Income is what you earn as salary, interest, dividend, stipend, gains, inflow and so on. The obvious advantage of multiple streams of income is to earn more.
Who wouldn't want to earn more but we are discouraged as kids (while some of us) to think about money and it becomes difficult for us to think about earning more when we actually do start working. Even so, most of us depend on only one source of income, i.e. our salaries. But lets face it, salary is not the only way to earn more.
Are there other ways to earn more?
Of course there are and the first step is to find out "why do you need multiple streams of income?"
Knowing your why will help you stay on track and set the context clearly.
An example can be "I want multiple streams of income so that I can retire in the next 10 years."
Next is to find out the core principles. Core principles are stuff that does not change with context. You can earn more by doing more like taking up more projects (if you are a freelancer) or earning more by compounding (say your investments that compound over time) or a combination of both.
The idea is to find out what works for you, can you spare more time to work on multiple projects or can you save more, invest more and not break compounding.
This phase will be a trial phase where you experiment with different options to check if working on multiple projects is something that you look forward to or are you getting too stressed with the different timelines and deadlines.
Step 3 is about creating the systems you create to earn more. If you are doing multiple projects, what systems are you using? For example, I will have separate accounts - one for inflow, one for outflows and one for investments.
Step 4 is about creating routines for the system to work. In our previous example, transferring 50% into the investment account as soon as I get any inflow.
Step 5 is all about following your routine without asking any questions. As easy as it sounds, execution is the hardest. Be easy on yourself. The idea is to not blame yourself. Most of us are sloppy and we slack here. If you can crack this piece, you will be set.
The next step is about tracking your metrics and measuring the outputs using the metrics. Asking yourself this question as to "How much % of my income have I saved per month?"
And the last step is to reflect on what is working and what is not. How does it make you feel, would you give it 5 star rating?
While this can work for anything you want to do, whether it is health, career or finances, knowing how to do it helps you get started quickly and easily.
Do try these steps and let me know if you find it useful and what are some of the systems you have created for yourself to earn multiple streams of income.