How many streams of income do you have at the present moment? If one is being disrupted right now, how would your life be affected?

I’d like to compare streams of income to a country’s supply chain. Let’s talk about chicken supply and afterwards you would understand why you need to create multiple streams of income. In Singapore, where there’s no chicken farms, we heavily depend on our overseas counterparts for supplies of chicken. Let’s assume if Malaysia is our sole chicken supplier in this case, and if something do happen to our sole supplier, which did happen last year, Singapore would totally run out of chicken, which happens to be the cheapest protein source available. Such impact will be detrimental to our economy directly and indirectly. In practice, of course the Singapore Government has a mandate to have as diversified as possible of chicken supplies from all over the world. This ensures that should one supplier is done, the country can still function as per normal. Malaysia was our sole supplier of live chicken stocks, and gratitude to them for halting the supply last year, and it forces the government to source for other suppliers and now we have Indonesia supplying us with live stocks too.

With the above being said, it is thus important that one build a multiple income streams of portfolios. Before I list down what are some of the streams the average Joe can start creating, let’s have an end goal in mind. For me, it is a very simple yet important principle which I stick to; Each income stream must have the potential to support my current, future, and desired lifestyle. If there isn’t a potential in terms of the financial rewards, you are better off not doing it. You got to understand that every income stream you plan to create is an exchange of your time, which is limited. Time is your resource, and you want to invest your time into ventures which are worthwhile, and for me, you want to lay out a principle so that it can guide you in your decision making process.

Let’s go through a few income streams that one can venture into:

1. Your career. If this is your sole or main income stream right now, you want to really invest your time into your career and make it grow. In short, invest in yourself so that you grow in the career, and hence income increases. In fact this is the one stream which is most predictable, and very much in control by you. As you progress massively in your career, it’s going to help you create the other streams of income later on. At the initial phase of your working life, you want to invest lots of time and effort into your career and grow from there. If you think your career at this present moment has no potential to give you the income to support your desired lifestyle, perhaps it’s good time for you to make a switch. It’s actually a very simple exercise; just look at your senior acquaintances in the company, and do anyone of them that you look at up and aspire to become 5-10 years down the road? If there isn’t, I think you know what to do next.

2. Real Estate Investment. I shall not debate exactly which kind of real estate investment is the best as there are a few in the market. Physical property; residential & Commerical. Real Estate Investment Trust; listed in the stock market. Overseas properties. Private Real Estate Investment Deals as well. In summary, where there’s demand for office and residential space, it think it’s worth to build a decent size in this area, but you want to study it. My take is, never follow the crowd.

3. Equity and Bond investment. I prefer to lump them together and treat it as a liquid assets holding, rather than splitting equity and bonds altogether. In times of inflation where consumers are the end users of everything, the only group of people who are shielded or least affected by inflation are the business owners. Well, you don’t need to operate a business, just invest in them, long term. Problem is too many of us keep on checking on the stock price frequently, and end of the day, emotions results in poor decisions making process. My take is, just automate your investment by doing some regular investment program where it will auto debit from your bank account, put it into some decent funds, and let compounding effect do the magic for you. In fact both no. 2 & 3 are passive investment and doesn’t require much of your time. What you really need to do is just funnel your excess cashflow into these asset class, and let your assets compound by itself. Spend your time on enjoying your life, and improving yourself, and not on checking the stock prices and get emotional over it.

