One of the first investing/business books that truly influenced me (I was in middle school at this point) was Robert Allen’s Multiple Streams of Income. Robert Allen is a huge proponent of aggressively building wealth through business creation, real estate investing, and utilizing the power of the internet. Although many have mixed emotions about Robert’s teachings I’ve seen first hand some of his concepts work and do believe in the concept of creating multiple streams of income.
What are multiple streams of income?
Each source from where you earn money is a stream of income. If you have a job and that’s your only source of income you only have one stream of income. If you have two jobs you have two streams of income. Therefore each stream is a source of income that’s completely detached from your other streams of income.
How to generate multiple streams of income
You can generate more streams of income by not putting all your eggs in one basket. For someone who’s just starting out their streams could look something like this:
Job #1 – Your full time job
Job #2 – A part time job
Online business income
Writing Articles Online
Real Estate Investment(s)
Granted this person would be pretty darn busy, but they’d have six streams of income! If they lost one stream they wouldn’t go broke tomorrow because they have other sources of income coming in.
The whole idea of creating multiple streams of income is to alleviate your risk if any of your sources of income were to suddenly dry up. If, for example, you lost your job, would you have any other income coming into your life, or would you be pretty hard up for money?
Having multiple streams of income is a topic that I think is super important in personal finance, but isn’t touched upon all too often. So if you only have one source of income in your life I’d highly recommend starting another through passive income streams or by starting a business or freelance work on the side.
How many sources of income do you have?
Image from rachel_thecat