I was content to collect my 3-5% interest on this money for about the past year or so but this all changed in July.

In July I stumbled into a great business opportunity.

Peter Lynch always said invest in what you know and for the longest time time I have been looking for a great opportunity to use my knowledge to invest in medicine

It was a difficult decision but I joined a group of other physicians in creating a startup company. It has been a wild ride thus far and I can only expect it to get wilder.

What does this mean for me?

1. As usual, it means even less sleep than usual. Most of my time when I get home from work has been spent helping get this project off the ground.
2. It also means that I don’t get to spend as much quality time with my family when I am at home.
3. Most importantly for this blog is that I have essentially invested away all of our emergency savings with no guarantee of a return.

Only time will time tell whether with is a good decision or not. I could make a very strong argument for taking those same funds and investing them in a depressed market, making a long term investment in equities at a time when many of the “experts” find them to be cheap.

A few years down the road when this all settles out I hope to do a comparison of the return on investment of these two options.

For me the potential for tremendous upside was too much to pass up. Lets hope I don’t need those emergency funds any time soon.

May was another less than stellar month for our alternative income streams.

It was due to multiple reasons, the most important of which is my resistance to taking any extreme risks in the name of increased returns.

Here are the results for the month ending May 31st 2008:

There were not any large changes in my alternative income over the first 6 months of 2008

Our interest on savings has declined as the FED has dropped interest rates.

Our income from our websites have failed to generate any consistent income.

As of May 2008 the chances of developing any serious alternative income was slim to none. The main financial goals of our family was/is to remain solvent and to keep from getting further into debt as I finish my training.

Here are the results for the month ending April 30th:

My thoughts for the month:

My quest for alternative income has slowed to a crawl as my residency training intensifies.

As someone who has spent the past 12 years studying and training for my day job it is exciting to start counting the months until I am finished instead of years. My focus and dedication at work has intensified as I draw closer to the big day when I make the transition to an independent practitioner.

The next 14 months will be spent looking for all “the low hanging fruit”, making sure that I am keeping my finances simple and doing those things well while not exerting too much time and energy in low yield endeavors.

Why should I even continue to attempt to develop an alternative source of income?

One of the most common reasons given for having multiple streams of income is the security/flexibility that it provides. As someone who stands to earn a very respectable salary in a field with a very high barrier to entry I do wonder if the time I spend on these projects are the best use of my limited time outside of work.

The good news is that currently they are something I enjoy and are a somewhat productive way to decompress after work.

However as these projects become more time intensive, it places me in a bind since I am unwilling and unable to take time away from my day job and family.

For now I plan to plug along as I have been for the past year or so and see where it leads.

When I look at this list I have to ask myself; “are these really sources of alternative income?” If you take a quick look at the list of my sources of “Alternative Income”, there isn’t much alternative about it…YET.

There isn’t anything unique about collecting interest from a savings account.

Many of us had savings accounts from a very early age. The only unique spin on our savings is that over $60,000 of the balance is in the form of 0% balance transfers from the credit card companies.

The family farm is pretty unique in America today but it’s not a reliable source of income due to the challenges associated with agriculture.

This will be interesting to follow as the generations change. Will we have a younger generation interested in farming again given the surge in commodities? Will we be able to increase our profitable without becoming a large corporate farm? How will the search for bio-fuels affect agriculture in the USA? I don’t have any answers but I do believe that I will see tremendous changes in how we feed and power our world.

My venture into the wide world web definitely would definitely qualify as alternative income.

It is a field far from my formal training and is done in my spare time. How this will turn out remains to be seen. Currently I am not covering my expenses and hosting fees but the potential for this to become a secondary source of income remains. The largest challenge for this income stream will be devoting the amount of time needed to write good original useful content.

And I haven’t won the lottery yet…..

To state it plainly: Nothing Impressive

The economy is hitting the skids and the Fed dropping rates quicker than I can refresh my account page. This is causing me great angst. The main driver behind my alternative income, our credit card arbitrage, is becoming worth less every day.

When I decided to finally started to maximize my 0% balance transfers last July, I was expecting to earn 5% or more on this balance for months just by placing it in an online savings account. After the Fed’s rapid series of rate cuts, 3% is starting to look like an attractive rate. I am kicking myself for not hedging a portion of this money in CD’s when rates were higher.

Also my Internet derived income PLUNGED from an all time high of $6.36 in January to $0.16 in February. This is more in line with the historical averages of my earnings from my internet related adventures.

February was also a slow month on the farm No harvests right now and if I ever expect to win the lottery I think I am going to have to buy a ticket.

Nothing Impressive BUT, it is extra money in my pocket and yet another stepping stone on the way to financial independence.

I cannot take credit for the idea. There are many individuals that have spent the time and energy to develop a well diversified source of income for themselves outside of their day job through activities such as:

• Peer to Peer loans in the form of Prosper and Lending Club.
• Personal Retailing through their Ebay accounts
• Landlording through the development of their own personal real estate empires.
• Blogging!! with the help of Google Adsense.

Looking at that list I find all those options to be very reasonable sources alternative income to consider for just about anyone. There are some pretty amazing success stories of individuals being able to quit their day jobs and making a living with these alternative sources of income.

The catch is that their success was not instantaneous, but was transformed from hours of work by these individuals in developing, researching and refining their alternative income streams.

Most people pursuing these income streams don’t consider these endeavors work for 2 main reasons:

1. It is something that they were doing before as a hobby and would continue to do anyway even if it did not provide them with an income.
2. They are able to do it on their own terms, hours, etc… with no-one to answer to except themselves.

With that as inspiration, here is our start: (Note, all amounts are Pre-tax dollars)

As you can see we don’t have a very diversified source of income and some of the items I listed are very difficult to expand upon or grow in the future without drastic lifestyle changes. I included them more for reasons of personal accounting rather than listing them as something I can build upon.

Currently our only sources of income other than my job as a resident are:

The interest we earn on our savings and 0% balance transfers: My wife and I hope to continue to grow our cash savings even in the mist of falling interest rates.

The occasional dividend check from my wife’s family’s farm: We have absolutely no real control over this unless I were to decide to abandon the practice of medicine and join the agricultural community full time.

The money generated by the advertisements on various websites in various stages of development. Not something I am pursing as actively as others. I do have quite a few interests outside of medicine and I will continue develop them more out of personal satisfaction rather than monetary reward.

Gift money and other forms of windfall income: Something many people don’t consider but something I wanted to follow. Basically I am including things such as the stipend I get for meals on call, book fund money from my department and the $20 my parents still send on my birthday. Also when I win the Lottery, I want somewhere to make a note of this

In my defense, over the past 12 years I chose to focus those hours on learning a highly specialized skill that I hope will one day provide a financial reward to balance the emotional reward it already provides.

To protect myself and my future potential earnings I have disability insurance!!

In 2008 I hope to be able to slowly refine this metric. Over the long term, I will look to expand my sources of alternative income so they can make a more meaningful contribution to our net worth. I am very realistic however that these endeavors will never come close to replacing my day job.