We all know the simple and straightforward way to generate income – get a job somewhere, work the whole month – and earn money. This is the most common way today to earn money, you trade hours of your time for a salary.
In fact, this equation goes for most people. Even the richest people today started out this way, they traded time for money. Some may earn more for their time, and some less – but we all have the same amount of time and we all have a finite amount of it.
The problem – We all have a limited amount of time
Let’s imagine a scenario where you work 24 hours a day. No breaks, no eating no sleeping. Just working and maximizing every minute and second. Let’s ignore the fact that this sounds horrible for a moment and try to understand the idea we are building here.
In addition to that, you earn 50$ per hour. That means each 24 hours you earn 1200$. If we multiply this by a month (let’s say you also don’t have any weekends.. Yikes) – it’s 36,000$ a month.
By one year that you worked that much – you would have earned 432,000$. That is an amazing sum of money – and due to the fact you haven’t even taken a single break, it’s all yours! (minus taxes..)
Ok so now that we outlined our maximized unrealistic potential, let’s take this number and make it realistic. Let’s say you only work 8 hours a day, 5 days a week. That means this number goes all the way down to 100,000$ before taxes, expenses, and more.
You can argue, well, this is still a nice amount of money. In fact, it is, but if the only way to earn money was trading time, you would never reach your full potential. You will always be limited by the time it takes to do something, and never be able to expand exponentially. That is why you need to learn how to generate more income.
Table of Contents
Making time work for you
As we already discussed, in order for us to get rid of the equation of time=money, we have to find ways for our time to work for us.
The most successful people in the world invested enormous amounts of time before succeeding at anything. They most likely failed several times, but they tried again and again.
Take books for example. The most successful books were probably not written in a day.
That means that for each day the author sat down and wrote the book, researched, revised, and edited he didn’t get paid immediately.
It might take years to publish a great book – and all that time no one will pay you. And even after you publish your book, it might take time to gain recognition and start earning great money.
As you can see – this certainly involves some risk and a large investment of time – for something no one knows if it will succeed.
In no way am I trying to discourage you from pursuing anything. In fact, I am trying to show you just the opposite.
If you go ahead pursuing something – it will take time, you might fail, and it will be hard. But when you do succeed, all the time you spent is already stored as the value inside your book \ product\ any other creation and can generate more money and wealth forever. You can generate income from it for a long time.
That means that after you spent all that time on something – your time starts working for you, and more often than not in magnitudes of the time invested!
The problem of immediate gratification
In fact, you need to understand that investing your time doesn’t need to bring immediate gratification. What does it mean?
Often in life, we believe that if we do something today – we need to get a reward for it as soon as possible. It’s a known psychological phenomenon. That is just how our brain is wired, and our whole evolutionary development is designed for that.
In fact, it is very smart from an evolutionary perspective.
In the past when we lived in the wilderness, we couldn’t sit down and work for the future. We needed to take action NOW – and harness all our energy and forces to gather food and get shelter. If we had spare time, we might plan for the IMMEDIATE future, and the concept of investing time for later rewards was not available. The thing is, to generate more sources of income you need to think differently.
Today the situation is much different. We can put in more time today and understand we may not see any profit from it in the short term. We can afford to do that because we live in a world of abundance (relative to the past). Maybe we also understand we might work for years on something until it will succeed, if at all, and that’s ok.
The problem is that this concept is still hard for us to act upon.
We may understand that in order to make future profits we need to let go of instant rewards today.
We may understand that succeeding in the long term takes a huge amount of commitment and time in the present.
But we are still hard-wired like our ancestors of the past thousands of years to seek immediate rewards. Evolution takes time to rewire us from these patterns.
We might argue that it is unnatural of us to even do it! In some ways that might be right.
But I still want to argue that trading time today for a greater cause and a bigger reward in the future is in fact possible. It is the hard thing to do, indeed. And it takes lots of willpower, doubt, and uncertainty. It also takes courage, and belief – persistence and hard work. Big words. Still, we have the power in us to accomplish these things – even though we start with a disadvantage on the evolutionary level.
Once you understand that – it is much easier to overcome the immediate difficulties that arise. You can identify them more easily and know why they are present. With time, it will become second nature to focus your mind on long-term gains, rather than short-term pleasures.
The secrets rich people don’t want you to know
The rich, those who have the most money in the world, and the freedom of time to pursue anything have a secret about money. That secret might sound obvious to you if you have been reading through this article.
Rich people in fact have multiple sources of income. That’s their “secret”. They don’t only work for their money, in fact, it is generated all the time through things they built and created.
Maybe through a product, they sell everywhere, like coca-cola, or a franchise of restaurants like McDonald’s. It can also be from industrial products like computers and cars, or by creating artworks that sell over and over again. In succeeding with that they now generate more income every passing second.
