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Creating Multiple Streams Of Income The Right Way

Oct 11, 2007
Most entrepreneurs and solo-preneurs have caught onto the new multiple streams of income trends. The objective is sound. 'Don't put all your eggs in one basket.' The dot com bust of the late 1990s gave birth to this when thousands of successful businesses lost everything, almost overnight. Now, those same business owners are diversifying to prevent another catastrophy.

It is possible to create multiple streams of passive income. However, it is developing the stigma of being a myth because most people approach the theory from the wrong perspective. The basic theory is to create multiple streams of income until the revenues exceed the expensive, transforming the income into a passive income.

Understanding The Term Passive Income

This doesn't work for many because they misunderstand the term passive income. The marketing definition does not mean easy, or foolproof. Passive Income does not mean that the business owner can sit back and watch their wealth build while they swim in their new pool.

One easy way to escape this misconception is to exchange the word residual for passive. Residual means that there is work done up front before the rewards are reaped. That means that the work you do today will generate revenue in six months. But, you cannot stop working, or the income stream will slow to a trickle.

Understanding The Term Multiple Streams

Many people fall into the trap of believing that multiple means different. Instead it means diffusing your finances, time, and resources among the many. The experts all agree that a business should focus on building one strong steam of residual income and then 'leverage' that to create multiple streams of similar income.

Example:

This means that the main stream is founded in selling books on self employment. The strong stream will involve marketing the book, distributing it into various online and brick-and-mortar stores, and focusing on the product until it sells well.

Then, the business owner will focus on a companion online course. This course will not only support the book, but it will also build respect and credibility for the company. This in turn will launch a public speaking or conference opportunities. Each stream of income is woven together. Each one is inherently dependent on the other, but each one generates income from an entirely different vantage point.

One day the business owner has build up a down-line of people who can continue training and managing the conferences, creating the 'almost' passive stream of income.

Reality Check
The reality of the situation is that the passive level never comes. To build a business this level, the business owner will need to embark on market research, training education, and other aspects of the business that were not necessary in the start up phase.

Each stream of income must be measured and analyzed. Those that do not perform well, or generate enough profit need to be dropped, and replaced with new ideas that the competition overlooked.

The business owner also need to keep an eye on trends and their markets. Most trends fade and die within five years. What works today needs to evolve or it will not work in five years. Today's social concerns will be forgotten in five years.

This example may seem bold and expansive for some small business owners, but it is just a guide to enable new business owners to sit down and create a vision for their future.
About the Author
Mark Walters is a third generation entrepreneur and author. He offers free training and investing videos designed to speed you towards financial independence at http://www.cashflowinstitute.com/videosignup.htm
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