I have been sharing the idea of Multiple Sources of Income( M.S.I.) since I started running Financial Intelligence seminar in 1997. I seldom have anyone disagree with me about the importance of having MSI. Most agree that it is no longer a wish or a nice-to-have. It is the rule of today. However while I can get a 95% agreement I estimate that fewer than 30 % of people out there really have any significant income sources beyond their main job or business. Why? Simple…we are all educated and brought up on a single income source idea. Whilst having more than one source of income is desirable it takes more than just a wish. It requires a change….a change within us. A change in Money Beliefs.
Why you need to have Multiple sources of Income?
In today’s society we need Multiple Sources of Income. Why? Knowing that change is inevitable and things are no longer the way they used to be, if you have only one source of income, that source can disappear overnight. The worst scenario is if you have only one source of income, and the number of days you can survive forward if you stopped working today is very small. You can’t afford to lose that source of income and that puts you in a financial corner.
If you are in a job …look at it today. If a machine or someone willing to take a lower salary than you can replace what you are doing today, you should be really concerned.
For example, just look back 15 years ago. If we needed to deposit cash into the bank, what did we do? We brought our money to a bank teller who counted it and updated our bankbook for us. Now what do we do? We go to a machine that helps us do the same thing.
So what happened to the bank tellers sitting there 15 years ago? Some of them will be promoted to managers, but as we know, promotion only happens to a small group of people. Let’s say out of 20 people, maybe one will move up the ranks. A few more will be able to stay in their positions. But what about the rest? Chances are, they are likely to get the golden handshake.
So you cannot count on having your job for your entire lifetime. You must change to be the one who gets promoted or better yet, you do not want to rely on that job solely as you would have Multiple Sources of Income.
Having Multiple Sources of Income not only helps insulate you in case of job loss but is a step towards creating more wealth so that you can do what you want to do. If your current job is not a passion job, then losing the job is a matter of time or choice, while you build your Multiple Sources of Income.
It’s no different from people who eat unhealthily and never exercise – until something happens to them. By then it may be too late. That’s why doctors always advised that prevention is better than cure.
The same applies here. Why wait to look around for opportunities until after something happens to your one and only paycheck? Start doing it today!
If you are in a business and it gives you the only income you have then you need to realize that we are living in a fast changing world today. Technology changes, government policies changes, market and economic changes are common happenings and will continue to be the case. Especially we are impacted by the fact that we are living in a globalised world. That means unlike twenty years ago whereby changes happening thousands of miles away does not affect us much or it takes a long time before it affects us but we are living in a different world today. Something happening in one country can affects the whole world; from terrorism and conflicts (such as a bomb in Bali) to economic downturns (such as housing loan problems in the United States) to diseases we never heard before (the Sars outbreak) to global warming and natural disasters (the Tsunami in Acheh and the never-before flood in Singapore). All these affects economy, and can affect you and your business.You never really will know.
So while you have a business you should still look at creating other sources of income especially passive income.
A second benefit from Multiple Sources of Income besides independence is choice. When we ask people why they don’t quit their job or the business that they don’t really find any passion in and pursue their dreams, many will say, “You don’t understand! I’ve no choice!”
But if you have only one source of income, isn’t that your own choice? Some of us are still going to say, “You still don’t understand! I’ve no choice because I need to pay all my bills at the end of the month!”
But we do have a choice! What stops us from creating Multiple Sources of Income? If we really want to, we can all find the initial time and energy it takes to create a Money Making Machine.
So it’s not that we don’t have a choice; it may be because we are afraid to take that new step! We are afraid to get out of our comfort zone and take action! We are afraid we could fail!
Yet it is paramount that we overcome our fears. Choice is the human person’s most valuable attribute. We are neither stronger nor faster than animals but we are superior. Why? Because we, unlike animals have a clear conscious mind to make choices. The ability to think, analyze, draw conclusions and choose is perhaps the greatest gift we have as human beings.
And choosing to set up multiple sources of income will give us even more choices after that. Let’s look at this again.
If you have only one paycheck, you have very little choice. You cannot just quit once you don’t like your job anymore. Why? Because yes, you do depend on that one monthly paycheck. However, if you have more than one paycheck, wouldn’t you have more choice?
The same goes with a business owner. Smart business owners make sure the spread their risk and would not put all their eggs in one basket.
The roadmap to being financially free and doing what you love is not rocket science. It’s quite simple and logical. If you start to create multiple sources of income, you position yourself to have more choices.
We can summarize it like that:
Multiple Sources of Income
Why most people will not have Multiple sources of income?
Many will not be able to actually create real and significant multiple sources of income. Why? Because most mind just does not entertain it. Some people think that income source corresponds directly to job so to get an additional income; we must find an additional job. This resides in the mind of many and that thought of having to do a second ‘job’ would defeat most people. Some would just say .they have no time. Or no money. Or no experience. And a whole list of barriers. Mental barriers.
Well at the end of the day one thing is clear if you really want to migrate from a single income source mentality to multiple source of income you need to be willing to change your mind set. Otherwise it just would not happen. The best and in some cases the only way to do that is to RE-EDUCATE yourself.