Want to Become a Millionaire? Create Multiple Streams of Income
Creating multiple streams of income isn’t just a survival technique, it’s also a strategy for building wealth.
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At my last job as a recruiter, I would often interview people who lost their jobs from one week to the next.
It was during this time that I realized I had to always make sure I had money coming from different places, so I freelanced on the side of my day job and worked on a blog in the hopes of making some money from it someday.
While I didn't know it at the time, I'd figured out something most millionaires already know: you always need to have multiple sources of income.
As it turns out, having your money coming from multiple sources isn't just a survival technique, it's also a way to build wealth.
How many streams of income do millionaires have?
Tom Corley, author of "Rich Habits", studied the habits of millionaires during a five-year study of the rich and poor. Here's what he found as it pertains to most self-made millionaires and their income streams:
• 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.
And if none of them are suffering? Well, then you're making a ton of money.
Here are some of the ways you can start creating multiple streams of income in your own life.
If you still have a regular job, start a business.
Want to know another habit of millionaires? Most of them have companies. According to a study by the Economist, about half of the world's millionaires own their own businesses.
If you already have a business, great! You're on your way to becoming a millionaire.
If you don't, consider ways to start one. At first, it may look like extra money, just as it has for many of us employees turned business-owners. But, eventually, you may be able to take the leap into full-time self-employment.
Find multiple streams of income to incorporate within your existing business.
Whenever I mention multiple streams of income at a speaking engagement, the audience sometimes gets confused.
"Do you mean, like, have two totally different companies?" they ask.
You could do that at some point. Just be prepared to have two full-time jobs as a result.
In my opinion, it's a lot easier to find multiple sources of income within the same business.
For example, I'm a blogger and writer by trade. I get paid to create content. However, I can also sell digital courses where I teach other people how to become well-paid writers. Or, I can self-publish and sell books on the topic on Amazon. I can also make money in affiliate sales by recommending the products I use to run my business.
But wait, there's more! I can also make money consulting. Or I can make money through ad revenue and sponsorship on my blog and podcast. Or, I can have a membership site where students can access all of my digital courses for a monthly fee.
The reason I say this is easier is that I've tried the two different businesses thing. I tried my hand at opening an Etsy shop as a means of making extra money back in 2015.
It was a lot of work, and I soon realized I was not yet at a stage with the first business where I could take some time to start a second.
With that being said, I could generate different sources of income within my first business until it could sustain itself without needing so much of my attention. This actually brings me to my next point...
Create passive sources of income.
Passive income refers to money that you earn without having to trade time for dollars. It's the ultimate form of financial freedom and, no, it's not a pipe dream.
I've been making passive income for years in the form of book sales from Amazon. However, in 2016 I decided to start kicking it up a notch by starting to offer my own digital courses and make more money in affiliate sales from my own blog.
They haven't covered all of my expenses yet, but we did increase this form of passive income significantly in the past year. I went from making a few dollars a month to now making a few hundred dollars a month in passive income from my blog, much of which is being invested.
Next step: Grow it to a few thousand.
While I'm not a millionaire yet, I will be someday and I know a lot of it will be thanks to the multiple streams of income I've created over time. What initially started as a survival technique has turned into a wealth creation strategy for decades to come.