The Truth About Multiple Streams of Income
When black millennials come to me for business coaching, one of the main areas we focus on is mindset…
Which is really programming what we have learned about income and wealth over our lives.
And the myth about multiple streams of income…
In theory that sounds great!
Who wouldn’t want multiple businesses that each provides an income?
When the government shuts down, I have my real estate and investment income to fall back on.
While this would be great, most clients I work with haven’t mastered one income stream…
And mastering one income stream FIRST is the key before launching multiple.
Today’s video is about Multiple Streams of Income Explained.
I share strategies I use with my clients to help develop focus and learn a better strategy for building wealth and income.
Make sure you check out the full video for all the strategies.
Let me know what you think in the comments!
Here’s what we cover:
- Multiple Streams of Income Explained
- Philosophy Behind Multiple Streams
- The Problem with Creating Multiple Streams
- Laser Focus
- Mastering One Stream + Systemization
Want to learn more?
I Help Black Millennial Men Optimize their Focus and Accelerate Financial Independence
To learn more about the program, you can schedule an appointment here or email at email@example.com. If you email me, say “I’m interested in your program” to make sure we get back with you quickly!
Hey what’s up everybody, so today I want to talk about a concept that I’ve come across a lot and the clients that I work with, the people I talk with online and offline and a lot of conversations I have about money and striving your own business, and that is the idea of multiple streams of income. And in theory sounds perfectly fine to have multiple streams of income that means maybe having something in real estate, having something in stocks and bonds, having another business sounds like a fairly logical thing to do. Who doesn’t want to have multiple streams of income? Who doesn’t want to have money coming in in different areas of their life, whereas if one area was to go down you would still have any other multiple streams. And so I don’t flaunt that mindset of thinking, but the downfall comes into the implementation of the idea of multiple streams of income.
So what I would like to do, what I’m going to do for you guys is I’m going to jump on the computer and I’m going to walk through why you should or shouldn’t build multiple streams of income and if you’re really just getting started, what you should really look at when you’re looking to build wealth and make money or start your own business, so let’s go ahead and jump right into the presentation. All right, so let’s get right into and explain this whole concept with multiple streams of income, what’s good about it, what’s not so good about it and if you should actually be using it for your business or in your life. So when people talk about multiple income streams they are really talking about three areas, we’re talking about paper assets so these are like your stocks, you got bonds, anything that is actually paper that entitles you to value of a company or some partnership, that is what’s considered a paper asset.
You also have real estate, and so real estate obviously is anything to do with housing whether it’s commercial, single family homes, office buildings things like that, putting their money into housing, buildings and other real estate ventures. And then there’s owning your own business which can be in multiple different ways, you can be doing e-commerce on eBay, you could have a brick and mortar ice cream shop, you could be doing consulting like I do. So there are different ways to create these multiple streams of income and then there are also ways that you can divide each of these down, like real estate could be broken into foreclosure, single-family versus commercial businesses or retail, hard goods, intellectual property just to name a few and as I mentioned paper asset. So these are just the different areas that people are talking about when they’re discussing multiple streams of income, and the philosophy behind all of that is that if I have more income streams I am more risk adverse, if I have multiple things going on if one should happen to fall off the rails or if I get laid off or guess what I still have multiple income which to fall back on and then I should build these multiple residual income streams to keep myself safe.
But with this philosophy it sounds something like a really good plan, what could go wrong, who doesn’t want to have multiple areas in their life where they’re making money, and it’s like a river of money flowing or multiple rivers flowing so if one stream dries up well I don’t have to worry about it because I have another couple of streams which are continuing to pay me and that’s the whole philosophy around multiple streams of income. But there’s really a problem with trying to create multiple streams of income, and the reality really comes down to two things, the first thing is that we live in a competitive world which I’ll get into a little bit more and the second thing is we’re all limited by our time and we can’t do everything. So what do I mean by we live in a competitive world, well in today’s business world you have to be agile, things change as IBM say with the speed of business and a lot of times they have truths we learn about around creating multiple streams of income requires us to not be agile, we’re a one line of thinking.
And in business today if you’re going to be successful regardless if you have a consulting business or if you own a brick and mortar stop, when the market changes, when the customers’ demands changes you have to be agile. And the next thing is that business has to become really specialized, if you want to make top dollars as a doctor, lawyer or engineer you go to school and you research and you spend time learning that specific skill and growing that knowledge and that knowledge grows exponentially. When you have different businesses and when you’re diversifying your income streams, it becomes really hard and contradictory to specialize and that’s what’s really going to be required to be successful in any business. And then secondly your time is limited, you can’t go out and implement every single strategy that you come across, in business it’s really about focus and if you implement every strategy well you’re going to get nowhere because there are so many strategies out there.
