Multiple Streams of Income

It is almost a requirement for anyone that does not have a full time job to have multiple stream’s of income. There are many reason’s to have multiple streams of income and almost no reason’s not to. But in general if you want to ensure that you income is secure having multiple stream’s of income is the best way to make it secure.

One thing that will surprise some people to realize is that they may potentially already have multiple streams of income. However you will find that with the stream’s you currently have, will have a few keys that make them differ from the multiple streams you really want.

1. At least one of them will probably be a fixed income from an employer. More often then not this is the primary stream which pays for almost everything you need or buy. This is often the worst stream because it will often times be taxed the most, require the most time to generate and by nature is generally fixed (unless of course you work on commission or similar)

2. The second stream is based on savings, if you have managed to save some money and keep it in an interest bearing account, you are generating a second stream of income. Which is great as long as the money is in the bank the income stream will always be there. However one of the main problems with this stream of income, is that you first have to generate enough income to save money and then for the interest generated to be of a sufficient amount this savings need to be quite high. For example at 3% you would literally need more then $1million dollars in the bank to generate even an income of $30,000 per year.

3. Any other type of investment may provide a stream of income as well, which again for the most part need a much higher amount invested to return small return’s as an income stream. Which should not discredit any type of investment, as any investment which provides a positive return is surely a good idea. Especially if you have many individual investments all which provide varying levels of income, you are generating multi streams of income, which is really where you want to be heading.

Ok so the list include some characteristics of multiple streams you may already have as well as some actual variations. The whole point of having multiple streams of income is to diversify your income to try and protect yourself against the loss of one stream of income. By going along the more traditional path of sticking with a job, with an employer you are really going against one of the more problematic rules i like to work by. It is sort of a rule of percentages, in that not more then 40% of income should be generated from one source.

Generating income from working for someone else makes your potential for other stream’s quite small. Each week you start with 168 hours, assuming that you enjoy your weekends, you are back to 120 hours straight away. If you sleep 8 hours per night, then you are down to 80 hours, generally a job often requires you to be at the office, or place of work for 40 hours per week. This brings you back to 40 hours of spare time, often getting to and from work adds almost another hour to the start and end of the day so this will bring it down to 30 hours. Finally taking into account the unpaid lunch break, meal times at home and your general hygene needs, you really have maybe 15-20 hours spare in the week. Almost all of which is ourside normal business hours.

If you put all this time into perspective, though and work out you are putting about 70% of your available time towards generating often 100% of your income. Which for the most part you can replace with another job or social security, however there are much better options which can allow you to spend less time earning more income from more different sources. While it is possible to improve this to some extent, by using the other 15-20 hours to gerneate another stream of income, you are not really able to improve the percent of time that you are using to generate your main stream, due to the fact that the hours needed by your employer are fixed and unless you can get to work quicker, sleept less hours, or are qilling to give up time on weekends, then you are fixed with this breakup really.

There is a solution and an ideal solution at that to change the whole dynamic of how you generate income, and often how to generate quite a lot more then you do now. It is to generate an income from multiple streams of income working on a simple principle. There are just three rules that i am looking to work with on multiple stream’s of income.

1. No single stream should generate more then 40% of your income.

2. No more then 2 streams should generate more then 30% individually (60% combined)

3. There should be more stream’s generating less then 30% each, than more then 30% each.

Ironically these are the same three rules that i am planning to apply to my business as i begin to build it again. What these rules attempt to do is limit the potential for the loss of a single stream to mean you are not generating sufficient income. with these rules, if you were to lose your primary income stream, then you would still have close to 60% of your income. Even if you lost your two largest streams you would have still 40% until you could replace one or both. Where as when you are working for someone else you can lose your job and lose 100% of your income.

In saying all of this the last thing that i am suggesting is that you go and leave your job with the hope of generating a whole host of multiple income streams, that will replace your income that you are currently making. It needs to be a slower process that you are do in the spare 15-20 hours or on the weekends that you can slowly add a stream at a time, until the few small streams are providing a sufficient amount of income to replace your income from your job.

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