Introduction
In today’s ever changing business climate, developing multiple strong sources of cash flow has become a necessity. In other words, having several sources of income is imperative to surviving and thriving. It is the difference between sitting in an office working for the man or sitting on the beach sipping Mai Tai’s.
Grant Cardone, famed author, motivational speaker, real estate investor, sales trainer, and multi-millionaire is a huge advocate of developing multiple income streams. He preaches that individuals should focus on making more money as opposed to saving it. Granted, both elements are crucial when it comes to developing net worth, developing income streams is more important in Grant’s eyes. I would have to agree with him. In fact, one of his steps within his “Millionare Booklet” is “Multiple Flows of Income”. He reinforces the fact that the holy grail of financial wealth is to develop multiple cash flows.
What I found especially appealing is his rule of never walking away from your current source of income instead of finding a way to add one. Although this is simple, it is brilliant at the same time. Never in history has it been easier to develop multiple steams of income than today due to advances in communication and technology. In addition, the capital costs are very low. So instead of finding a higher paying job, perhaps you should just find other ways to make money. This is very important because if you were to lose your new high paying job, you are back to square one.
Establishing the Sources
The reason why individuals do not have multiple streams of income in my eyes is that it goes against conventional wisdom and that it is difficult. The reason I say it goes against conventional wisdom is that many people are just taught to go to school and get a well paying job. That’s it. Although, the point of developing and firmly establishing multiple income sources is stressed throughout several important personal finance books, many people do not do it. Another reason is its difficulty. Once an individual is motivated to establish the streams, they understand why it is the holy grail of personal finance. It is just flat out difficult. You can pick up a side hustle and get paid for your labor, however this may not yield the results needed to sustain a strong income stream and you may run out of labor hours available to commit.
Another route is to focus on “value creation”. How can you as a person create value for others? I think this is a key point and something that I have read into a lot recently. It may be more important to establish a plan of action to create value for others and as a result receive compensation. Doing this rather than just finding a decent paying side hustle is probably the best bet because your time is limited regarding labor hours and you only have so much time.
However, just realize that making money on the side, no matter how small is a tremendous start. In addition, no job is too little or too meager to bring home additional income. Why? Because it is supplement income to your current income. Once you get started on your side hustle, not only will you be bringing home additional money, you will learn things you wouldn’t have that will hopefully increase your supplement income potential even more.
Digging Deeper
This is especially apparent as individuals’ age in life and accumulate additional expenses and financial responsibilities. Unless you are completely oblivious, it is very apparent that expenses accumulate drastically as we age. In addition, our time becomes limited. We start to add obligations to everyday life and your free time becomes scarce. Therefore, it is important to start to develop income streams in your younger years.
The holy grail of financial freedom is possessing multiple strong sources of cash flow. You never want to depend on one or two sources of income. Especially for jobs that are competitive, results driven, and cyclical with the market (jobs become scarce when the market falls and vice versa).
Publicly traded companies will cut you off. If you think that your company values you, think again. Really think about it. The sole purpose of a corporation is to return profits for shareholders. That is the bottom line. Therefore, the corporation will do anything, including job cuts, to maintain profits. Just be mindful that shareholders are what matter, not what you’ve done for the corporation to date.
Final Thoughts
Again, it is traditional thinking to have one source of income. If you only have one source, don’t panic. Make sure you have a 6 month emergency fund to cover unexpected expenses that may include job loss. However, just start thinking about how important it is to establish strong cash flows from multiple sources. Start thinking about it and start talking to other’s about it especially significant others. You will be glad you did.
A personal finance software tool is absolutely critical for anyone who is serious about building wealth and tracking multiple income streams. Personal Capital is the best software tool that I have come across. It basically combines all of your personal financial accounts and holdings and tracks their performance over time. It is a one-stop-shop for your personal finances. Click here to acquire Personal Capital for free! Please also see my main page for an overview.
Bottom line…don’t depend on one source of income. Develop multiple. This will increase net worth and decrease stress.
Redefine
-James