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‘If you stop working today, how long will you survive – using your savings?’
Most people are just one pay-check away from being broke!
The reason being that most people rely on one source of income i.e. salary.
This sounds ‘ok’ for most people – until the day they lose their jobs i.e. all the income is gone all of a sudden.
And we’ve seen this scenario during this pandemic since most people were laid off – leaving them with no source of income.
Due this situation, people started to realise the importance of having multiple streams of income – so that they can have something to hold-on when they lose their primary source of income.
Thus, most people are now looking for ways to build multiple streams of income – so as to improve their financial well-being.
And we all know that most millionaires have an average of 7 income streams – and it's not by accident!
The main reason why most people struggle financially is due to lack of Financial Literacy (Financial IQ).
Financial education is not taught at school – thus, you need to educate yourself if you want to be good with finances.
Even the highly educated people in the society struggles when it comes to handling finances – because academic education is not the same as financial education.
Our minds are programmed in a certain way by our societies i.e. go to school, get good grades, find a good job, pay bills – rinse and repeat the process until retirement age.
But there's no clear explanation when it comes to Financial IQ.
In this quick post, l will try to summarise some of the ways one can use to build multiple streams of income.
Disclaimer: I’m not a financial adviser. All opinions shared in this blog post are based on my personal thoughts and experiences. For this reason, you might need to consult a qualified financial adviser for professional advice.
Disclaimer: I’m not a financial adviser. All opinions shared in this blog post are based on my personal thoughts and experiences. For this reason, you might need to consult a qualified financial adviser for professional advice.
Saving A Certain % Of Your Income
Saving A Certain % Of Your Income
Most people consumes all of their salaries – since they believe that they will get another salary at the end of the month.
Some people even live beyond their means – since they borrow money towards month end in order to cover some few extra expenses (to complete the month).
For this reason, most people are not familiar with the concept of saving i.e. most people talk about this topic, but only a few practice it.
But if you want to build multiple streams of income, you must learn to save a certain % of your income.
I don't care if it is 10% or 20% or even 30%!
All lm saying is that you should decide on the amount that you're willing to save each month, and you commit to that figure.
I like how George Clason explained the concept of ‘pay yourself first' in his classic book, The Richest Man In Babylon.
You must read this book in order to fully understand the concept of saving.
Now, l know most people always say staff like:
‘I will start saving when l get a pay raise'
The truth is, your desires will increase once you get a pay raise.
Your super ego will tell you:
‘Go and get that new car'
‘Move to a fancy neighbourhood’
‘Transfer your kids to a better school'
*The list is endless.
All these little things will increase your overall monthly expenses – hence, consuming all the extra income that you get.
Thus, saving should be a habit that you develop – even if you're earning a lower salary.
It's not a matter of ‘how much you earn', but it's a matter of ‘how much you keep'.
If you earn a million bucks every month, but then you spend it all on useless things like gambling, you'll remain broke forever.
That's why you see some famous celebrities who makes huge amounts of money during their careers – but go bankruptcy soon after retirement.
Or maybe some lucky lottery winners who wins a million bucks – but go broke in just a matter of few months.
Thus, you should learn how the concept of saving works – so that you wont struggle with handling finances.
You can also read the famous Rich Dad Poor Dad since Robert clearly explained how a person can easily manage his/her finances.
Short-Mid Term Investments
Short-Mid Term Investments
Now that you've decided on the % you're willing to save each month, you need to invest that money.
Obviously, you don't want to keep your savings under the pillow – since the money might lose it's value due to inflation.
‘Your money is your employee which should work for you’.
Thus, instead of keeping your savings in your bank account, you must put that money into work – so that it can generate more money for the boss i.e. YOU!
Most people thinks of real estate and stocks when it comes to investing.
These tools are great – but for the long term.
Here's why:
On average, the stock market and real estate yields less than 10% returns per annum.
For example, if you invest 10k in real estate or stock market, you'll get a maximum return of 1k per year (or $83.333 per month).
For this reason, you might spend more years trying to build a significant net worth.
But if you invest in online businesses, you might get a higher return for your money – hence, allowing you to build your net worth much faster.
I’m not saying that stocks and real estate are bad – NO!
But all lm saying is that these tools are great for maintaining your wealth in the long run.
