Why You Should Create Multiple Sources of Income

A majority of people in the world are worried about keeping their only job and are living under constant worries about their finances, yet only a few do something about it.

If the high rate of unemployment and mounting job losses have taught us anything, it is that nobody's job is safe. Creating multiple sources of income seems nothing but a fantasy to many people, this is nothing other than fear of unknown and limited belief. Those households where both partners are working may have more safety net but they are both relying on their job for their livelihood. There is a long list of pros and cons of both partners working.

There is a tremendous financial risk involved relying on a single source of income, even if you are earning a six figure salary, this can go away with a few hr notice or due to unfortunate events in life. You are putting your family at risk by not creating a safety net.

There is no denying that cost of living is on the rise like never before, health care cost, college tuition cost, rising unemployment etc. Money, whether due to low salary, poor economic opportunities, poor financial intelligence or living above your means, is the number one cause of stress and mental health issues in the world. America is the richest country in the world and more than 70% of Americans live from paycheck to paycheck, 75% of their stress is due to poor financial habits.

What can be done: Learn good money habits, invest regularly, use your earned income to create other sources of income, use passive income to buy luxuries. Historically, there are two most common sources of passive income: rental properties and stocks. Both require discipline, education and most importantly patience.

This pandemic has given us the opportunity to re-evaluate our financial life and take actions to mitigate the chances of repeating history when life throws another curve ball at us in the future. If you come out of this era of pandemic without learning any lesson, especially the way we think about our financial well being, you will be in the worst shape if something like this happens again.

Active Income: In 2020, the possibilities of creating multiple sources of income are numerous, most Americans work 8 hrs a day, what can you do for the rest of the day, starting from getting a second job, driving Uber, Amazon delivery, grocery delivery, food delivery, writing a blog, youtube channel, start your own side gig.

Passive Income: This is the type of income that actually creates wealth and makes you financially independent, it's a slow process which requires the utmost discipline and patience. Passive income gives you freedom to enjoy life, freedom to do things you like to do, like spending time with your family, visiting places you like to go, your hobbies and so much more. It gives you time to think that life is not just about serving your employer or chasing money, its about finding real purpose each soul has been placed in this world for.

“Salary makes you living but profit makes you fortune”~ Jim Rohn

You find ways to generate consistent monthly income for which you don’t actually have to always work, sometimes it requires upfront hard work to establish these sources, weather its buying the right kind of properties, start a business, learn how to find good dividend stocks or just passively invest in commercial real estate or any successful franchises with well known and reputable groups or your friends and relatives. I personally have some experience in all of the above and it's not rocket science but like I said before, it requires patience and discipline.

High net-worth individuals like my doctor colleagues, lawyers, and even financial advisors don’t use their salary to create multiple streams of income due to fear or poor understanding of investment, the only way they know to make money is to work extra hours or days, this create stress and lead to high burnout rate in doctors or other highly successful professions.

Having rental properties with positive cash flow is the best way to achieve financial freedom. Tenants not only pay off your mortgage, taxes and insurances but they also give you monthly income which in most instances can be tax free. I like multifamily apartment investment for various reasons which i have written about in my earlier blogs.

Reasons Most people don’t take action: There are two factors that play a vital role in our inaction, Limited belief and fear of Unknown.

Limited Belief: Most people have this belief that it takes money to make money or money only goes to rich people. It can not be further from the truth, yes a lot depends on which part of the world you live in, some countries offer very limited opportunities but the majority of the world has no scarcity of money. Number one reason for financial trouble is unwillingness to look for the opportunities around you and when the opportunity is in front of us we don’t take timely action due to either fear, limited belief and lack of vision.

“It doesn’t take money to make money, it takes courage to make money” ~ Grant Cardone

Financial success is not possible if you are not willing to come out of your comfort zone, challenge yourself and work hard on yourself, make yourself valuable, learn new skills and always work more than you get paid for. In this digital age, the world is doing business online. The best thing is, it doesn’t require big capital to start any online store. I know several teenagers and less educated people buying a unique item from Ali Express and selling it online, find your niche.

Fear of Unknown: Another reason most people don’t take any action is the fear of failure or fear of loss. A lot of people who have decent income don't want to take “Unnecessary risk with their money”, they either spend it or save it. Both of these habits do not make you financially strong. Some people make very risky investments, either in businesses or the stock market and end up losing lots of their hard earned money. Smart investment is when you start investing on yourself first, learn the basics of investments so con artists don’t outsmart you very easily. Know where your money is at and how much return you should realistically expect. After having one bad experience, don’t give up on investments, rather work on the reasons for your failure or loss.

Fear is universal, everyone is fearful but only those who learn how to overcome their fears, see the incredible world of wealth and prosperity. The best cure of fear is action.

Start online or onsite businesses, find trustworthy and hardworking partners through networking or look into your family and friends circle, hang out with people who are very successful and become their business partner after vetting their business.

Develop a skill, work on your passion, start a side gig, like photography, lawn mowing services, handyman etc etc , whatever you think you can happily do to serve other people. The two biggest skills that make you the most wealth are 1) Solving problems and 2) learn how to sell. If you have any of these qualities, there is no reason you cannot earn wealth easier than most people, the only reason for not doing anything is procrastination and not willing to take action.

Wherever you are in the world, you can not change anything, unless you change yourself. If your only purpose in life is to barely survive, then no action is needed or expected from you but if you want to use the tremendous gift that God has given you in the form of healthy mind, your opportunities are unlimited but opportunities come to those who are looking for it and prepared to seize it when it makes an appearance in front of you.

“If opportunity doesn’t knock, build a door ”~ Milton Berle

Not only we need to learn how to invest wisely but we also need to learn how to spend money on things we need versus things we just want. Poor money habits and living above your means are the number one reason why so many families live under constant financial burden, despite making very high income.

“We buy things we don't need with money we don't have to impress people we don't like.”~ Will Smith.