The need for multiple streams of income

Every single day the value of the money in your pocket or bank account continues to depreciate. The worth of any unit of currency definitely cannot purchase what it could five or ten years ago. With rising costs of living and inflation the need definitely arises for everyone to seek for several sources of income streams to flow into your life on a regular basis.

Can you begin to compute the percentage increases by which basic necessities have grown in the last five years? Consider prices of food stuffs, transportation and housing for example. All these costs have more than doubled compared to five years ago. The key point is that your salary or income has not multiplied at the same rate as your costs. The only way one can be able to survive this rat race process is by developing additional income streams.

The concept of multiple streams of income simply entails developing additional income inflows to complement whatever income you are currently receiving. It advocates actively seeking for ways and means by which you can earn additional income to supplement what you currently earn from your major income stream. This term was popularized by Robert Allen who wrote the bestselling book, “Multiple Streams of Income.” He advocates having as much as ten income streams in your life.

Don’t be fooled into a false sense of security believing that your job will adequately cover all your expenses now and in the future. In fact someone coined an acronym that the word job stands for “Just over broke.” No job, no matter how well paying can meet all your financial needs now and in the future. You would do well to look for what else you can use your spare time to do in order to generate income.

The global economies of the world today seem to be undergoing a lot of uncertainty and instability what with rising unemployment, inflation, plummeting currency values and the failure of many economic policies to improve standards of living. In 2008 there was a global economic crisis which led to huge job losses in many developed countries. Many economies were seriously affected. With multiple streams of income one would be better prepared to handle harsh economic realities due to having several inflows. If one income stream dries up then one can still survive on the others.

Good economic reasoning postulates that most times expenses always rise to meet income. If you do not explore other income opportunities expenses can easily overtake income which leads to bankruptcy and poverty. This could lead to further unpleasant outcomes. You must thus strengthen and grow your earnings capacity and capability to avoid such from occurring.

With multiple streams of income at play in your financial life you can more conveniently attain your financial goals. Let’s say for example sending your kids to a foreign university and building a house are some of your financial goals. You can easily allocate the resources needed for each goal to a different stream, thereby reducing the pressure on taking from one source for all needs and wants.

You need to begin to identify opportunities around you that you could plug into to generate multiple streams of income. This usually starts with an audit of yourself to discover what your passions are and if they can be exchanged for money. The audit includes looking at the available time you have that can be used to pursue another income opportunity. Are you extremely knowledgeable about this area you want to go into, and if not, where can you get additional insights into it? You must endeavor to thoroughly understand the pros and cons and undertake due diligence before you take the plunge.

Combining your existing employment with an additional business venture is highly advisable in this economy, but please ensure that your job doesn’t suffer in the slightest; your employer is paying you to give your best efforts so don’t use company time for private business interests. You could even start with opportunities such as investing in stocks, mutual funds or treasury bills; opportunities that do not take much of your time.

Consider also investing in property for rental purposes as another vehicle that does not require too much effort to manage as your additional income stream. Writing a book and releasing an album are also excellent income streams as you continue to earn royalties long after making the initial effort if it is of top quality. You could also set up a retail store, publish a blog or create online businesses that operate even when you are asleep.

Don’t let this year pass by without you developing at least one additional income stream. Once all the requirements have been put in place you can proceed to adding another income stream and as many as you can manage. It is pure wisdom not to put all your financial eggs in one income basket.

Kenneth Doghudje