full potential.
You must remember, however, that if you aren’t careful to have some extra cash socked away, taking on too much risk could leave you without options and right back where you started.