Money and Income Streams
I am looking at my paycheck, and what I have made so far, and I find myself saying to myself, “Where did all this money go?”.
If you are like most people, you will spend it all. After working for a lifetime, you will end up with almost nothing. How is that possible?
I have worked for more than 20 years, and what have I got to show for it? It is disheartening; I am a bit discouraged, a bit dispirited. But then I pick myself up and have to think that it is never too late. I need to start where I am now. I know better now, so I should be doing better.
Honestly, it is because we were never taught about money, especially when we were in school. We know by learning money matters in the real world, through trial and error, or through self-initiative to learn all about money. Money 101 should be a class that is mandatory in every elementary school.
Money is one of the main topics that we need to continue to study throughout our lifetime. Robert G. Allen said, “Some of life’s greatest moments and most of life’s greatest sorrow stem from the decisions you make about money. Whether you experience great peace of mind or constant anxiety will depend on whether you can get your finances under control. Your relationships will be greatly affected, too. Most divorces in our society result from disputes about money.”
Do you see why understanding how to handle our finances is critical to our lives, our relationships, and our happiness to our future?
And we can learn how to play the money game, know the rules. As physician George David said, “Wealth is when small efforts produce big results. Poverty is when big efforts produce small results.”
In the book Multiple Streams of Income authored by Robert G. Allen, he gave us different ways to create wealth, which he called money mountains and the seven essential money skills.
3 Money Mountains
1. Investment Mountain
2. Real Estate Mountain
3. Marketing Mountain
How to Earn 1 Million In Our Lifetime
The real key is to set aside money consistently. The sooner, the richer you are. Save. Invest. Live on less than you earn and invest the surplus. Avoid debt. We are using the power of compound interest. A few dollars a day compounded over a long period of time; anybody can do it. And it is the simplest way to start managing our money while we are learning income streams for our future and long-term financial planning.
The 7 Essential Money Skills
- Value it
- Control it
- Save it
- Invest it
- Make it
- Shield it
- Share it
Two Types of Money Streams
- Linear – Is when we get paid once for our efforts. And when I don’t show up for work, neither does my paycheck. It is income from salary.
- Residual – Is when I work hard once, and a steady flow of income comes thereafter. One gets paid over and over again for the same effort.
This is my dream, to have residual income and have more time to do anything. That, to me, is Success, that is my definition of wealth.
The Money Tree Formula
M — Multiple Streams of Income
We want to start our own home-based business to have a safety net if our other streams of income dry up.
O — Outstanding
Select a product, service, or source of information that has lasting profit into the future. We also have to make sure that it is outstanding and can be offered at a fair price. Our goal is success longterm.
N — Nothing Down
Zero or as little money as possible.
E — Employee-Resistant
We do not want employees. Find a home-based business that you can do by yourself. If we need help, outsource.
Y — Yield
Choose high-yielding, high-profit cash cows.
T — Trend and Timing
Go with what is trending. Swim with the current, do not swim upstream. We must choose the most suitable and proper timing to start and launch our business. Get in front of the trend and ride the wave.
R — Residual
Robert G. Allen, in his book Multiple Streams of Income Here, is a list of many types of residual income that we can start exploring.
Savers earn interest.
Songwriters earn royalties in their songs.
Authors earn royalties from their books and tapes.
Insurance agents get residual business.
Securities agents get residual sales.
Network marketers get residual commissions.
Actors get a piece of the action.
Entrepreneurs get business profits.
Franchisors get franchising fees.
Investors get dividends, interest, and appreciation.
Visual artists get royalties from their creations.
Software creators get royalties.
Game designers get royalties.
Investors get royalties.
Partners can get profits.
Mailing-list owners get rental fees.
Real estate owners can get cash-flow profits.
Retired persons can get pensions.
Celebrity endorsers get a percentage of gross profits.
Marketing consultants get a percentage of profit or gross revenue.
E — Essential to Everybody Everyday
Select a home-based business, go for a product or service that is essential to daily living. The kind of business that has automatic, ready-made demand already in place. The more people need, the more frequently people need it, the more successful the business will become.
E — Enthusiasm
Select a business that you are passionate about, love to do. Gary Halbert, a great marketing guru, said, “Sell what you love. The truth is, you’ll never be truly great unless you do.”
In Summary
Our ultimate goal is the same thing that Gary Trudeau, the famous cartoonist, stated, “To create a lifestyle that does not require my presence.” We want to create income streams that don’t require our constant presence for it to make money. Our goal is to make our money works for us, so we work less for money.
Now, we know some of the basics of money management, “Knowing is not enough, we must apply. Willing is not enough; we must do.” — Goethe
And here is another one that just encapsulates our goal for this blog, ” I can give you a six-word formula for success: Think things through–then follow through.” — Eddie Rickenbacker
Source
Allen, Robert G.(2004).Multiple Streams of Income. 2nd ed. John Wiley & Sons, Inc., Hoboken, New Jersey
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