You see someone pitching a new way to do funnels, a new way to do LinkedIn as a CEO every time you log on to Facebook, so it’s just really important to know that you can’t do everything. Particularly if you’re trying to have some type of balance in your life if you want to keep a healthy family relationship, stay spiritual, make sure you have those relationships in your life. Do you want to spend your limited time working on multiple businesses, working on multiple streams when you can focus on one as opposed to making sure you have that balance in your life and getting to have those important things and not just focusing on running all these different streams that you have. And what’s the result of all this, well the way to financial success is through focus and that attention to detail, that attention to a specific outcome and the happiness that results from your focus and the balance that you get, and that’s where the real wealth comes from in life.
It’s not really about how much money you make, it’s really about how you balance both the family time, those relationships versus the work that you have to actually do and when you try to go up to multiple income streams which is really contradictory when you’re trying to get both of these things in life for yourself. And really what you want to have is those laser focus and that’s laser focused on one income stream and then your time isn’t diffused across multiple different businesses, different income streams and it’s focused on a single point of high probability of success and as you start to branch out and do multiple income streams, your chances of success go down dramatically because your attention is on multiple things.
So think for example if I did have a laser and if I was pointing it in multiple directions, now that energy is diffused, it’s not going to go in the same direction and the energy that I use to curate this is all going in different directions and I’m not going to see the effect as if I was to take the same energy and put it towards one thing and make progress in one area and really see results and see that beam of light really shine in one area as opposed to a little dim light in multiple areas. And so that’s one of the big misconceptions about getting multiple streams of income is that you lose focus and you lose that focus because you’re looking on different things, alright looks like I have this slide twice so let’s just keep going.
So should you build multiple streams of income, so here are some questions to ask if you’re thinking about building multiple streams, can you actually manage the complexity of being an expert in multiple areas and I with your multiple streams you’re going to have to know different things about all these industries. So if you’re in housing and if you also have a brick-and-mortar store where there’s going to be two areas where you’re going to have to know the subject, it’s going to be really hard particularly if you don’t have any background in that area and you’re looking to just get started. Are you experienced at managing a staff, if you’re going to have multiple streams of income you’re going to have people who help you do all this good, there’s no way you’re going to be able to run two, three, four investment streams or different projects all by yourself. Well you also want to think about you have upfront investment capital for each of these streams, they’re usually some startup costs and all businesses and if you are starting three, four different streams then you’re going to have to have 3x, 4x the amount of startup funds in each of those different streams.
And then you’re going to have to know the legal issues in each area, so do you have a legal team that can help you learn or implement the legal strategies in each of the businesses, plus the different jurisdictions that your business is in, and do you have a history of success focusing on multiple strains or multiple projects, most people don’t, most people focus on one thing first before they branch out and start doing multiple, but if you have that success that’s something to consider as well. And it’s multiple stream something you really want to give your life to, do you want to really have to be worried about three, four different projects, different streams of income when you could really focus on one and get that work-life balance that most of us really want, where we get more time with our family and we actually work less, we create a system or a machine that allows us to work less as opposed to working more with multiple income streams.
So the wrong way is really to do everything at once, so some people love to do that I mean and there’s nothing wrong with having multiple income streams, sometimes people like to run different business because it’s a challenge, some people don’t want to just focus on one thing they want to focus on multiple which is totally fine. And if you’re inclined too, now this is just really to teach you to be aware of what you’re trying to build if you’re building multiple streams of income and it’s the wrong ways to get fired up, start investing in stocks, buy a house and try to open a business all within the same month or a couple weeks, that’s probably not a successful strategy and it could lead to the equivalent of financial ruin real quickly if you don’t know what you’re doing and you stumble and you fall flat on your face.
And it’s not really smart business to take on all that risk unnecessarily when you could use your knowledge and your systems that you’re going to create to focus in one area, instead of doing everything at once. And the right way is to really focus on mastering one income stream first, find something that you’re good at, you want to find something that you can do for a long time, you want to systemize the first stream before you move onto multiple, get a system with your first stream ready and then you want to use the leverage from your first dream to create additional streams. So mastering one stream is really about picking something that you’re deeply passionate about, picking something that you can do for a really long time and that you’re willing to put in the time, the effort and the commitment because it’s going to take that for you to get it done.
