How to Create Multiple Streams of Income

My Multi-Level Marketing Mistake

Unfortunately, it took a while for the real lessons to sink in. I was probably 20 or 21 when I read Rich Dad, Poor Dad the first time, which means I wasn’t exactly sure who I was yet.

I knew I wanted to work hard and make money, but I wasn’t sure how. This made me a prime candidate for  multi-level marketing pitches, and the dream of “getting rich quick.”

If you’re unsure what multi-level marketing is, it’s a term used to describe any business model that rewards people for sales and recruiting others to work beneath them. Think essential oils, AdvoCare, beach body, and all the other annoying sales pitches that clog your Facebook feed.

Since I was young and impressionable, I tried two or three of these companies before giving up. I made some money selling, of course, but not nearly enough to justify the money I spent on products and the time I invested.

On the flip side, however, the experience helped me quite a bit. Even though I knew I wasn’t cut out for multi-level marketing, I did begin to recognize that I wanted more out of life than just selling stuff to make a buck.

I learned I wanted to help people, and that I wanted my profits to be the byproduct of my success.

Where multi-level marketing forced me to put profits over people, I wanted to do things differently; I wanted to build a business that helped people first and made profits last.


How much time self-made millionaires devote to new income streams

If you have a consuming 9-to-5 job and/or other sorts of commitments at home and at work, carving out the time to devote to starting another income stream might seem daunting. Based on what I've learned from my research, you can start small:Set aside no more than five hours each week and begin slowly building something new. 

If you're not sure where to start, think about the subjects, skills, and activities you are most passionate about, and explore the ways that you could monetize one of those

In my research, other than consistent saving and investing, passion was by far one of the most important shared attributes of the self-made millionaires in my study. 

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How to Evaluate Your Income Streams

It’s important to first evaluate your income stream options before financially committing to any one of them.

Here’s a list of factors that I would use to assess each potential income stream before moving forward:

16. Become a referral source

Every small business needs referral sources in order to maintain sales. Make a list of small business providers that you use on a regular basis and feel you can recommend to others without reservation. Then contact the owners and see if they have any kind of cash referral offers available.

You can do this with accountants, landscapers, electricians, plumbers, carpet cleaning services — the list is endless. Keep a list of these businesses, and be ready to refer them to your friends, family and coworkers. You can earn a fee on each referral just from talking to people.

Don't overlook referral programs at work either. If your company offers a referral bonus for either new employees or for new customers, then take advantage of that plan. It's easy money with virtually no work.

3. Try affiliate marketing and make sales

This is a passive income technique that is better suited to people who have blogs and active websites. You can sign up to promote certain products or services on your site, for which you will be paid either a flat fee or a percentage of the amount of the sale completed.

This isn't as hard to do as you might think, since there are thousands of companies in the world who want to sell their products in as many places as they can.

You can find affiliate offers either by contacting vendors directly, or on dedicated websites, such as ClickBank. It's always best if the product or service is one that you are either very interested in or is highly relevant to your website.


Big business has been diversifying its income streams for centuries. They expand their business operations into different sectors to generate new streams of income. Almost any company can diversify. A flower shop can develop a separate wedding flower business, for example, or offer mail orders. The most potent diversification is into a completely new business sector. But that takes a lot of effort and expense. 

An excellent study of a company that has grown and diversified is the Virgin Group. Initially started by Sir Richard Branson as a record label, Virgin has since expanded into aviation, holidays, mobile telephony, and much more.

An example of a good way for an electrician to find other streams of income is to work with property management companies. His core business may currently be private homeowners, but management companies often need additional tradespeople. Another route could be to start offering courses to people on basic electrics and how to stay safe with electricity.

Aside from diversification, there are other ways to generate income known as the seven streams of income;

  • Earned Income
  • Profit Income
  • Interest Income
  • Dividend Income
  • Rental Income
  • Capital Gains Income
  • Royalty Income

Many of these are not available to everyone. You need to have money already to benefit from some of these income streams.


After employment, I think that most individuals gain income diversification through investing.  It is important to look at why we invest: because at some point we plan on using this money for something.  For most, it is saving for retirement, and the investing is done through vehicles, such as a 401(k) or IRA.  But investing is not just about stashing money away for a rainy day – that is what an emergency fund is for.  Investing is about having enough capital to generate income.

Investing generates income through dividends, interest, and return of capital.  You really want to maximize the first two, and stay away from the return of capital as much as possible.

Think about it.  If you are saving for retirement, you are trying to save enough in investing to generate enough income to replace your primary salary.  Let’s take my friend’s example above: $50,000 a year.  To generate $50,000, you would need to have almost $1,700,000 saved, and be able to generate a 3% cash flow on that money (which is reasonable if invested in dividend paying stocks).

You could also draw down on your principal if needed, but this is a return of your invested capital, and if you continue this for a long period of time, you run the risk of exhausting your resources.

If you’re ready to start investing, check out our list of the best places to invest!

3. Focus

Start with a single stream of income first. Do not be distracted with new strategies or new business opportunities. Continue with what you started until you are able to generate a consistent income. Then you can add another stream of income.

