Picture this: A small stream flowing in your direction. Hundreds of bills floating in the water. All you have to do is reach out and grab a handful as if drifts by. But this is not the only one. There are three, four, five, merging to create a river of cash. And there is more than one river, too. In fact, there are dozens of them, all flowing toward you with all the financial wealth you can possible imagine. That is the essence of multiple income streams.
How Big Can You Compound Your Thinking?
The issue with this question is that what works for one person may not for another. Whether you have been told to become an expert in a single activity or to spread yourself in several directions, no one course of action is right for everyone. Bear in mind that no single investment should ever make or break you. If you put all your eggs in one basket, so to speak, you are at the mercy of that single venture.
How to Create Multiple Income Streams
A possible solution is scattered focus. Two wealth-building concepts are in opposition to each other: focus and momentum. Common sense suggests that your core business or expertise should be your primary focus. However, there are times when your business will lag or be seasonally slow, and your time might be spent in another endeavor.
This is the cycle of business, and the cycle of your business is one of the most important things you need to study. Cycles define cash flow, payroll, inventory, and hosts of other business variables. Before you do anything else, become an expert on your business. If you get it running smoothly, to where it functions on auto-pilot, you have your first stream.
Once you have this first business, you can focus on beginning another to run in the off-season of your primary business. This second business becomes your second stream, and you are not utilizing the concept of multiple streams of income. You can continue this pattern as your time and expertise allows.
How Does It Work?
Like a good sports team, each income stream plays its role for the benefit of all. One business should be a reliable income producer. So long as you have a reliable income producer, your financial survival is ensured. The other businesses you build can have the potential to make you rich, should that be your goal, and can also run at higher rates of risk than your main business.
However, make sure you always keep your eye on your primary business. Unless you are an extreme risk taker – and in the financial world, that can spell ruin – then make sure you prioritize your overall survival. Say there is economic uncertainty. Banks are failing and losing solvency. First, make sure your assets are protected by staying within the current limits of FDIC protection at any one institution. Make sure you also have some of your assets in cash in case of emergency. Keep these fail-safes in place, and you can benefit greatly from multiple streams of income.
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Examples of Multiple Income Streams
Now that you know a little bit about what multiple income streams look like and how they work, what are some real life examples of multiple income streams and how can they help you financially? Below are a few great examples of combining multiple income streams for your financial benefit:
- Investing. Investing is one of the best ways to start your streams of income. Placing some money in the stock market, mutual funds, retirement accounts, etc. can help your money make money for you and it is a great source of secondary income. Investments, however, are generally used for saving and planning for the future.
- Side Hustle. If you’re looking to have extra money in your pocket finding a second job or a side hustle is a really great way to establish multiple income streams. You can find a job on the weekends or even start your own business. For instance, many people have generated additional income as a freelancer. You can generate as much extra cash as you want (depending on the time you’re able to put in).
- Rental Property. Have an extra property or even an extra room? Try renting it out! You’d be surprised at how much additional income this can generate. Many people have begun using AirBnb to rent out rooms in their homes (or entire homes) to people visiting their area. This is a great way to add some cash to your pockets.
- Passive Income. Along with the above three ideas, establishing a source of passive income is a great idea as well. Now, investing and rental properties can be considered passive income. However, this point is focusing more on things like creating an ebook to sell on Amazon that you can earn money from over time. This can also be things like having a blog that generates advertising revenue or even creating an informational packet about something that people purchase online.
No matter your reason for looking to establish multiple income streams, making more money is always a positive thing. Check out the video below for even more ideas on how to create multiple income streams:
Photo: Bliss and Business