Talking about multiple income streams has been all the hype, I decided to write one to talk about our experiences. By 'Our', I refer to my Investment Consultant and the Original Money Maverick, whose Financial style I modelled after. He became a Millionaire before the Age of 30 and has helped my family out of poor Financial planning decisions for almost 5 years now.
It's often easier to emulate not just investment advice but from someone who embodies an example of how FIRE (Financial Independence, Retire Early) should be. As a client and consumer, I started out with 1 income stream like everyone else, before progressing to have as many streams as the Original Money Maverick. That's why I believe that everyone can get at least a few streams.
I hope that my sharing will help others with an ordinary background like myself understand how to develop multiple streams of income for their financial security.
The 9 Income Streams
1. Private Bonds
One of my first few investments was in private bonds. Private Bonds are similar to P2P lending, you run the risk of default from a single company but you get paid a much higher interest. Private bonds and P2P are basically companies who want to borrow more money to invest into their businesses outside of traditional financing schemes like bank loans.
It can be risky since businesses that are doing this may be in a bad financial position (no one wants to lend them money) or saturated financial position (they have already maxed out their limits borrowing from traditional sources like banks).
They are non-MAS licensed investments and you take part at your own personal risk. Due diligence will increase the probability of success rather than failure.
For example, the contact lenses shop that I invested in had so much excess stock that even sold at 50% below market price, I could still get paid back what I was owed.
Coupling this with legal documents limits my downside while paying me a 12% 'dividend' a year.
READ ALSO: How I got an 9% dividend every year - and why I gave it up 2) Ecommerce Business
I sell stuff on Amazon through E-commerce. I don't think I'm the best, but enough that I make a good $3000 - $4000/mth in net profit without having to do very much aside from budgeting and reviewing the business quarterly.
Budgeting includes determining how much profits should go back into the business for things like stock, marketing etc, accounting for seasonal factors (e.g. should I invest more into the business prior to peak season?) before taking my income.
I made the mistake of not selling high ticket items in the first few shops. Even my current shop is reasonably successful, but there are income caps. An example of this is ice cream. Margins on ice cream are well known in business to be extremely high even after equipment costs - because ingredients are extremely cheap in bulk.
Selling cars would likely have a much lower percentage profit margin (especially outside of Singapore) but the absolute profit is so high that it would take a tremendous amount of ice cream sold to make the same amount of income. In other words, cars are the high-ticket item, despite high costs and lower margins. Someone who sells cars would likely be richer than someone who sells ice cream.
This example - and mistake, perhaps - taught me a lot about my life decisions because I don't want to end up penny-wise but pound foolish in the other aspects of my life.
I have a full-time job in engineering, but I work from home and my supervisor let's me work flexibly as long as I clear KPIs. Usually I try to wrap up a week's worth of work over the weekend so that I can spend my 9-5 time on the business. I don't have much advice to give on this: maybe this will help.
I think the best advice I can offer aside from that is to watch your weight and health. Jobs seem to take that away from us.
Part of the reason I wanted to buy over the blog was because the previous owner has been commissioned to write articles for various financial publications as well as overseas blogs.
Some of the articles were much shorter and in a different format, and having a good reputation as a writer seems to open this up as a good revenue stream.
I've seen so many people feel a compulsion to contribute online, or in telegram chats - while a lot of it tends to be nonsensical, I do acknowledge that even some of those have the potential for something good if it were written and thought through more carefully.
Everyone has been writing since primary school - it can be a reasonable revenue stream contributing to other portals.
5) Crypto (Staking)
We got into Crypto around the same time - briefly in 2018 with part of a mining experiment gone wrong (maybe I'll write about that sometime) but more recently into ADA and Ethereum.
We didn't consider staking for months, surprisingly - Crypto staking is the process of locking up crypto holdings in order to obtain rewards/earn interest. Because the crypto doesn't actually leave your wallet, you're also not at risk for having the staking company run off with it or default on it. So we earn income from both the interest and the appreciation of our crypto portfolio. I'm helping my parents explore stablecoins as well.
6) 1 to 1 Coaching
We do coaching occasionally for some students who have requested it (not in the same profession). I do coach mostly younger students in ecommerce.
Coaching is really an equivalent to giving tuition - the much more recognizable side gig - just not limited to the education aspect.
You'd be surprised what people are willing to pay for your skill set - one of my employees coaches League of Legends and gets paid for it.
Explore your skillset and see if anyone might be willing to pay you to grow in that area.
7) Rental Income from Home
I'm currently staying with my parents but I own a property at Canberra that I'm presently renting out. There's admittedly little excess post mortgage and other expenses, but its an income stream nonetheless.
Like many others who are under 30 who own their own property but aren't married, I did require help from my Mum's legal name before buying over her share of the property.
Even though the entire capital is mine, I do consider myself fortunate that the circumstances were favorable for my mum to help me out legally and not to incur taxes (since she took her name off our home property).
8) Investment from Unit Trusts/Stocks [ILPs/UTs]
Lastly, my investments compound at a rapid rate whether from my small invested CPF monies of $5000 CPF OA or my cash investments through my ILP.
Neither of us is really generating income from it, but it's high growth will supply an income much greater in the future. In emergencies, the income can be called upon immediately as well.
One of the better things I did was to ignore the mass financial opinions masquerading as advice. By seeking out an investment specialist, I was able to:
a) Have someone always accountable for changes in my portfolio caused by the market or as recommended, instead of having the portfolio changed for me without explanation
b) To have a much higher performance return than standard index funds or roboadvisors - over 100% in 2021 through my ILP for similar or even lower risk levels
c) To have high performance on my CPF investments as well. READ ALSO: Differentiation - How an Understanding of It Took My Investment from $12,000 to $45,000 in 1 Year
I don't think my whole life insurance or CPF is income streams that are attainable soon, so I didn't list those, as well as similar assets.
Not every stream of income is replicable, but some streams should come first. Even millionaires developed one stream of income at a time. For a start, you can polish up your stream of income by ensuring it has higher returns and lower risks. You also want people who can work for you and are accountable for your money when things go wrong. If you enjoyed the article or have some thoughts or comments on how you can start developing your streams of income, do like - comment and subscribe!
Edited by Tina