4. Side hustles. Even if you have a full time career, you should spend a bit of time to think of your next move. Therefore I term it the side hustle. I’m definitely not referring to doing any gig economy related work. I’m sure there are Grab rider who make more than $10k per month, but their time and effort are massive, and you can quit your career if you want to go full time at Grab. That’s income stream replacement, and not income stream building though. Remember, it must be aligned with my principle; that is, the potential income to match my desired lifestyle. Before I delved deeper into what kind of side hustle one can do, I personally feel that it’s very important for you to have a CEO hour on a weekly basis, where you spend 2-3 hours on a day with yourself and thoroughly think through about your future. Doing such exercise allows you to dig deep into yourself, and find out what you are really good at, and hence what are the things you are do. Side hustle is not an immediate action, but rather it’s a process. You need to invest time into it, before it can blossom into something. Therefore I encourage people to invest in themselves even more. A side hustle can be as simple as a tuition which I think it’s something which some of you did it before. However, many of us do it as a supplement to our income, but never think of having a potential to create another stream which can single handedly cover your entire lifestyle expenses. What I’m talking here about is creating another income stream, not replacing an income stream. In using the tuition as an example, if I were many of them who are tutors in their side hustles, I’d seriously think how can I make this big with the same or little time which I have? Can I have a group tuition? Why not over Zoom? Can I hire more tutors and create a support group for my students? Personally, I’m not a tutor now, but the point which I really want to appeal to you is, you got to at least think thoroughly about it weekly, and take little actions to build it up. Start your CEO hour journey today.

5. Creating Businesses. In fact, a side hustle should turn into a business, and every time one turns into a business, and hence able to create decent income stream to support your lifestyle, you want to go back to the drawing board and create another side hustle and turn it into a profitable business again. Important thing to take note is this, you are in a business when your daily involvement is not much needed then. Otherwise you remain self employed, and one man show. This is really very very important, in order for you to scale and move on. One big failure I observed the past years was a rise in people doing side hustle, in particular baking and pastry. These people were doing fantastic things in baking great pastry and selling it online. It was a nice home based “business”, but I see it as a nice home based job for many of them. They have to be there to bake. They hold the recipes. They couldn’t delegate. The sales was so good, until some of them couldn’t take in the demand, and a few quit their full time job (income steam replacement instead 🤔🤔🤔) to pursue their passion. However, such venture was short lived and lasted less than a year, and these passion businesses wasn’t sustainable as economy open up after covid and end up their sales dried up. Therefore, it’s important one is able to differentiate between a business, and being self-employed. It’s nice to be called boss and be your own boss, but end of the day, you prefer not to meddle with the daily operations of your business, and let your capable manager and employees handle it instead.

6. Investing in private businesses. If you have been constantly investing in your network and knowledge, you definitely would have presented some opportunities to invest in businesses along the way. While equity investment is a form of investing in businesses as well, but when you buy them in public market, you are buying them through an exchange. Someone got to sell in order for you to buy. It’s a market place for transactions and these public companies mainly doesn’t require fund raising anymore. In private businesses, such as small start ups, or your friend who is doing small businesses, they often require cash to expand their business or open a business, in short they need to raise money. This is where you can come into the picture, invest in them, and be part of their company. Of course, your value to the company is not just your money, but also other values which you can bring onto the table so that you can help them to grow their businesses as well. Hence time and effort is necessary too. However, like any opportunities, they are good and bad opportunities, so it’s important you do your due diligence to check on the viability and potential of the business you about to invest. Learn to say no most of the time, and if you don’t, you are going to lose lots of money from the savings you made from other income streams.

By then, through the passage of time, you would have built multiple streams with very cashflows. At this phase, you then have a choice on either cruising it, or further expanding it. You are like an airplane with at least 4 powerful engine turbines. If 1-2 broke down, the airplane is still able to function it well and land it safely. That’s what one would want to achieve when you create multiple streams of income.

Hence, let’s say if your desired lifestyle require a $3,000 per month expenses today, aim to strive towards making each stream the ability to earn you a cashflow of $3,000 per month. If you have 5 streams, that’s a potential of $15,000 to work on. It’s easier to go in depth in each stream, than continue to explore the breadth, finding more streams. Remember, every time we are going to create a stream, your time and effort is required. Be wise.

Last thing to take note is, while you are active on your career, every single profit you made in your other streams should be reinvested into the streams and let it compounded over time. Growing your wealth is all about compounding effect. Let’s say you have made profits from your property investment, don’t commit the mistake of using that profit to give you a nice little treat of buying your dream car. Plow back into the stream and let it grow. Use your active income from the career to fund your dream car instead. Be disciplined over it.