The Wisdom of Multiple Streams of income.
How many streams of income did it take in the 1950’s for a family to survive? One. Today, very few families can survive on less than two streams of income. And that won’t be enough in the future. It’s a volatile future. You’d be wise to have multiple streams of income flowing into your life.
Prosperous people have always known this. If one stream dries up, they have many more to support them. Ordinary people are much more vulnerable. If they lose one of their streams, it wipes them out. And it takes them years to recover.
In the future, people will need a portfolio of income streams — not one or two — but many streams from completely different and diversified sources. So that if one streams goes, you barely feel the bump. You’re stable. You have time to adjust. You’re safe.
Do you have multiple streams of income flowing into your life at this time? Maybe it’s time to add another one.
The Power of Residual Streams of Income
So let’s assume that you’ve decided to add another stream of income to your life. You could always get another part time job, but that’s not the kind of income I’m talking about. You certainly don’t want to get stuck on somebody else’s treadmill. You want the kind of streams that you can own.
I’m talking about residual income. That’s a fancy term for a “recurring” stream of income that continues to flow whether you’re there or not. I’ve heard too many small business owners say, “I haven’t taken a vacation in 5 years.” There’s something wrong with that picture. I don’t have anything against hard work. But after a few short years of hard work, you should be free to have your streams of income forwarded to your mailbox in Tahiti. Get the picture?
Two Types of Streams: Linear and Residual
Not all streams of income are created equal. Some streams are linear, and some are residual. Here’s the question that tells you whether your income streams are linear or residual:
“How many times to you get paid for every hour you work?”
If you answered, “only once,” then your income is linear. Income streams from a salary are linear. You only get paid once for your effort. And when you don’t show up for work, neither does your paycheck.
With residual income you work hard once, and it unleashes a steady flow of income for months or even years. You get paid over and over again for the same effort. Wouldn’t it be nice to be compensated hundreds of times for every hour you work?
For example, as I mentioned earlier, I published a book in 1980 called Nothing Down: How to Buy Real Estate with Little or No Money Down . I put in over 1,000 hours of hard work writing Nothing Down before I earned a single penny. Teenagers working at McDonald’s earned more than me. But, I wasn’t looking for a salary. I wanted a royalty. So I was willing to sacrifice. It took over two years before the money started to flow. But it was worth the wait. I’ve now earned millions of dollars in royalties. And every six months I still get nice royalty checks. That’s the power of residual income…it keeps flowing and flowing and flowing.
Here’s another example. Have you seen that tiny battery tester on the Duracell battery? I’m told that the inventor presented his idea to the big battery companies. Most turned him down, but Duracell saw the genius of it and agreed to pay just a few pennies per battery pack for his idea. And now he makes millions, because those residual pennies add up. In essence, he invested many hours of his time to create the concept, to package it and then to sell it. And now it generates a raging river of residual riches to him and his family. And the best part about it – HE DOESN’T HAVE TO BE THERE! It flows without him.
Linear vs. Residual. Do you see the difference?
The secret of the wealthy is not that they have more money but that they have more TIME freedom. Because many of their streams are residual, they have time to spend on anything they want.
When you view people’s lives through the filter of residual income, many groups of people aren’t as wealthy as they appear. Doctors and dentists don’t earn residual income from their labors. Their income potential is capped. They can only see a fixed number of patients in a day. And they have to be there for every single one of them. That’s linear.
The same holds true for top sales people, chiropractors and attorneys. Most of them don’t enjoy the power of residual income either. They may appear to be rich but they’re on a treadmill just like the rest of us.
What percentage of your income is residual? If you’re smart you’ll start shifting your income streams from linear to residual. This will give you the time freedom to do what you want when you want. And that starts with turning on at least one new residual stream this year.
There are many, exciting new ways of creating residual income
Do you know who Warren Buffet is? He’s the smartest stock picker in history and the wealthiest investor in the world with a net worth in the tens of billions. What if Warren Buffet himself were to call you on the phone and give you a hot stock tip. He tells you to sink every penny into a certain stock. He says that he’s invested a couple of hundred million of his own money and he feels the stock is a sure bet to double or triple in value. What would you say to him? “Sorry Warren but I like to pick my own stocks by throwing darts at the Wall Street Journal!” Would you listen to the master or continue to do things your own way?
Well, I’m no Warren Buffet, but through my books and seminars I’ve probably helped to create more millionaires than he has. If I were to guess, it’s probably in the thousands of millionaires. And this book contains all of my “hot streams” for the new millennium.
It’s where I’ve sunk a huge amount of my own time and effort. What I am about to share with you are the best opportunities I’ve seen in 20 years. They are certain to create many residual millionaires in the next 10 years. You could be one of them.
(Continued In Money Tree Part 3…)
Authors Details: Robert G. Allen – Prosperity, 7 Secrets.
His colossal bestseller Nothing Down established Robert Allen as one of the most influential investment advisors of all time. Also the author of ‘The One Minute Millionaire’