How to build seven income sources and get rich is what we will understand in this blog.
How to earn more and get rich? The answer to this question has intrigued people across the globe for a long time. While everybody wants to become rich, most people do not know how to begin their journey. But this journey cannot start without understanding two critical variables, which are income and saving.
Table of Contents
Income & Saving
These two variables have four combinations among themselves; they are
1) High income & high saving
2) High income & low saving
3) Low income & high saving
4) Low income & low saving
People with low income & low savings are people with limited means. While people with high income & high savings are what we call rich, and that is where we should aspire to be.
Of the two variables mentioned above, we see a lot of emphasis on the saving part. Since childhood, we get taught about the importance of saving. Even when we grow-up, and start earning, we hear about savings from many quarters, including the government, which incentives our particular savings in the form of tax deductions.
Over time, our mindset becomes such that we only think about saving more and more to become rich with the same income source: our job or business. To a large extent, our profession becomes the only source of income. Additionally, we try to save as much as possible from what we earn. For some people, this process works well. For many, this focus on the only source of earning and savings does not work well. The emphasis on single income sources does not work for most people, as many people do not get the right value for their efforts.
In such a scenario where the rewards do not match the efforts, things can become frustrating. Hence the reliance on a single source of income is not a great idea if somebody wants to become rich.
Who becomes rich?
If we look around, we find that rich people have one or more than one exceptional skills. We see multiple excellent skills among entrepreneurs, top executives of organisations, artists, sportspersons, and politicians. Unfortunately, most ordinary people are not that exceptional.
The people with exceptional skills usually have their skill sets so highly visible that pursuing a career based on those skills becomes an obvious choice. This does not mean that they do not have to work hard or see ups and downs. They, too, have their fair share of hits and misses, but they ultimately see success. While ordinary/common people are the ones with no (obviously) visible skill, these people choose their careers based on other considerations.
Does this mean that ordinary people cannot become rich because they are not exceptional?
No, it is not the case. Even ordinary people can become rich within their limitations, but they do not become one because of two reasons. The first reason ordinary people do not become wealthy is that they do not play to their strength(s). These strengths may not be exceptional, but they are the strength(s), nevertheless. The second reason ordinary people do not become wealthy is that they stop investing in themselves after completing formal education.
Are you wondering, what could be the biggest strength of ordinary people? Most’ common people’ are Jack off all (many) trades, which is their biggest strength. Unfortunately, people do not realise that being the jack of all trades is also a strength.
How being Jack of all trades is a strength?
Being a jack of all trades is a strength because a jack of all trades has multiple skillsets. The only limitation is that the skills are not refined enough to take that person to the top level. But with numerous skill sets (even though not that refined), a person can start initiatives to earn from multiple income sources instead of trying to make a big income from one source. Hence jack of all trades has the potential to build multiple income sources. Thus when those multiple income sources are added, they become big. And this is the only way for ordinary people to become rich apart from waiting for luck to change and win a huge lottery or getting a substantial inheritance from someone.
How do people become rich?
People become rich when they start earning more money than they need. And there are only two ways to make more money. The first way to start earning more is by doing exceedingly well in the profession in which a person is. The second way to become rich is to start multiple sources of income. Somebody can argue that only a few can create multiple income sources, as most people find it challenging to do it. The argument against multiple income sources would have been valid some decades back, but not anymore. Today there are so many opportunities and options that if a person is willing to create multiple income sources, they can do so easily. The only thing required by an individual interested in creating multiple income sources is investing time in developing skills.
Now the question is, if someone wants to have multiple income sources, then how many sources of income should a person have?
The number of income sources/streams depends on multiple reasons. Hence, it is difficult to give a single number and say that a person should have that many income sources. We know that there is variance among individuals concerning key-parameters required to have multiple income sources like qualification, experience, time at hand, and the burning desire to succeed. Hence every individual would be able to have a different number for income streams. But what is important here is the realisation that everyone can have more than one source of income and become rich.
Once the realisation to have more than one income sources/stream occurs, the next stage is finding a new income source/stream. Let’s look around a little and try to see how people make income in different ways. We realise that there is a possibility of having up to seven different income sources.
