The Seven Income Stream Fallacy: The Power of Focus Over Quantity (2024)

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The Seven Income Stream Fallacy: The Power of Focus Over Quantity? ›

In a world that champions the mantra “more is better,” the allure of building multiple streams of income is potent. The conventional wisdom suggests that the wealthiest individuals have an average of seven income streams. However, this idea often leads to a fallacy of quantity over quality.

According to a report from the IRS, the average millionaire has not one, not two, but seven different sources of income. That's right – seven streams of money flowing into their bank accounts, building their net worth and securing their financial future. Why are multiple income streams so powerful?

You can have as many income streams as you want, but the right number for you will depend on your goals and current resources. If you don't have a lot of time to devote to establishing many passive income streams, it may make sense to only have a few until you can free up time.

Meaning of income stream in English

a regular supply of money that comes from something such as an investment or business: These bonds provide steady income streams. There would be an attractive income stream from renting out part of the property.

Multiple streams of income are different types of income that come from different sources. You can have multiple streams of personal and/or business income. Each income stream can be passive, semi-passive or active. We'll look at some examples of each later.

90% of millionaires made their money in Real Estate. I became a millionaire without owning a single property. But I own 6 small businesses that make me $725k/year. Here's why I prefer buying businesses over Real Estate: -- 1) Cash Flow The average rental property in the U.S. cash flows ~$300-$500 (some even less).

Ninety percent of all millionaires become so through owning real estate.

The Bible also offers some pretty amazingly specific guidance on diversifying our income streams. Ecclesiastes 11:2 says, "Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth." In other words, don't put all your eggs in one basket.

This means your earnings per stream can fluctify depending on total monthly streams and subscription revenues. Also, Spotify's pay per stream averages around $0.0032. Therefore, to earn $1000, you'd need roughly 312,500 streams. But remember, this is an estimate.

What does 7 streams of income mean? ›

The most written about income streams typically include: earned income, profit income, interest income, dividend income, rental income, capital gains, and royalties. The theory goes that diversifying your income in this way can protect you against financial downturns and accelerate wealth accumulation.

Key takeaways. Passive income is a regular cash flow that doesn't require much time or effort to maintain. Think: selling courses online or renting out a room in your house. You can potentially make passive income through investing in funds or stocks that pay dividends, as well as bonds, bond funds, and real estate.

Annuities are income streams purchased from life insurance companies or friendly societies with either ordinary money or superannuation money. Superannuation pensions are income streams that are purchased or paid from a superannuation fund.

The average millionaire has seven streams of income, which may sound surprising to many. However, it is their mindset that leads them to achieve this financial milestone. Having multiple sources of income can help one sail through the ups and downs of any industry, be it network marketing or real estate.

There's no one-size-fits-all answer to how many streams of income you should have. It depends on the lifestyle you want and the skills you have. But 65% of millionaires have at least three streams of income, and that's an achievable number for most people.

Furthermore, Richard Corley, author of “Rich Habits: The Daily Success Habits of Wealthy Individuals”, analyzed IRS data and found that 75% of millionaires have multiple income streams. And, that makes sense.

Most wealthy people don't watch a lot of TV, according to Corley's findings, which he revealed on his Rich Habits website. According to him, 67 percent of wealthy people watch less than one hour of television per day versus the 77 percent of poor people who spend more than one hour in front of the TV daily.

Economic downturns, unexpected layoffs, or even personal circ*mstances can quickly disrupt the safety net of a single income. That's why creating multiple income streams is no longer a luxury, but a necessity for professionals seeking financial security and freedom.