Millionaire Rule #10

Generate Multiple Income Streams
There are two components to having more money left over in the bank at the end of the month. The first is to reduce expenses and spend less money. The second is to increase your income. While it may sometimes seem impossible to make more money on will power and elbow grease alone, creating multiple income streams is a sure-fire way to bring in extra cash. Branching out from your traditional day job to seek new ways to create income is an integral part to becoming wealthy if you, like most of us, don't pull down the big bucks. This installment of the Millionaire Rules series will explain the importance of having diversified sources of income and some suggestions for how to get started increasing your cash flow.

First off, if we want to become wealthy we must also be willing to do some extra to get ourselves there. If you do the exact same thing as everyone else, how will you "get ahead' in life? At the end of the work day most people go home and use their time for leisure. They watch TV, they go for a beer with the guys, or they read a book. A person who wants to be wealth would use that same time to take a second job, further their education, learn a new marketable skill, or start a home business.

Anyone can find a little extra time to make some extra money. I have a friend who referees a few soccer games every week. He will earn between $15 and $40 per game (90 minutes). It may not seem like a lot, but if he were to do an average of 3 games a week, 9 months out of the year, it would add up to $3500 onto his income each year. That is enough to compound to over a quarter of a million dollars over 25 years. I have another friend who got a room mate to rent out a room in his house for $500 a month. That adds $6,000 a year onto his income. That is more than enough to fund a Roth IRA to the maximum!

Personally, I have jumped into the world of blogging and using eBay to turn unused junk into cash. A little bit of my time has brought in $940 in extra cash over the last two months. I have also found that I really enjoy what I am doing. I found a hobby that earns money rather than costing money! Think about what you are passionate about and find a way to turn it into extra cash. For example, if you love collecting vinyl record why not instead sell records online. If you enjoy arts and crafts, start selling your creations at local craft fairs.

A local business leader in my wife's home town is a great example. When he was a young man color television was a hot new trend. He and his brother scrimped and saved the money they earned doing odd jobs for the neighbors and bought a nice new television. But, instead of putting it in the living room and wasting their evenings watching it, they rented out their TV for a few dollars a week. It wasn't long until they had made back their whole investment. Again the boys took their money and bought another TV, and then another, and then another. That rental business that started with some odd jobs and a single TV set has been built into a $500 million dollar fortune.

Stocks, bonds, and real estate are also a form of income diversification. Rather than make money from a job or by working, you earn income from dividends and interest. Even today with my very modest portfolio there are days that I make more in the market than I do at my job. The market will rack up gains and build my wealth even if my paycheck stops. It is a great feeling to know that my investments will continue making money long after I quit working for my money.

The ways to diversify your income are nearly limitless. The effects of broadening your earning potential can be dramatic. Pick something you are passionate about and harness that enthusiasm to create wealth. A couple extra hours, a few days a week, is enough time to drastically improve your financial situation. Lets get started!