People who are successful with their money, people who increase their incomes faster than others, look at income in a whole different way than those who are less successful. They have a different concept of income. They see income as dynamic and seek out multiple income sources.
Think About Multiple Streams of Income
Most people live paycheck to paycheck. They have debts up to their eyeballs. One of their most unhappy expressions is, “I can’t afford it.” And particularly relevant to this series of articles, their income only increases roughly proportionate to inflation, sometimes a little better, often a little worse.
If you want to be different than everyone else when it comes to money, if you want an income that increases more rapidly than others, you have to think differently than everyone else. If you don’t want to think differently than everyone else, you will have to live with the same financial results they get.
Real financial winners adopt a dynamic concept of income. They do not see their income as coming only from their job. Or from any single source. They learn to generate income from multiple sources and often earn more from sources other than what outsiders see as their careers.
Robert Allen wrote a classic book about this concept which he called Mutiple Streams of Income. This is not a bad place to begin although he focuses on more traditional forms of investing, real estate, information marketing and the like. Today's world offers an even greater array of possibilities.
Single Source Income is Always Limited
It is surprising that more people are not aware of the limitations of single source incomes, especially when it comes in the form of a salary. Even a brief consideration of the plight of others who follow that path shows many examples of financial limitation.
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It is surprising that more people are not aware of the limitations of single source incomes.
Many jobs are very tenuous; they may unexpectedly disappear. Some are very public, others are less so.
Look at the athletes whose careers end abruptly and they have no money because they spent all they earned and developed no other income. The same with some politicians or entertainers.
Less public but common in recent days, many people have lost jobs due to changing economic conditions. And because all their income is from one source they are at a loss to provide for themselves and their families. Many may come back. Some never will.
But these are not the only limitations. Many career paths lead to jobs with limited income potential. They may pay well enough compared to other occupations, but whether a carpenter, a pharmacist, or a nurse, while there is some income growth possible there is also a fairly structured cap.
Examples of a Dynamic Income
Over the years I have watched successful people produce significant incomes as a result of adopting a dynamic view of income production. Look around and I am sure you can find some among your acquaintances although the truth is most of them are quietly developing multiple income sources without a lot of fanfare.
An example: One man I knew operated a small business in which he earned enough money to be one of the leading citizens in his small town. But unknown to most people he knew, he slowly bought up low income houses.
By carefully choosing tenants and offering them free supplies for any improvements they wanted to make on the homes he vastly improved the worth of his investments. The last time I spoke with him he had over 70 of them, producing a substantial income and wealth.
Another example: An associate of mine ran his own business quite successfully, but he aggressively leveraged his success to work as a consultant to other professionals. In the course of that activity he sold personal development and sales training programs. He earned a great deal of money in this way.
Yet another: A doctor friend of mine also invested in real estate. He didn’t have time for residential management but he ended up owning numerous commercial properties including one shopping mall. Another example of dynamic income production.
Major amounts of money were made in each of these cases in addition to a regular primary income. Not everyone will achieve so much, perhaps, but everyone can learn to find a variety of ways to produce income, what many call multiple streams of income.
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Opportunities are unlimited. Your concept of income can take many forms, but the common denominator is multiple income sources.
Some will want to add on what amounts to a side business. Others will get ahead by growing their own vegetables in a garden. Many will start investing in mutual funds.
Opportunities are unlimited. Your concept of income can take many forms, but the common denominator is multiple income sources.
The Concept of Multiple Source Income
The idea of a multiple sourced income is a dynamic and powerful concept, but also a flexible one. It does not mean everyone should have more than one career. Some careers offer unlimited income potential. And often people just want to focus all their attention on one job. Fine, but then invest a substantial amount of income in mutual funds or other income producing opportunities that are not demanding time wise.
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The idea of a multiple sourced income is a dynamic and powerful concept, but also a flexible one.
Some people prefer to work for nonprofit and other organizations, or even businesses, that produce lower incomes. Fine, but then set aside part of your time for earning additional income elsewhere.
And keep in mind that as long as you are putting a sufficient amount of money into your Roth IRA or other retirement vehicle, and choose to live within the income you have available, you do not have to earn large amounts of money to become financially successful.
Sometimes it is possible to earn a little money from a larger number of sources. Many people hold two or three yard sales a year. A man down the road from where we live sells lawn tractors from his front yard (one or two at a time so he doesn’t appear to be “in business.”
Conclusion: Dynamic Income in Practice
There is no one right way to apply the concept of a dynamic income. The critical thing is to separate income from having a job in your mind and see that you can earn money in many ways—they all count.
If you want to make most of your money from your job. OK. But keep your mind open and you may find that it is quite amazing how much money you can generate through other income sources as well.
