The Key To Making Money Online? Diversification, Baby!


Most of us are familiar with the term "diversification". Its what the well-respected analysts tell us to do with our investment portfolios to insure against the ups and downs of the market.

But why stop there?

Just as diversification can help balance your investments, it can also help balance your income. And for those of you hoping to make a living online, balance is definitely key.

What it is

When you diversify your portfolio, you put a little into stocks, a little into mutual funds and maybe a little into bonds. You might also break that down even further, by splitting your stock investments between small cap, large cap and a few international picks.

The idea behind spreading out your investments is that if those tech stocks you bought begin to tank, your other investments will hopefully keep your entire portfolio from bottoming out.

The same is true with your cash flow.

If your primary income is generated by a traditional nine-to-five job, that's like investing everything you have in that "sure thing" stock. Companies downsize, people get fired... it just happens. And if it happens to you, you'll be in a bind to find another nine-to-five gig quickly before your savings runs out.

And if you're making your money online, this is even more true.

How it works

When I first started freelancing online, I set up my website and bought a membership with Upwork. In all honesty, these two simple things have generated a pretty decent income.

But... there are times when business seems too slow. Maybe people don't need any new copywriting done, maybe their cash flow is tight that particular month or maybe, just maybe my competition beat me out on a particular gig. It happens.

*Sigh* what to do... what to do?

Well, I could sit and wait for the money to start rolling in again but I don't think my mortgage company and credit card people would be happy with that solution. I could take on a part-time job to fill in the gaps but then what happens when the gigs start rolling in again?

The solution is diversification and here's how it works:

In addition to my freelance writing biz, I also have a couple of different blogs that I own, each utilizing a number of different advertising strategies from Adsense to affiliate programs to selling space directly to advertisers.

I've also written a couple of e-books (with more on the way) that I sell through e-junkie for a mere $5 bucks per month. The Working Girls Guide to Financial Freedom sells for $14.95 and the Casting Some Link Bait e-book is just $8 bucks. Not a huge profit by any means but multiply those amounts by even 100 buyers and you can quickly see the point of my efforts.

Can I stop there?

Not hardly. I've also recently set up a Cafe Press shop . Granted I've only got four products featuring two designs but hey... its a start and as I continue to add inventory and promote the shop, who knows?

I also write for which is a regular paying gig, based on page views. So, even if my freelance clients aren't buying up new services, my About money is still coming in.

Other ideas for diversification?

Do you like to build birdhouses or make soaps or something similarly craftsy? You could set up an eBay store and sell your wares.

Don't have your own creations to sell? How about dropshipping items for other companies? New Age Reseller has a great guide that includes hundreds of new age companies looking for people to dropship their products. And if you're not into candles, incense and yoga videos, just do a search for dropshipping in your favorite search engine. There's plenty out there to choose from.

Take affiliate programs for some of the bigger companies one step further and create a mini-site devoted strictly to promoting their product. Clickinsure has a good one as does Net Zero , The Company Corporation, and US Search.

Like to write? In addition to the ideas mentioned above, you can also get paid to write reviews. Sites like ReviewMe , PayPerPost and Blogitive will pay you a set price to review products and services on your blog. That means extra content for your site plus a little extra cash for your efforts.

And let's not forget about donations. Yes, donations. Create really good content and people don't mind paying you for your time. PayPal has a really easy donation button that you can implement on your blog, making receiving those donations a snap.

Enjoy giving your opinion? Then turn that into some green by taking surveys. Paul Michael has a great article on what to look for when searching for reputable survey companies.

The point is that there is more than one way to generate an online income so why limit yourself to just one? And if you are still relying on a nine-to-five to pay your bills? Well, there's no reason you can't implement some of these ideas too. Who knows? You might just create a new source of income that allows you to create your own reality.

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Myscha Theriault's picture

That's one of the best articles I've read in a while, Kate. Thanks!!!

Guest's picture

Wow, that was a really good article. I can not wait to try some of your suggestions. Being a blog newbie I love to learn new things.

Catherine Shaffer's picture

Great article! I don't make a living "online" but one reason I got into blogging was to add another stream of income to the mix. I have about half a dozen regular freelance clients, and probably half a dozen irregular ones, which has been great, because when inevitabl work dries up for one client, it's not a disaster. One thing I'll add is that you should invest a little bit of your working time looking for new sources of income to replace clients, customers, web sites, or whatever that peter out.


Catherine Shaffer

Wise Bread Contributor

Guest's picture

It's funny, no matter how long I am in the business, I learn something new every day. It's almost overwhelming trying to keep up with the zillion different things you can do to make money. If you have a list you've created in a previous blog that is similar to this post but perhaps written in a list format, can you point me to it?