With that being said, my favourite way of generating more income faster is to invest in internet based businesses.
The reason being that these businesses are highly scalable – since you can serve more clients at scale – unlike the traditional brick and mortar businesses which limits you to your geographic boundaries.
Internet based businesses are the tools used by the ‘new rich' – since there's no limit on the amount of money that you can make.
That's why you see some 20 year old kids on social media bawling in G-wagons, living in luxurious mansions, eating at exotic places (living the lifestyle) – because they know how to leverage these kind of internet based businesses.
I like how Naval Ravikant explained how people are leveraging ‘code' & ‘media' to get rich – which is true.
And studies shows that there's more millionaires who were created during the internet age than any other period of time.
Thus, an internet based business is the way to go!
With that being said, here's some of the best internet based businesses right now.
(i) Ecommerce
(i) Ecommerce
Do you know that you can sell products online – without having to worry about building an expensive brick and mortar store?
That's right!
You can start your own ecommerce business with little capital – and you can leverage the internet to get customers.
You can easily find a supplier on platforms like Alibaba or AliExpress – and you can easily sell those products on your own Shopify store, or even on popular marketplaces such as Amazon, eBay, Etsy, etc.
And the beauty part is that, you can be in your little basement in Zimbabwe, dealing with suppliers in China, whilst selling to European and American markets.
Sounds interesting haa!
(ii) Affiliate Marketing
(ii) Affiliate Marketing
Do you know that you can partner with some of the biggest companies like Apple, Nike, Adidas – hence, allowing you to advertise their products on your website or YouTube channel?
That's right!
You can signup for different affiliate programs in order to partner with those companies.
Once you get accepted, you'll get a custom tracking – known as ‘affiliate link’.
Your goal is to drive traffic to those links – through organic or paid methods.
When someone buys those products through your links, you'll earn a commission (affiliate commission).
And the cool thing about this business model is that you don't have to stress about inventory, shipping, customer support, manufacturing, etc.
Your goal is to drive traffic to those companies – and you'll earn a commission in return.
There’s a lot of people who're making 5 or even 6 figures every month – since this business model is highly scalable.
👉You can read this article if you want to learn more about affiliate marketing.
(iii) Selling A Digital Product
(iii) Selling A Digital Product
Alternatively, you can sell your own digital products online and make some decent income.
The reason why digital products are profitable is that, they’re only created once – and they can be sold over and over again – without incurring any additional cost (there's no marginal cost of replication).
For example, if you create an online course or an eBook, you can sell these resources for years to come – since the selling process can be automated through utilising various softwares like ClickFunnels.
And you can also get many customers for those products through running paid ads!
*The list of internet based businesses is endless! You can do further research on Google and YouTube.
Long Term Investments
Long Term Investments
Assuming that you're now making some decent income from your businesses, it's now high time to invest part of your earnings in real estate or stock market.
These vehicles allows you to maintain your wealth – since they are more passive in nature.
The key is to educate yourself on how you're going to invest your money – since there are different types of real estate i.e. buy & lease, flipping, buy & hold, etc.
Thus, it is important to do your research before investing your hard earned money.
When it comes to stocks, l don't mean active day trading – where you have to sit in front of the computer all day long timing the dips and highs.
But l mean other forms of passive investing e.g. Index Funds – where you buy some shares in various blue-chip companies.
In this case, you don't have to worry about the short term dips and highs – since you'll receive your dividends either way.
And the famous Index Fund is the S&P 500 – which comprise of the top 500 companies in the US stock market.
Anyways, this is not an investing course – thus, you might need to seek further education for more clarity.
Wrapping Up
Wrapping Up
Going back to our earlier question;
‘If you stop working today, how long will you survive – using your savings?’
I know this question sounds scary for most people – since most people don't plan beyond the 30 day calendar period.
But if you build multiple streams of income, you wont stress about this question – since you'll have some financial backup options.
The topic of Financial Education is not taught at school – thus, it's your duty to educate yourself regarding this topic.
Thankfully, this generation is blessed to have some free resources like YouTube videos, podcasts, blog articles, eBooks, etc.
But no one will tell you to access these resources!
It's your choice to decide whether or not to seek further knowledge!
Related:
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Want To Test Your IQ?
Want To Test Your IQ?
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