Recently I was reading an interview with Warren Buffett (the most successful investor of all time), and he mentioned that one of the key principles to achieve wealth is to diversify your investments over time.
The principle is not new (e.g., never put all the eggs on one basket), but while reading it I realized that most of us (myself included) forget to implement it quite often.
If you are an online entrepreneur you should diversify not only your investments but your income sources as well. For instance, don’t rely on a single advertising network or on a single income stream, like ebook sales. Apart from reducing your risk this strategy will tend to maximize your earnings over time.
Darren Rowse recently wrote a really interesting piece on this topic, where he shares the various income streams he developed on his websites over time. Here’s a quote:
I also would say that in each case, I started each experiment not really knowing what I was doing (on at least some level) but really seeing the experiments as a chance to learn. For example, my first eBooks were taking previously published blog posts and updating, completing and adding to them to offer readers a more convenient way to access my content.
At the time I had no idea if that would work and the design and delivery of the eBooks was fairly basic. In time I learned what did and didn’t work and was able to grow the sophistication of my delivery systems, design, authoring and marketing to the point that it’s become a fairly well-oiled machine.
The key is to pick something to try and to see whether it connects with your readership and to learn as much as you can while you’re doing it.
Bottom line: diversify your investments and income sources.