Some make their fortune from real estate, and maybe even selling courses about a field they know well.
Heres a list of common ways for generating multiple sources of income:
- Running a business
- Real estate
- Selling knowledge
- Selling a product
- Owning companies
- Creating\investing in Startups
- Partnerships in a company
Rich people usually have at least 5 different sources of income. Some of them are more passive than the others and allow to have more free time in their hands.
Though as we said earlier, everything takes time to develop and build. Even the most passive income in this list, like renting real estate requires some time to manage.
Ideas and ways for generating multiple sources of income
So as we elaborated in our list on the last section, there are many ways to generate more income.
There isn’t anyone way that is better than the other, but there are some that are more approachable and easier to get started with.
For example, real estate is a great way to generate a bigger income quite passively, but it demands a large upfront capital and doesn’t suit everyone from the start.
Best additional income streams
So lets dive in to the best additional income streams I believe are relevant for everyone-
1. Investments- investing your money is one of the greatest ways to let your money generate more money for you by itself. When you invest, you gain the percentage on the money you invested – and also on the money your money generated. So its basically compound interest in its finest.
Investing money is a skill like anything that you can develop over time. Of course, investing money comes with risk, and you might also lose money. But if you go with great companies, that are destined to grow and prosper in the future it is more likely your investment will grow.
While you don’t invest, your money depreciates and loses its value from year to year due to inflation, so it might be riskier to leave your money in the bank! In some countries, they even started to impose negative interest rates, which means your money is actually losing value each year it stays in the bank. If you have 100K $ in the bank, and there is 5% negative interest, you will have by the end of the year 95K $, and that is significant.
I do want to say that this is not financial advice and I advise you to always understand what you are doing or consult with your financial advisor.
I plan on writing a whole article about investments, their risks, and how to invest smartly in the future so stay tuned!
2. Selling knowledge – I believe that each and every one of us has some kind of knowledge that people would like to know and learn. We possess so many skills and knowledge of the world that seems obvious to us but are very hard for someone else to do.
It might look obvious that you can speak an extra language fluently, or that you can play an instrument or solve hard math problems in a breeze. Maybe you have lots of experience in the art of marketing or making sales.
It doesn’t matter what skills you possess, you probably have more than a few skills that can be taught and delivered to people who will be interested in them.
You can easily start teaching people around you by spreading the word on social media or signing up to a tutor’s website online. In fact, there are many websites that allow you to sign up and start teaching with them for a small commission. Maybe that can work for you as you grow your student base.
After you get proficient with teaching your skill, you will want to start working on teaching the masses. Today with the internet it is very much possible. You can build a great course and sell it online on the many platforms available, or start your own website and build a community around your course. The possibilities of sharing knowledge are endless, and that is the value of it.
As long as you share authentic and helpful knowledge you will always have eager students who want to learn from you and enrich their lives.
In addition to the monetary potential, this is a very fulfilling way to generate another source of income and create great connections with your students.
3. Selling services and consulting – the same way as teaching, you might have many areas in your life where you have very proficient knowledge. Maybe you know how to fix things around the house, build websites, or make a concrete business plan.
These are all services that people need and demand. You can always do them as a side hustle, and grow them over time. In fact, you can charge a high fee for each service hour, and choose only the work that suits you.
Consulting on a subject you have lots of experience and expertise in can also yield lots of extra income.
This again is one of the best ways to start generating the extra income you need to make a bigger impact in your life.
As you gain more wealth you can start using it to build more passive sources of income that generate more income. This brings me to the next point.
Scaling things up
As you start generating more sources of income, you might find yourself stuck to a certain ceiling. This is the same problem we encountered at the beginning, it is the problem of limited time.
Even if you are the best teacher around town or have the most successful service in the world, you eventually will lack the time to do more. You have a limited amount of time and that is the key to understand here.
When you start creating and generating more and more customers and students, you will need to start scaling up your business. This way you will have the time to focus on generating even more sources of income.
So eventually you work hard only on building the source of income, like teaching or a marketing agency. You generate automatic tools and bring in workers to continue the momentum, and you go on to build the next source of income. From time to time, you will need to make sure the business is running as per your level of standards, and a great tip here is to reward your managers and employees generously.
As you go on building one or two more sources of income, you will see that more options open up for you to build the more passive sources. Like real estate, and investing in a running business\startup. The starting point is the most difficult one, to build your basic capital. Then you can work from there to build bigger and stronger sources of income.
To sum it up
Generating new and additional sources of income is something that takes time and persistence. It takes hard work and I suggest you pursue fields you have passion for. Going on to build something great without the spark to motivate you is achievable, but will be much harder to pursue for the long term. As we already observed, time is by our side and long term gains is what matters in building additional sources of income.
As always, thanks for reading, and hope you enjoyed my article. I would be glad to answer questions in the comment section and hear your opinion!
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