The richest people in the world are not remarkable talents like Steve Jobs, Bill Gates, and Elon Musk rather you can get rich by creating multiple streams of income like portrayed on the Book: The Millionaire Next Door by Thomas Stanley and William Danko because it delivers the home truth that you don’t need to be a captain of industry in order to make it. It’s about how you manage your money and, crucially, where that money comes from.
My research has taught me that to be rich you need to have multiple streams of income. It’s the secret to getting rich.
Here’s why multiple streams of income are so important, and how to go about creating them.
Multiple Streams of Income
Most people have a single stream of income: their job.
Unless you’re in a protected industry, like medicine, you’re never guaranteed to have that stream of income forever. Your industry could be automated. You could be fired. Demand could fall away.
You lose that stream of income you lose everything.
I would venture to say that 90% of the world is in this position. Yes, you can get rich through a single stream of income, but you’re never truly safe until you can retire.
Gone are the days when you could work 40 hours at the same factory for 40 years. The Baby Boomers had so much more security in their jobs than we do. These days millennials switch jobs all the time because they have to. You are guaranteed nothing.
Multiple streams of income offer security against the changes sweeping across the world. If you’re unlucky enough to lose one stream of income, you know you have the safety of another.
So how many streams of income do you need?
The Magic Number is Three
The more streams of income you have the better.
But the average millionaire has seven streams of income. So why do I recommend three? It’s simple. These seven streams of income are not totally and completely separated. They really boil down to three things accessible by the majority.
After all, most of us don’t have a real estate empire to create a big stream of income.
The key to having multiple streams of income is diversification.
Similar streams of income could be lost by a simple change in the economy or to the industry you happen to be in. You need options that are independent of each other.
My advice is that you need three types of income that are generated from: physical, digital, and services.
The Three Types of Income
Let’s go deeper into what I mean by physical, digital, and services.
Physical — These are physical products. It could be something as simple as selling some handicrafts on Etsy. Even today, there’s always a demand for physical products. When the online economy has hit a downer, you can switch to good old physical products.
Digital — Digital products are things like courses and eBooks. You might be like me in that you sell eBooks on Amazon. You could also be someone who owns a graphic design business and specializes in designing company logos.
Services — Services are things like consulting and mentoring. You’re offering a service to someone else. For example, an SEO consultant is offering a type of service. There’s no physical or digital product that’s delivered when the project ends.
I personally recommend a focus on business services because businesses, generally, have more money to spend.
How to Create those Streams of Income
I’m not claiming to have got this totally right. I continue to work towards developing streams of income.
Take note, when I talk about streams of income I’m not talking about investing in your IRA or buying real estate.
They only count if you’re taking out dividends or generating some sort of rental income (or if you’re into flipping houses).
A stream of income is something you can take advantage of now. If you can’t benefit from it now, it’s an investment. There’s a subtle difference between the two.
So how should you approach creating a stream of income?
First of all, you already have one. If you’re employed you have a stream of income. That’s your primary stream of income.
Now you have to focus on what many people call a side hustle.
Think about what you’re good at and what talents you have. How can you turn that into money?
For example, maybe you enjoy painting during your downtime. If you’re a competent painter, consider how you might start selling some paintings. With platforms like Etsy, it’s easier than you might think.
You may even want to start crossing over into other mediums. I recently started painting coins to alleviate my boredom. That could be another option for a painter who wants to generate an income.
This is a Lifetime Pursuit
There are no quick and easy fixes for establishing new streams of income. To sell services and digital products, you need to build up your reputation and authority within your chosen field. It takes months and years to do this.
You need to be in this for the long haul or it’s just not going to happen.
The best time to start is yesterday. The second best time to start is now.
With how crazy the world is getting and how unstable things are, you need to have an ‘out’. The company you work for and the industry you work in could collapse tomorrow.