Thanks again,


Paul Michael's picture

I've been writing in my spare time for a few years now, and I had no idea about some of those great resources. Thanks so much Kate, a rivetting read.

Linsey Knerl's picture

You sound very much like me in my business plan.  I never thought of myself as diversified, until now!  I also agree with Cathering is that you will need to spend a bit of time looking for new jobs, clients, etc.  I factor this time in when I determine what kind of hourly rate I need to be profitable.

Thanks for sharing!

Philip Brewer's picture

I think there's a constant tension when thinking about adding additional sources of income, because it's almost always more remunerative to pick the "best" source of income and focus all your efforts there. Even places where additional effort doesn't result directly in extra income (a salaried job, for example), it's probably the case that extra effort will produce more job security and larger raises--and that the total income will be greater than spending the same amount of time and effort on sources of "extra" income.

Having said that, I think diversifying income sources is a great idea, and I hope more people follow your advice. Focusing entirely on the "best" income source is a high-risk strategy that often pays off during good times, but in bad times, a diverse set of income sources can save a household all manner of difficulty.

It's best if people think through what they're doing, though. Otherwise, a simple-minded looking at the numbers can leave them disappointed with the results of their diversification efforts.

Kate Luther's picture

When one stream of income ends, you'll need another to replace it so it definitely pays to be on the continuous lookout for new clients, etc. And of course, the resources I mentioned are nowhere close to a complete list so the more ideas you can come up, the better off your bottom line will be...

I'm glad everyone liked this one -

Cullyp: I don't have a similar post in a list format, but that's a good idea... let's see how many resources I can find to make money online... keep watching for the list :)

Guest's picture

I started one website about 8 years ago, added another about 3 years ago, and now I'm up to about 10 websites that I built and manage by myself. I made a little over $100k last year from the sites - not bad for a hobby!

Guest's picture


I read your post about your "hobby" websites which are creating a very good income for you. If you have the time, would you mind sharing the URLs and any other info that you're willing to share about how you generate sales please?

Thanks in advance for your time!

Kate Luther's picture

$100K from websites? Now, that's impressive! Out of curiosity, where does the bulk of the income come from - adsense and related advertising or do you sell products? Inquiring minds want to know :)

Guest's picture
Minimum Wage

2-4-6-8 it's great to diversificate!

Kate Luther's picture

I love having a cheering section :)

Guest's picture

This could be one of my favorite posts. Ever. Now I have no excuse not to open a cafe press shop, start the blog I have been thinking about for the past year or just open up additional streams of income. If only needed a guide to procrastinating... After reading many personal finance blogs I can say you have almost everything I am interested in right here at wisebread (and well written too)! Go Kate go!

Guest's picture



I've had great success with Cafe Press. My income from Cafe Press pays for more than a few bills. I noticed that you have a basic shop set up. One thing I would do is spring for the premium shop. It allows you to do a lot more and offer a lot more products.


One thing that has helped me with Cafe Press is to diversify there as well. I have three shops with different niches. 

Guest's picture

Almost all of my $100k comes from affiliate sales. One merchant made me about $30k last year, then the rest trickle down from there. Adsense only accounted for about $6k for the year.

Diversification by time has worked well for me - I have a travel site that has a lot of traffic from April-September, then a few gift sites that get a lot of play around the holiday season. It isn't like I can truly take time off, but it does mean that my lowest month last year was about $5k, and I had 4 months of $11k-$12k. So I've got that going for me. :)

If people are into this sort of thing, I'd be more than happy to help out with advice or whatever.

Guest's picture

I think that there are many of us who would love to hear more from you. Do you contribute over at the forums? It's a great group!

Guest's picture

Thanks for this great article. You've inspired me to up the ante and work more on my freelancing!

Guest's picture

This is the post that helped me to really focus on my attempts to find diverse income streams both on and offline. I knew I was on the right track, but your post helped me put it all together. Thanks for not only some very good ideas, but also explaining how you have tried to diversify. Great post!

Guest's picture

I like your multiple ways of making income. I especially like freelance opportunities online that you that you mentioned. I have never heard of ReviewMe, PayPerPost and Blogitive before. I will check out all three of them very soon. Thank you, for taking your time and energy in posting this.

Guest's picture

Great article! Thanks for listing suggestion sites! No one does that and I have never heard of elance!

Guest's picture

I think a few of the other key points when trying to make money online is to take action, be consistent with your efforts, and be persistent and not give up in the face of failure. Not doing these things are really the reason why most people have a hard time making money on the internet.

Those are some good references and sites you've pointed out to get a lot of people started as well!