3) Tips Of The Month - How To Create Multiple Sources Of Income
Several years back, I was introduced to the idea of multiple sources of income (M.S.I.). It is a powerful concept.
It's the way the rich create their wealth.
It is what the rich has always known about wealth creation but the poor don't.
In this article, I'm going to share some of my understanding and experience in creating multiple sources of income......
Most of us started with a primary source of income (P.S.I.), that is your JOB. The problem with a JOB is that you are often exchanging time for a salary. You work 8 to 5 to help your boss to create one of his M.S.I. in exchange for a monthly pay. The moment you stop working, your P.S.I. stops.
The concept of M.S.I. is to create multiple sources of extra income until a day when your M.S.I. exceeds your P.S.I.. This is when you quit your job and work for something that you are truly interested in. Of course, you can continue to work on your P.S.I. if you like the work. But that would be a choice rather than a need.
Please note that not all extra income streams qualifies for M.S.I.. For example, working night shift at 7-11 is not an M.S.I..
Below are the criteria that a multiple source of income must satisfy:
1) It must be a form of passive income
Passive income is an income that you can earn on a regular basis with little effort required to maintain it.
Some traditional examples of passive income are:
- Rental income from property;
- Dividend from stocks;
- Royalties from publishing a book or from a patent;
- Profit sharing from businesses that you own, provided you are not the one running the business;
- Recurring commissions from your sales (including insurance products and MLM products).
Some examples of online passive income are:
- Sales from your own ebooks and other digital products;
- Recurring commissions from your online sales (including affiliate sales with recurring earning potential and online network marketing);
- Adsense income;
- Profits from the online businesses that you own, provided you are not the one running the business.
Your M.S.I. must be a form of passive income so that you can spend more time building more M.S.I.
Imagine each M.S.I. you build require your full time attention all the time. How many M.S.I. can you build?
2) The 'working hours' must be flexible
"Working hours? Kenneth, I thought we are not talking about JOB here?"
Yes, M.S.I. is not a job. But M.S.I. still requires you to work!
You need to put in a lot of initial efforts to build an M.S.I. in order to get it up and running. The maintenance effort should be little once it is established.
Personally, I believe that internet marketing is the best form of M.S.I. because you can work anytime you want. You can be spending 3 hours every night, figuring out how to make money online or how to build a website. That's fine. It's part of the process. At least you are growing your knowledge in this industry at your own pace without affecting your P.S.I..
3) It must be fast!
If your M.S.I. takes 6 months of planning, 3 months to draft a business proposal, 5 months to seek funding and 12 months to produce the first prototype and 3 years to see your projected breakeven, you are not likely to succeed.
For your first few M.S.I., think small. I know all the gurus ask you to think BIG, but many people think too BIG and never get started. Think small and get your first few M.S.I. established. Once you have the experience, you can move on to something bigger.
But when I say fast, I'm not saying overnight! 'Fast' means you can see money coming in after 3-6 months of 'hard work' (not after 3-6 months of joining a program and do nothing).
Avoid the temptation to "get rich quick". Trust me. Whenever I do something with the intent of getting rich quick, I lose money. But whenever I do something with the intent of building a passive income, I make money. The idea of "Get Rich Quick" seems to be cursed!
How I Build My M.S.I........
I have two favorite M.S.I. They are 1) any form of online passive income and 2) property rentals.
Property is a no brainer. Just find a property where the rental can cover the monthly installment. The only problem is the down-payment, which takes time to accumulate.
Online M.S.I. is more exciting and the ROI (return on investment) is huge, but you need to spend some time to establish it.
I try to establish two online M.S.I. a year, excluding all the mini websites that I'm building.
Two M.S.I. a year..... that means I spend 6 months of my full attention on each M.S.I.. I hope this fact tells you something.
If you ever got into something and quitted after 1 month, please don't say you have done your best.
Internet marketing is booming. If you are willing to learn and work hard, there is never a shortage of money making opportunities. Focus on building passive income rather than immediate cash. This is the surefire way to build your multiple sources of income.
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