Mountains & Valleys: How to Bridge Inconsistent Freelance Income
It’s called many things: “Feast or Famine”, “When it rains it pours”, “Mountains & Valleys” (my favourite term), etc. But they all mean one thing:
Freelancers make inconsistent income. It’s just the nature of the beast.
Some months a freelancer can make tremendous money, and other months their income can plummet to the ground. It can be frightening, especially for those who are toying with the idea of diving into the world of self-employment but are used to a regular monthly paycheque.
As of this month, I have officially been self-employed for two years (woohoo!). In that time, I can most definitely say that there are two realities when it comes to the nature of self-employed income:
1. You MUST expect, and prepare for, inconsistent income
When I started out back in September 2012, I understood (to some extent) that inconsistent income was the territory I was getting into. I knew I wouldn’t be getting a paycheque every month, rather I’d be getting paid whenever I completed a project for a client. I’d heard of the “mountain & valley” concept before, but what I didn’t realize is that the cycle itself is very unpredictable.
The nature of the mountain & valley cycle
What do I mean by this? Well, the cycle doesn’t look like this:
The cycle looks more like this:
As you can clearly see, the unpredictable nature of the “mountain & valley” cycle is even more unpredictable than you might imagine. It can be stressful! It’s not uncommon for a freelancer to make 5-months worth of income in a single month, and then the next month barely have enough to pay for groceries. Seriously, last year I experienced a tremendous mountain & valley period where, in one month I made a CEO’s salary, then the following month I made $708.75. I’m not kidding, check this out:
Where freelancers run into serious trouble is when they inflate their lifestyle costs because they think they’re rolling in the green. As a freelancer, you need to know that if you make 5-months worth of income in a single month, you’re probably not going to make that money every single month — so don’t spend that money like you will! You must put that extra money away to help you get through the times when you make less money than a minimum wage pre-teen who just got his first job at a fast-food chain.
A better way to play the game
After only a year of being self-employed, I quickly realized how the game worked, and I thought to myself: there has to be a better way to play the game. With a little newborn baby, and a lovely stay-at-home momma to support, I knew that living off of an inconsistent freelancing income for the long-term wasn’t going to be good enough. Don’t get me wrong, I made enough money to support our simple, minimalist lifestyle, but I knew that to be truly successful in my self-employment, I needed to create a consistency in my income. I wanted to climb the mountain, and stay there, you know? I needed to create multiple sources of income, rather than relying on just one.
That’s when I realized…
2. You can build a “bridge” across the valley
I know it’s not a totally new idea, but for me it was! Like building an actual bridge, there is a lot of work involved, and it may not be perfect at first, but eventually it will get you across the valley. So, I set out to find ways to build multiple income streams (a.k.a “the bridge”), and I came across a real winner…
Teaching online courses
I thought, hey, I have a skill that people pay me to use. Why not get people to pay me how to teach them that very skill? That’s when I came across Udemy and started building my very first
course bridge. And guess what? It worked! The first month I launched my course I made $247. Within 4-months, I’d made nearly $1,500 in passive income from a single course!
Today, passive income accounts for more than 50% of my total monthly income. Although, I still experience financial ups and downs, those income valleys have bridges built across them.
The best time to build your bridge
I discovered something fundamental when it comes to building additional income streams: The best time to build your bridge is when you’re down in the valley.
The reason why is because when you’re climbing the mountain, so to speak, you’re likely busy working on projects, and making money. But when you’re in the valley, you’re not busy and you’re not making much money. This is the best time to create your product, design your online course, write your book, start your blog, etc. because you have an abundance of time, and you can really focus on finishing that bridge. That way, when it’s time to climb the mountain again, your additional income stream (in my case, online course) might start gaining momentum, and when the next valley comes, you just might have a little extra money to carry you across.
Have you built your bridge?
Are you self-employed? A freelancer? What are your experiences with the “mountain & valley”? What methods have you used to build your own bridge? I’d love to hear your stories, so please don’t be afraid to share 🙂
Hi Ho, off to build my bridge I go.