In a past post I laid out the importance for anyone on their journey of building wealth to have multiple streams of income You NEED Multiple Streams of Income! – Wealth Builders Forum.
In fact, I laid out the case that it was critical to create at least 5 different income streams in order to ensure that we have the ability to build wealth in any economic situation and be able to withstand financial setbacks should one or two of these income streams take a hit or dry up all together.
Having a job is risky
However in the world where we are an employee and have just one income stream, ALL of our income is tied up in that one job. And to add insult to injury, that one job is controlled by the whims and desires of someone else. In this day and age, you need different streams of income.
The fact that we have no control when we work for someone else, amongst other structural reasons, is why it is critical that we have multiple income streams.
As I made the case in that prior post for 5 different income streams, it’s important that we create some context from which to build these income streams so that there is some synergy between these 5 different income streams to the greatest extent possible.
This will provide for us to have the maximum leverage possible from the content, the delivery channels and even the target market.
The first income stream – Create a business
The first income stream that I recommend is business income from creating a business. As you know from reading my other posts, creating a business provides for several significant advantages from tax advantages, retirement benefits, expense deductions and leverage of other people’s time and money to name a few of the advantages.
It is also one of a very few income sources that has the ability to develop exponential income returns on the time that someone spends in creating that income. Case in point is that businesses create value that is in excess of the time invested to create that value, or profit, and returns are not necessarily ‘straight line’ as the returns are on someone’s time when they are an employee.
Second income stream – Income generating property
The second income stream that I recommend creating is owning an income generating property.
In my opinion it is not as important as to what type of property it is as long as it’s a positive cash flowing property.
The ultimate situation is to purchase a property whereby you get to live in it rent free while someone else is paying your mortgage for you, a tenant or two, and where you also get to put money in your pocket at the end of the month.
That is obviously the ultimate goal, to live free AND get paid to do it.
The important thing is that as it relates to property ownership is that we are getting PAID to own it, NOT paying others to own it. The latter describes what most Americans call the ‘American Dream’.
I find it difficult to understand how paying out of my pocket each month for the privilege to live somewhere is the ‘ dream’ when an easier alternative is to own a property where I get paid to be there. Now THAT is the ‘dream’.
Third income stream – Investment portfolio
The third income stream to create is an investment portfolio of paper assets such as stocks and bonds. I believe that when you have time to build wealth it can be done without taking substantial risks. I also believe that when you have time you don’t have to be a financial genius, nor do you particularly need to have a deep understanding of what stocks or investments that are needed to be purchased.
For most Americans this is a radical concept to hear due in large part to the amount of propaganda that is pushed upon them suggesting that you have to be a financial soothsayer and make the right ‘bets’ in the stock market in order to build wealth.
This is compounded by the popular culture of the day that pushes consumerism first and investing as a much lower priority that can be addressed much later in one’s life.
In fact, these same pundits suggest that you can have everything now and wait to the very last minute in order to invest for the future.
However, that careless approach only forces individual to make risky and inappropriate investments which is not a strategy it’s hoping to be lucky!
Instead of hoping and praying to get lucky, a better approach to building wealth is to simply own the market through an instrument like an S&P 500 Index Fund.
In this approach. which I think is one of the best multiple streams of income, not only do you not need to pick winners and avoid losers, you simply have to mirror the market by buying it. Although as they say that past performance doesn’t predict future results, this approach allows for a much more probable chance of building wealth over time with less overall risk than trying to pick winners.
Forth income stream – Digital assets
The fourth income stream is to create a digital ‘asset’ or digital product that can be created one time and then sold multiple times. This of course is one of the most lucrative ways to create income due to the fact that the time invested in creating the assets are limited to what it takes to first provide the asset but it can then be sold an unlimited amount of times in the future.
This of course is the formula for how some authors and content producers have become some of the wealthiest individuals.
Although these digital assets can of course be on any topic, the better strategy in order to leverage the time being spent on creating these assets, as well as the opportunity to cross market them, is to create a digital asset in direct support of the primary business that we create.
By doing this, we can create a closed loop whereby customers can come in from either of these ‘portals’ but still get access to either of these products or services that we’re selling leveraging all time spent on both.
Fifth income stream – Instructional programs
The fifth income stream is to create an instructional program of some sorts based on your expertise that you can sell in a ‘one to many’ model such as in a workshop or a seminar format.
More specifically, this is an opportunity to create an in-person program that you are able to use as an initial entry to build a relationship with a customer base that could grow into the development of other programs or enhance services, such as high-end master mind groups or coaching cohorts.
In a similar vein as the creation of digital assets, it is highly beneficial to create instructional programs that are within the same content area as the primary business.
This once again has the possibility of leveraging all other content, products and services that have been created for your target market.
Summary
Although there are not necessarily fail proof streams of income, the 5 outlined in this post are ones that can provide a solid foundation for creating the overall framework that builds wealth in a methodical manner.
Income is the fuel for building wealth and having multiple sources of income. The TRICK is to pour as much fuel on the fire as possible!