Why Bother with Multiple Streams of Income?

Lots of authors say they “just want to write” but there is great danger in this mindset, as it is an impossible goal for most authors. A better goal is to set up income streams that don’t require vast amounts of your time to manage.

Sacha Black, ALLi Blog Editor, is a typical multip

Sacha Black, ALLi Blog Editor, is a typical multiple streams of income case study

ALLi’s Blog Manager Sacha Black is a perfect case study for the value of multiple streams of income.

“I used to work as a project manager, and I lived in a property that was owned by my employer. During the last two years of being employed before I went full-time, I was under risk of redundancy four times. If I’d been made redundant, not only would I have lost my income, I’d have lost my house as well. I was completely beholden to them and felt like I couldn’t leave. From that moment on, I swore I’d never let anyone have that much control over my freedom.

What does this have to do with you and your writing? When you only want your income to come from one source, i.e. your book royalties, you’re putting yourself in financial jeopardy.

If you only receive income from book royalties, you’re in no different a situation than I was working in project management. Too many authors have had their accounts closed by big distributors for indies not to pay attention to what can happen.”

Book income is volatile. Algorithms alter, often, and as well as the vagaries of self-publishing platforms, there are many reasons a book can stop selling. Reader tastes can change. Ads can stop working. A world event can change everything.

Having multiple streams of income means you are not in an all-or-nothing situation. You’re in a better situation to weather storms.

Dividend Income

When you buy shares in a company, you become part-owner of that company and entitled to dividend payments. Well-timed investments in companies can generate excellent passive income streams.

Keep Cash Flow Flowing

In business, cash flow is always crucial, but publishing income is not consistent. In a month  when we launch, or have a sale, income bumps up. Another month, when the sparkle of shiny new books has dimmed, and you’re still months away from finishing the next book, the income drops down.

Multiple streams of income can even out the flow. You can have a more consistent income from  patronage, sponsorship, or membership. If you offer other products, such as courses and merchandise, you can run sales or promotions on those products between book launches.

Sacha Black:

I felt frustrated for a really long time hearing that ‘backlist is queen’ or that you needed to run sales or promotions or whatever else to generate cash. When you’re starting out, those things are hard because you only have one course, one book, one product. There’s only so many times you can run a sale on the same product. If you don’t have other options, you can quickly burn out your audience.

It’s different for everyone, depending on which income streams you have and how big your audience is, but there comes a point where you have enough products to rotate sales and promotions, and everything changes. You’re not making pennies any more on your sales, but hundreds or thousands of pounds.

5. Invest

The stock market can be overwhelming, but you can focus on these three tasks to make it simple: filtering, timing in and timing out. Mutual funds are a great investment and they are everywhere. How do you choose? Select the one that has the longest track record. Furthermore, the longer you invest, the lower is the risk.

Creating Multiple Income Streams

The point is that you can diversify your income in various ways.  You can basically choose one of each from the categories above, and create a very diversified income portfolio.

The other point is that it is pretty easy to get started.  You don’t need to be super rich, and you don’t need a lot of time to get started.  To say it requires no time would be a lie, but you don’t need to make anything listed above your life.  You can work at your job, invest your excess income, save to buy a rental property or rent out a room in your current house, and you start a side job online without breaking a sweat.

The reward from these activities will be financial freedom!

How many income streams should you have?

There is no “one size fits all” advice when it comes to generating income streams. How many sources of income you have should depend upon where you are financially, and what your financial goals for the future are. But having at least a few is a good start.

“You’ll catch more fish with multiple lines in the water,” says Greg McBride, CFA, chief financial analyst at Bankrate. “In addition to the earned income generated from your human capital, rental properties, income-producing securities and business ventures are a great way to diversify your income stream.”

Of course, you’ll want to make sure that putting in effort into a new passive income stream isn’t causing you to lose focus on your other streams. So you do want to balance your efforts and make sure you’re choosing the best opportunities for your time.

Passive income is not

  • Your job. Generally, passive income is not income that comes from something you’ve been materially involved in such as the wages you earn from a job.
  • A second job. Getting a second job isn’t going to qualify as a passive income stream because you’ll still need to show up and do the work to get paid. Passive income is about creating a consistent stream of income without you having to do a lot of work to get it.
  • Non-income producing assets. Investing can be a great way to generate passive income, but only if the assets you own pay dividends or interest. Non-dividend paying stocks or assets like cryptocurrencies may be exciting, but they won’t earn you passive income.

Closing Thoughts

There are so many ways you can start building multiple income streams even in just the next 6 to 12 months.

Keep in mind that creating multiple streams of income is not an easy task, as it typically takes:

  • Hard work
  • Research
  • Patience

Depending on the type of income stream you are building (like a long-term side hustle), then you might not see results within the first 12 months or even the first 24 months.

Unless you win the lottery, you probably won’t get rich overnight.

So, put in the work and stay focused on the long-term goal of building wealth and you’ll start seeing results.

Your bank accounts will thank me later.

Do you plan to create multiple streams of income? Let me know in the comments section below.


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