This article was written by Lynn Joseph on behalf of Sherley Altidor.
If you’re tired of living paycheck to paycheck, I’m here to tell you it doesn’t have to be that way. I’m here to remind you that your main stream of income is not a sufficient amount of financial security. At any moment, anything can happen and a job might not be available to us. So what happens then, especially without savings? This is why the side hustle, multiple side hustles if possible, are so important when it comes to building wealth. Multiple streams of income ensures your financial security in ways only one moderately sized stream of income never can. Multiple streams of income can and have at many times been what has kept so many families just above water. If you’re tired of depleting your finances instead of accumulating, I’m talking to you.
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You might be able to create enough side hustles to the point where one stream of income is solely for saving, another for investing, and another for spending. Or perhaps you’re thinking of multiple streams of income so that one stream goes straight to your student loans. Or simply to have enough emergency savings for six months to a year at the least. The different streams of income and what you’re using that income for varies by person. As for the former, we’re not simply talking working multiple jobs here. The goal is to create a stream (or multiple streams) of income that work while you’re not. This way, you’re not waiting on a raise or bonus that may never come or may be delayed at a time when you need more finances flowing your way. This way, business continues throughout the day, making you money even when you’re away.
So many people are not taught to have more than one stream of earned income and it is our duty to not only educate ourselves but our children so that they can create more opportunity for themselves than those that were provided for us. We’ve all heard the phrase that “time is money.” It can be truer than you ever realized when you invest the time now to set up for your future.
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The seven main income streams of the wealthy are known as Earned, Profit, Interest, Rental, Dividend, Capital, and Royalty.
1) Earned Income: would be your salary or hourly wage from your day job.
2) Profit Income: is the overall earned income of business owners and entrepreneurs. If you’re looking to start your own small business, I highly recommend the Business Shet Podcast.
3) Interest Income: is the interest you earn at the bank, which is not much but every little bit adds up if you are indeed adding money to your savings account as opposed to transferring your savings to your checking account all too often. Interest Income isn’t enough to rely on but interest income in addition to any cash rewards programs your bank may have are well worth looking into.
4) Rental Income: comes from renting out real estate. These days, Airbnb is a booming business if renting out a room in your home or your property long term isn’t for you.
5) Dividend Income: comes from the stock market and real estate investments. The easiest way to get started here would be looking into stock options at your place of work, if stock options are available to you. There are also great money saving apps like Acorn that are worth looking into.
6) Capital Income: is all about flipping. Buy today and sell it tomorrow at a higher price. If you’re thinking about real estate as an example, you thought right.
7) Royalty Income: comes into play when someone uses your intellectual property. If you’re in the creative field or have a patent, this may come into play for you, otherwise, this stream of income is unlikely to be a source for many.
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I recommend Millionaires Unveiled Podcast to get you started on the right track towards your financial freedom. Throughout the podcast, you’ll discover how everyday people from all walks of life utilized their skills and passions to serve them well financially using these multiple streams of income. Get inspired by them to take your finances to the next level because if they can do it, so can we.
By setting up 3-5 of the above streams of income, you are guaranteeing more financial stability than ever as opposed to having solely one stream of income, earned income, which is not as stable as society would have you think. Multiple streams of income will help you sleep more soundly each night, so I highly suggest taking a weekend to plan out how you want to move forward to financial freedom. It might take a couple of weekends to iron out the plan but it will be worth leaving the paycheck to paycheck life behind.
What additional stream of income have you found to be most beneficial for you? What additional stream of income are you hoping will be beneficial to you?
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