Multiple Streams of Income and/or Multiple Sources of Income

I got a text message from Nathan less than an hour ago asking me if I’d heard about the 7 Streams of Income concept. The truth is I may have heard someone talk about it before, but just don’t really remember, but since I couldn’t just spout off Earned, Profit, Interest, Wrath, Sloth, The Professor and Maryann, Sleepy, Dopey, Doc, and Grumpy Cat, I simply said I didn’t know what it was and went and looked up a video about it. I might do a blog post about the video later.

In the meantime, I would like to talk about what I thought it was, before I looked it up. There is a book called “Multiple Streams of Income” by Robert G. Allen. I don’t remember a whole lot about the book, but I believe that the basic concept was that you become more or less recession proof if you diversify the ways in which you get paid. I’ve had a belief for a while that everyone should have a part time job of some sort. In fact, whenever I came into this belief I don’t believe any one called it a “side hustle.” It would be like if you had an internet based audio show for half a decade before anyone uttered the phrase “podcast.”

I didn’t necessarily believe that your part time job needed to be entrepreneurial. I just believed it needed to exist. Around the time Nathan first met me, I was doing door to door fliers for an Asian food restaurant, and I would occasionally pick up other jobs. These jobs were done in short bursts in between working 60 hours a week as a pizza delivery driver at two stores.

My reason for this belief is that if one job has fewer hours for you, or if you lose the job entirely, you always have something to fall back on. Recently, when I got fired from Domino’s, I signed into Uber Eats twenty minutes later and delivered for five hours. Two weeks later, I started listing on my eBay account.

When you talk about the 7 streams of income, what you’re doing is setting up to be recession proof. Earned and Profit Incomes are basically work income, unless you’re a passive business owner with the Profit Income. Interest, Dividend, Rental, and Capital Gains Incomes are the things you get when you save your money in investment vehicles. Royalty Income is sort of, though maybe not exactly, work income that turns passive after the work is done.

I think that calling it “streams of income” psyches people into focusing on the concept of having more money coming in to spend, even though some of it is literally not spending all the money you make. I think a lot of people are averse to savings. I remember Miguel once asking me “What if I die a month from now and I didn’t enjoy the money I made?” Now that it’s twenty years later, I’ll ask, “What if you’d saved enough to retire early?” To be fair, at the time Miguel was closer to my current income than to his current income, so there wasn’t much to save.

A couple of other things about my recent firing that don’t play into the concept of having multiple streams of income. While I went and delivered Uber Eats that night, I didn’t need to. I had $1,000 in the bank, a few hundred in cash, $5,100 in a Roth IRA, and my lifestyle setup to not require me to have much income. I can get by with only $300 a week to some extent. Every so often I need a little extra, but that’s where having money saved, and sometimes working a few extra hours, comes in.

It’s something we don’t really think about when we’re looking to increase our income to increase our spending power. If you bring home $24,000 a year and live off of $15,000 then you don’t need to replace much money if you lose your job. By living below your means you’ve created a stream of income for the future. Mostly no one would care about losing their job tomorrow if they had a million dollars in the bank. At least they wouldn’t care from a financial standpoint. They might have liked the job.

If you have enough money to live for the rest of your life at your current standard of living then you’re essentially retired. You work if you want to at that point. While it is important to focus on the 7 Streams of Income, Multiple Streams of Income, and/or Multiple Sources of Income; what you’re really best to worry about is to get away from being a slave to your income as quickly as possible so that when you do make an income it’s because it’s something you wanted to do.

I know. We pretty much all need incomes. And not everybody can do that, Chris. I know. If I’d already achieved what I’m talking about, I promise you I wouldn’t be delivering Uber Eats, but I am less a slave to my income than I was even a year ago. The point is to move in a direction. Financial freedom is an odd journey where you don’t have to reach the destination before you start seeing benefits as long as you’re not making the journey on a treadmill where you walk a lot but never really get anywhere.

Chris McGinty is a blogger who was going to deliver tonight, but then decided that because he delivered earlier this week when he was in a less writing mood that he could skip delivering tonight while he was in a more writing mood. It’s something, I guess.

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