To sit comfortably in the middle class, you must create additional income streams. Holding one or two jobs in the household is risky.
Rich people understand the power of having multiple streams of income. It is how they continue to accumulate wealth, even during a recession.
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But where should you start when building additional income streams? Most of us do not have any information on ways to generate more cash flow, but I’ll give you the golden knowledge today.
Why multiple streams of income? Creating additional revenue streams helps us build the life of our dreams in various ways.
- It protects us from having no income if our job releases us.
- It allows us to increase our savings rate.
- It helps us build an emergency fund.
- We can eventually make our side hustle our full-time job.
Think of your income streams as tiny tree saplings. Over time, they grow into massive trees that can provide shade and fruit.
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However, all income streams start as a baby tree. The sooner we plant the tree, the faster it can produce fruit. It is imperative you start building your income stream as quickly as possible.
It takes 10,000 hours to master something, so that’s when you can monetize the heck out of your talent. But where should you start?
Active vs. passive income. The fastest way to make an additional income is through active income—otherwise known as exchanging time for money.
If you are in severe credit card debt, exchanging time for money can give you fast cash to cover your expenses.
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Some types of active income are working overtime, working a second job, driving Uber, delivering food, consulting, freelancing, etc.
There is nothing wrong with active income, but there are only so many hours in the day. You’ll have to contend with time, relationships, and physical well-being if you seek active income.
On the other hand, you have “passive income.” Creating passive income takes a massive amount of time upfront, but you’ll create assets.
Once you have an asset, it will continue to make money for you—even as you sleep. You want to focus on creating as many assets as you can.
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Assets grow with you. The assets you create grow alongside your life. Think of them as children. When they are small, they don’t produce much income.
As they grow, their income compounds exponentially. This allows your wealth to continue to accumulate even as you move on to different things.
Ideally, each middle-class household would have 4-5 additional streams of income. Each stream of income reinforces the other.
The best way to protect your family from mental fatigue and financial ruin is to create enough income to solve most of your problems.
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A path to wealth. Here is a quick example of how I would use multiple reinforcing income streams to create a lifetime of wealth.
First, I would ensure I had a firm budget in place and no debt. Getting to this point is challenging but is easy once you fully commit to the process.
Next, I would rent one room in my home. This is the purest income you can make; you can rent to friends and family as long as you set boundaries.
You can use the income from your rental room to fund your Tier 1 ($1,000) and Tier 2 ($10,000) emergency fund.
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After building those, you can begin to develop your income investing portfolio. This paycheck will eventually replace the income from your room rental.
It took my wife and me three years to reach $1,100/month in dividends. However, we maintain a room rental to keep our savings rate high.
Eventually, you’ll be able to leverage your home equity, dividends, and cash flow to buy a rental property. Conversely, you can add an RV hookup, tiny home, mobile home, or self-storage container to your lot.
You keep adding new passive income to your portfolio over time while the others streams keep growing independently. You will become quite wealthy throughout the process.
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You can also add in passive income from creativity. It will take much longer to earn a living wage, but it has a greater chance of reaching a bigger audience. Some ways to earn royalties are blogging, podcasting, and YouTube.
What will hinder your progress? Why do most middle-class households only have one income stream (their job)? They talk themselves out of each way of passive income.
- No room rentals. They don’t like having other people in their homes, even family.
- No YouTube. They are not good at public speaking.
- No Blogging. They are not good at writing.
- No Dividends. They are not good at math.
- No Rental properties. They are not good at being landlords.
As you can see, limiting beliefs prevent most people from becoming wealthy and living extraordinary lives. Don’t let this become you.
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After reading this article, you have enough information to take the next step. If you are interested in any of the above, click the link to read the attached article.
That’s all it takes to build passive income: information and action. You don’t have to depend on anyone else as you do with a job.
Conclusion. You can start a dividend portfolio tomorrow without filling out a resume or having a job interview.
You can start writing books and blogging without a college degree. You can rent a room without a certification from a vocational school.
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So what’s stopping you? Creating additional income streams is a mindset, not something to disregard. You need the information now to create the best situation for your children.
If you start a dividend portfolio today, it will mature when your child turns 18. If you have additional streams of income by then, you can gift your portfolio to your child or create a trust.
Can you imagine turning 18 and receiving $1,000/month in dividends? How would that have changed your life? You have the ability to create something special for your children, so take it.
I have additional streams of income, and it is life-changing. Today, I received $90 in dividends on my dividend debit card (from ARCC). My wife received $60 from ARCC as well. That’s the definition of a great life. Good Luck!
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing
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