These 7 sources income are not any shortcuts or hacks. These are straightforward and honest ways and means for ordinary people like you and me to have a minimum of 7 sources of income. These income sources are seven different categories of income generation. As an income idea could fit in multiple categories, it is essential to consider it only once.
Seven Income Sources
If you understand Hindi you can watch this video on seven income sources.
1) Income Sources from education/experience
People can create one income source from their education or experience. Here we are not talking about a job/business which an individual is currently involved. People invest 18-20 years of their life into education, and then some more years to gain work experience. Hence, it makes sense to put that knowledge and expertise to better use.
Depending on the education and experience, people can start with a business, like consulting, online virtual assistant, online or offline classroom instructions, web-based training, e-learning courses, and seminars. People keen on becoming rich could easily do these activities after work hours or on the weekends.
2) Income Sources from Creating a product
Creating a digital or physical product could be another income source. Today, if someone creates a physical product, they can sell it through the conventional route of distributors & dealers or sell at an online marketplace like Amazon. If anybody wishes to know more about selling on Amazon, they can read this blog https://sgfranchiseadvice.com/how-to-start-e-commerce-company-from-home/. Or somebody can start a food business from home or create a digital product like an APP, Online course, or website. People interested could easily create most of these digital products part-time. Interestingly, once a digital product gets built, they need few adjustments or tweak from time to time, thus requiring much less time later on.
3) Income Sources from Offering a service
After creating a product, offering a service is another way to create a new income source. There are many services which a person can provide with minimum or no special skills like transcribing and virtual assistant. At the same time, some services require experience and knowledge like accounting and financial consulting. Depending on the skill levels and expertise, an individual can easily offer the customers service and make additional money.
4) Income Sources from a newly Acquired knowledge/skill
A person can also acquire a new skill or knowledge and generate a new income source. In today’s time, developing new knowledge or skill is not at all problematic. Interested individuals could use open online sources to gain a new skill or ability. Learning skills like coding, a new language, financial management, cooking skills, ethical hacking, lead generation, and Search Engine Optimisation can help a person build an original income source.
5) Income Sources from Royalty Income
Royalty income is the income an individual gets when someone else uses its creation. As a creator of a book, music, photograph, software, or a business model, an individual can make some good money in the form of royalty. Yes, creating software or having a successful business model can also help in earning a royalty. Popularly, royalty is associated with artistic creations like singing, music, or a book. But a lesser-known fact is that by creating software and leasing it (not selling) for further use, creators can earn royalty from it. Similarly, if somebody owns a successful business model, it can franchise it and earn royalty against it. Royalty is considered a passive income which everybody should aspire to have in their income portfolio.
6) Income Sources from Passion/Hobby
Imagine being able to make money from your hobby. Who doesn’t want that? Nobody, but people still do not think about it. People do not think about it because of their mindset. When we indulge in a hobby like designing, writing, photography, painting, astrology, our attitude is to take the mind away or take a break from current issues. It is more of an escape or a relaxing route for us. How can we escape from our daily routine o relax if we think about money in our hobby? We do not have to think about money while pursuing our hobby. First, we should try to bring our hobby in front of people without much expectation, and once we have a response, we can think about its pricing. In this way, a hobby can become a source of income too.
7) Income Sources from being a Silent Investor
Silent investor is someone who invests some money in a venture and does not involve itself in day-to-day operations. A silent investor can support a large amount in a single business or invest small amounts in multiple businesses. Investing a small part in numerous local businesses reduces the risk due to the diversification of investment. Thus, this enables the investor to get a portion of the profit from those businesses. Usually, people become silent investors when they have some spare funds to invest. Another type of silent investor is the person who invests in property in partnership and earns a portion of rent every month. In this case, a silent investor is not involved in today’s management issues of the property.
To become rich, it is not critical for a person to be exceptional. Even a common person can become rich by building seven income sources. These seven income sources are just the guiding lights. People with strong desire to earn more and become rich can have, even more than seven income sources.
In this blog we discussed following points:
- Relationship between earning and saving
- Who becomes rich?
- How common people can become rich.
- Being jack of all trades is a strength.
- How do people become rich?
- Seven Income Sources