More Baskets Means More Streams of IncomeI have had a couple of times in my life when I felt the sting of having all or most of my eggs in one basket and watched with chagrin as the basket got knocked over and my cash flow dried up. I continually try to correct this situation by diversifying my income to generate wealth from many baskets.
I receive most of my income from exports to Japan. I ship all types of trailers and diesel pickups to Japan — mainly camping trailers and Ford F-250 and F-350 trucks. 2004 and 2005 were great years for me, but in 2006 the U.S. dollar and the Japanese yen exchange rate went against me. It cost my customers 30%-35% more to buy from me, so they stopped buying. My cash flow from that source of income completely dried up. It was a tough year because I had put too many of my eggs in one stream of income basket and I soon found myself living on half of my annual income! This was not my fault. It was something that I could not control. What was my fault and what I could have controlled was that I coulda’ shoulda’ created more streams of income, so I wouldn’t have become dependent on one stream of income. No matter how lucrative that income stream might be (like a good job) at the moment, you never know when it can dry up. Lesson learned, yes? Well, no. I didn’t learn my lesson in 2006. In March of 2011 the earthquake and resulting tsunami in Japan dropped my income from Japanese imports to zero. That slump lasted from March until December. My main stream of income simply dried up and I finally learned my lesson. Multiple streams of income is not just a good idea, it is critical for financial security. I am surprised I survived 2011, but I did and this time I learned my lesson.
Think Like a MillionaireDo millionaires have multiple streams of income? Yes. Do they make money while they sleep? Yes. Did these millionaires, do this before they were millionaires? Yes, that is how they became millionaires; and before they were wealthy, they first became financially secure. That is how they got wealthy and obtained financial freedom. That is how they will stay wealthy. If you would like to increase your net worth and not worry about uncontrollable events like the earthquake driven tsunami of 2011 sabotaging your efforts, it is absolutely essential that you develop multiple streams of income.
How Many Streams of Income Should You Have?Well, how many streams of income do most millionaires have? Amanda Abella answers this question in her article “Want to Become a Millionaire? Create Multiple Streams of Income.” Tom Corley, author of “Rich Habits,” reported the habits of millionaires following a five-year study of the rich and poor. Here is what he found as it pertains to most self-made millionaires and their penchant for creating multiple streams of income:
65% of self-made millionaires had three streams of income. 45% of self-made millionaires had four streams of income. 29% of self-made millionaires had five or more streams of income. Having multiple streams of income is the same idea as diversifying your investment portfolio. When one income stream suffers, the others make up for it.
The Benefits of Multiple Streams of IncomeThis website is not about helping you become a millionaire; it is about creating financial security. Assuming, that millionaires have multiple streams of income and you create financial security through multiple streams of income, there is a good chance of you becoming wealthy. In addition, it is likely that you will achieve peace of mind and a happier life as you create financial security through multiple streams of income. Becoming wealthy is just a side-effect — a side benefit — of creating multiple streams of residual income.
A Great Job Is Not Enough
Do you have a day job? That’s okay, but it’s not financial security. You are not likely to become a millionaire or create financial security by working for someone else. Why? Because you need to control the sources of your income, so that if you lose your job, you won’t lose your income. If you have a job working for someone else it is almost never secure because someone else is in control of your personal finances.
Recently, a friend with a pretty good job was told that his employer had eliminated not only his job, but the whole department that he is working in. His last day is December 7th. That’s a terrible time of the year to be laid off. Actually, December is a great time to be laid off if you are financially secure. You will have the time and money to enjoy the holidays with your family. You may say, “but, I have a day job. How can I build multiple streams of income and create financial security if I’m working full time? How will I find the time to do this?” If this is your situation, then you had better manage the time you have. You are probably screaming at me, “You don’t understand! You don’t know me, I don’t waste time!” Actually yes, I do understand. You are not alone in your frustration. Everyone says they don’t waste time. In reality they do. I did, and I still do — so do you. So if you really believe you don’t waste any time you are delusional. The fact is we all waste time, mostly because we don’t have something exciting or cool or interesting to focus on like creating or finding opportunities to create multiple streams of residual income — passive or otherwise.
Consider a Side HustleTo receive multiple streams of income, you must start a side hustle or side business. That is going to take more time than you think you have. The fact is, everyone has the same twenty-four hours, some just use them better than others — possibly because they are interested in and committed to creating multiple sources of income. As you focus on creating side hustles, make sure your efforts lead to passive residual income streams. Common streams of income – you could start a blog, create an online course, write a book or purchase rental property. That is what will provide financial security and possibly a millionaire income.
Walking the WalkDo you hate it as much as I do when someone tells you to do something that they are not doing themselves? Yes? Okay, so, how about me? Have I done this? Have I created multiple streams of income? Indeed I have. I’m always doing it. For me it’s fun, but fun or not, it’s necessary. Remember, I’ve never had a real job, so creating multiple streams of income is how I’ve managed to not just survive, but thrive. Multiple streams of income have provided a nice standard of living for my family.
I currently have five streams of income. I am working on number six and seven. Some bring in thousands a month. Some bring in a couple of hundred a month, and that counts too. When it comes to multiple streams of income every little bit helps. Size really does not matter, it’s the consistency of the income stream that matters. Some of these are passive income streams and some of them require maintenance — some a lot of maintenance. They all, however, are residual and that is what really matters.