If growing your money is by itself challenging enough, creating everlasting wealth to last you and subsequent generations of your family, is even more so. With much to study, products to know, advice to hear, and decisions to make, it can be hard work.
A little surprise then that people tend to shy away, preferring to take life as it comes. Also, while some people feel they have too little to worry about, others feel they have too much to care.
The fruits of such labour though can be rewarding enough to compensate, and well worth the exercise. Let me provide you with a 17-step guide to creating such a money tree - right from identifying various sources of income, creating strategies for investment, planning fund allocations, nurturing and growing one’s ideas, and finally, distributing your assets in an appropriate manner when the time comes.
Step 1: Multiple sources of income
The most important step - the more you have, the more you can deploy and subsequently reap. Investment made using your basic source of income - be it salary, professional fees or business is done with the objective of making profits or earning interest.
If, instead, you can figure out a way to get a stream of income into your bank account for many years, you have successfully created an additional income stream. Now what do you do with this income stream? Invest it again to create another stream of course!
The important thing to understand is - have alternate sources of ongoing income. Let us first discuss investments, since that is simple to understand. You may have an asset class of your choice - equities, bonds, paintings, house property and so forth.
The questions to ask are:
Will these give me that stream of income?
What stream of income will it generate (ongoing or just appreciation)?
Question this income in terms of taxation, efficiency and periodicity.
Examples
Multiple sources of income may also arise from the nature of your work, services you can offer etc. This is attainable for all -- business, professional and salaried people.
A CA living in a tier II city has his wife running a small business from home, giving finishing touches to shade cards used in the paint industry. They employ 10-12 people, generating a income of about 20-30 k per month.
Or, consider part-time or weekend work, leveraging your hobby skills to generate income, creating a website, writing, publishing, setting up an outsourcing home business etc.
We can all do such things - the options are endless.
So, what should be your ideal first target for generating an additional source of income? You should be able to match your current income, or at least your current expenses.
So, what should be your target make this multiple sources of income concept work for you? Replace your current income. Or at least meet your current expenses from your alternate income source.
Opportunities are everywhere, just look around. It's hard work at first, but when the money starts rolling in, its sweet.
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