Craig Killick
Small Business and Marketing
The importance of creating multiple income streams
Posted on 14. Jan, 2009 by Craig Killick in Business
At the moment, certain industries are struggling… really struggling. There’s no reason why, as we move forward, that more industries will face the same issues. Isn’t it time to create multiple streams of income (as organizations or as individuals) to counteract the ebb and flow of business in the current climate and beyond?
One of the books that influenced the way I see income is Rich Dad, Poor Dad and although I don’t buy into the band wagon sales machine that the Rich Dad, Poor Dad empire has become, it was a seminal book for me in understanding how to spread risk, create income streams from assets and leverage during the good times.
I would suggest that I haven’t quite mastered the whole ideology yet, because I still work in a job and I don’t have a large enough portfolio of assets to support my income. But, that day will come soon although I may keep the day job all the same.
Many people are already doing this on a micro scale. In fact, many people I follow on Twitter make extra income from alternative methods on top of their day job. Think Ebayers, Bloggers and affiliates.
If, like Rich Dad Poor Dad suggests, you can leverage up to the point of owning assets that deliver passive income, this is even better – you won’t even need a job. I am sure there are thousands of property developers ready and waiting (if they can borrow the money) ready to dive back in the property market when the time is right, the same money they took out of the market a couple of years ago if they were smart enough.
The flipside is of course the westernised way of wanting better and more when we do get our hands on money. We tend to spend too much, more than we need. Another book that got me thinking at the time (and I hope I get this reference right from memory) is The Richest Man In Babylon, which talks about saving 10% of your income no matter what for investment.
I once, and it was more by accident than design, managed to earn the equivalent of a years salary on an investment of £0 on an investment of two years, although this was at at time when banks were lending money. It opened my eyes wide. They are still opened wide, looking for a the next deal that will deliver the same.
It’s wise to have multiple income streams, not just in bad times. However if you divide your time too much between all the projects, chances are none of them ill be successful. What I do is to run several related projects that each have a different amount of risk and are targeted for a slightly different market.
Even in these times of recession, I maintain what I’m doing, because I think it not a good time to switch to something completely different. I do what I do best.
Hi Paul.
I agree and it’s a caveat I should have put in… don’t dilute them down too much. Good point.
£0 really – zero. It becomes impossible to calculate the rate of return unless you’re stephen hawkings
Paul’s comment is valid but the old ‘stick to the knitting’ adage would have seen William Gates III stay at school…
I agree there’s a danger of spreading yourself too thin and not managing to do anything properly.
But often, when you start one project it can lead to another that complements it and leverages your efforts to get an even bigger reward.
Meanwhile, a lot of people struggle to find an idea that will give them even one source of income, but the opportunities are out there.
Roy