This series – Avoiding the rat race – is a very important and significant topic in personal finance. Hence, it is necessary that keen attention is placed on the several areas covered as understanding them will set you up for an amazing journey to financial freedom.
It is important for me to state that personally, the journey to financial freedom is a continuum. It requires constant and conscious efforts from us.
In the previous article, we introduced the concept of budgeting. Thus, I believe you will agree with me that a budget is an estimate of your income and expenses. While your expenses may be a long list, as the popular Nigerian saying (Problem no dey finish), most of us tend to have a rather short list or stream or source of income. In fact, some of us have just one stream. This situation poses questions like “What happens to us when that one and only stream of income collapses?” How long can you survive without borrowing if your one and only source of income closes? I can tell you are shaking your head while ruminating on these questions because of the realization of the risks attributed to having just one source of income.
The impact of having multiple streams of income cannot be over-emphasized. This has been widely spoken about, however, some people do not act on it. They ponder on it for a while and procrastinate the plans. While some are confused about the other streams of income, some do not have an idea of where to start from. Thus, this article provides an insight on key areas to understand on how to accumulate wealth via having multiple streams of income.
Before delving into owing several sources of income, it is important to understand how money works. Without having to deviate from the crux of the article, there are seven money skills (as stated by Robert G. Allen in his book titled Multiple Streams of Income). The seven money skills are: Value it, Control it, Save it, Invest it, Make it, Shield it and Share it. These seven essential money skills should be learnt and practised consciously as they will give us proper understanding of how money works and how we can grow it.
In choosing the streams or sources of income to adopt or add, it is very beneficial for us to adopt the concept of selecting sources that generate money for you with or without your presence. We should all adopt the same ultimate goal as Garry Trudeau, a famous cartoonist, who stated his ultimate goal as “being able to create a lifestyle that does not require my presence”. We should endeavour to select or create means that can generate money for us even while sleeping.
Some of the major sources of income are but not limited to: Investments in Stocks, Investments in Real Estate, Investment in Financial Instruments (such as bonds, Eurobonds, Mutual Funds, Treasury Bills, etc.), Forex Trading, Building a blog, Monetizing your hobbies, Building your business, Freelancing, Selling e-books, Offer a service/Develop a product, Rentals, Content Creators, Digital Marketer, Social Media Manager, Online tutor, Consultants, etc. These and many other opportunities can be utilized as other streams to earn more income.
As stated earlier, the journey to financial freedom goes on and on. Conscious and constant efforts must be invested in order to grow our wealth. It is important to learn and practise how to generate a lifetime of unlimited wealth and one of the ways to achieve this is by inculcating the habit of having multiple streams of income.
Stay with us as we walk you through the journey to financial freedom.
Thank you for reading.