And your first income stream should definitely be something that you’re excited about, and it’s also going to be the toughest because it’s the first time that you’re going through this process, the first time you’re learning or applying these skills to generate a stream of income and so it’s hard. Anytime we do something for the first time it’s going to be hard, there’s going to be challenges that’s why it’s in my opinion that much more important to master one first before trying to move on and to develop more than one. And then you need to do something whether or not you make a buck or not, like I said it needs to be something that you’re going to love and that you can wake up in the morning doing without anyone even paying you and that’s going to be your secret to long lasting success in any business that you’re trying to do.
You also need to systemize and create systems so your time isn’t going or so your time isn’t continuing to go to your business, because ideally you want to work in your business more to then create a system so you work less and so once you’ve mastered that first income stream and you’ve taken all that time and attention and detail, you then want to then figure out okay how can I make this system work without me, how can i leverage my time using technology or using employees to get the stuff done that I need to for my business and thus creating that residual income, that cash flow or creating that stream of income. And then lastly, you then leverage your skills and your services to create new products or create multiple streams, in addition to creating streams just maybe even applying to multiple services in your business because it’s also a good idea in your business to start with one product or service before going to multiple, so that concept applies across the board.
But when you have these single additional streams and the services you use that as leverage, you use the time that you put in, the knowledge that you gained and the people you work with the network to then go and apply that to another stream and use that knowledge. And most of the time that knowledge would be applicable in other areas of your life, you may be a successful marketing director and have a lot of marketing skills, but you can easily pivot that and work with people and product development, because how to talk to the customer. So you can use those skills and then pivot and it makes it more likely that you’re going to succeed with multiple income streams, because you’ve proven that you can build one income stream and if you can do one then it’s more likely that you can do more.
So for example with me or with any coach usually start with a one-on-one coaching program that would be a service that you would offer, and before you think about even offering like an online course or maybe even a higher level program, you want to make sure that you’re doing the one-on-one or your first service if that makes sense by putting your time and your investment into that one stream and then that skill would allow you to level up once you determine to pivot and work on multiple streams. So why would anyone even want to have multiple streams of income, and that’s a really good question, for the most part I think it’s security and a lot of times especially in the black community being taught growing up hey you want to get multiple streams of income, you want to have houses, you want to have a job, you want to have investment income but a lot of times we really skipped a step in that whole explanation of okay yes it would be really nice to have multiple streams, but guess what you need to build one first.
And I think a lot of this comes around again when we’re looking at crises like the government being shut down or people losing their jobs, it’s always about oh you should have had multiple streams of income. Well it doesn’t quite work like that and people think having a job or having a place to go to work is security, when in actuality you really build your own security based on your state of mind and what you do with your time. So some people view a job as security, me myself I don’t view a job as security because I have always wanted to do things outside of a job and if a job goes away one day, I was always ready to do my own thing, so that was what I viewed as security and we don’t all have that same opinion so I think we need to work on that opinion of what security is and that will really help more people understand why multiple streams of income is maybe not the best place for them to start.
So just to wrap it up for you guys, we talked about the advantages and the disadvantages of multiple income streams, the advantages are yes if one stream was to dry up if one business was to go bad you would have other businesses to rely and fall back on, but the disadvantage is that it’s really hard to get started with multiple income streams to that for the most part people start with one and build from there once they have one income stream systemize down to a machine, they have people in place working and running that machine and system for them, then it’s possible to move on to multiple income streams. In my experience it’s much easier to start with one, at one point I was working on websites, mobile apps was probably trying to do a podcast with my wife and doing a lot of other things that weren’t all and if you remember that picture I was drawing earlier and I was really going all these different directions, trying to really figure out okay what is best for me, where should I put my energy when in actuality I needed to just put all my energy into one area so that all that focus, all that time, all that energy was going to hit my target in that one area and then once I hit that target, I can move on.
And in my experience and how I coach my clients is I tell them to focus on one thing, one of my clients her name is Amber, she is a coach and she coaches agile training for IT professionals and she was doing that but she’s also doing a mastermind, she was also doing some one-on-one coaching on the side and was actually thinking about getting a job as well and she was going through the multiple streams of income or believing in that myth that she had to do all these different things to make sure she was secure.
But once I worked with her and we determined that her best avenue was her agile training, we got her to eliminate those other areas and really focus on that one agile training niche and once she was able to do that, she was able to actually see a substantial increase in her business. Like within eight weeks, she was able to have 40k+ in revenue in her business like that’s pretty good for working with someone for only eight weeks, and all that happened because she got over the mindset of I needed multiple streams and was able to focus and then later on if she wants to leverage her time and after she’s created a system, she’ll be able to move on to those other streams with ease, but she realized and now she knows she had to focus on one stream first. So that’s all I have for you guys today, so have any comments feel free to drop them below, feel free to reach out if you have any questions and as always keep going, thanks everybody.