My 12 Sources of Income at Age 63

Do you feel like building wealth is impossible without sacrificing your time, your, Your energy, or even your peace of mind? Listen, if you've ever wondered how to create a life where your money finally works harder for you than you did for it and not the other way around, this is the episode for you. Because today I'm literally going to pull back the curtain on the 12 income streams that I've built by age 63. And actually, they were built decades ago. And I'm going to show you how they've literally given me the freedom that I have today in my life to be able to make choices and do the life the way I want to do it.

Multiple income streams. It used to be this kind of lofty desire, and it would be cool to have multiple income streams. I got to tell you, today I think it's a necessity. It's an absolute necessity if you want financial freedom. And I think that the pandemic and the things that have gone in our work on, in our world have demonstrated that. Here's, here's what I want you to think about when it comes to investing. We talk about diversifying our portfolio. And why do we diversify our portfolio? We put things in cash, in stocks, in international stocks and growth stocks, and we put it into bonds and real estate, and we create this diversified portfolio of holdings.

From building our wealth. And the reason we do that is to reduce the risk in case one asset class or one thing goes bad. Not everything goes bad with it. So, so you're, you're safer and, and it's a more solid footing. Well, that's great. We do that in investing, and I, I teach that. But at the same time, why are we not doing that with our income? See, here's what I realized early on, and I think that the pandemic demonstrated that, and the kind of world we're in demonstrated that when we find ourselves in a situation where.

We'Re solely reliant on a single stream of income.

We are highly risked in the sense of, if I can't generate that income, if I can't work, if I lose my job, if I have a health issue and I've got no income streams to supplement that one income stream, I'm in trouble. Now. There was, there was the time in our, in our world where people would work for 40, 50, 60 years at the same company and they'd get a pension at the end.

But it's not really that way that anymore. You know, you'll see people that have worked 20, 30 years. My brother worked 35 years for the same company. It's unusual. In fact, if you listen to some of the people out on social media, they're telling you to change jobs every three to five years to try and stairstep your income. And I understand that strategy. The challenge is, is that if we are just trying to find income in one stream.

We have too much risk there. And so I learned early on that I needed to have multiple streams of income. But I'm going to give you steps to do this at the end of this. But I want to break down the, the different streams of income, give you some of the backstory, give you where it's at today, why I have it, why I added it, where it came from, all those things. So you can kind of look at it through your lens, your life, and see how that comes into play. Because it's the one thing that really, when I got diagnosed with the cancer and I said, I'm going to shut down my business, I'm going to stop doing, you'll see some of these income streams got shut off.

We, I was able to, to still survive, and not only survive, thrive, my wealth actually grew even though I wasn't working as I fought the cancer. And that's what I want for you, is to really make it work for you in a way that you don't have the kind of risk that if you lose your job, you're in trouble. If you lose a contract or you lose a client, you're in trouble. All right, so I'm going to break these down for you. I'm going to walk you through them. I'm going to take them from the most active to the least active, the most leveraged, as I call them. And so what I really want you to understand here is this, is that you have different kinds of income. Active income. I call this the five incomes in my book. Building your money machine. You have active income, which has a very high level of effort. One on one, it's your employee, you're punching a time clock, you're filling out timesheets like I did as an accountant. You're trading time for dollars. And that takes all the effort. Because if you're not there doing it, if you're not running on the treadmill, you're not getting paid. So that's active income. From active income, we create what I call business income, okay, where we start to leverage our expertise and start to pull ourselves out of the everyday and the tasks. So it is not a one to one relationship between effort and earnings. But, but it is a multiple of one to one relationship of efforts, journey. So less effort, more earnings, if we do it correctly. But both of those will still require your efforts. Then there's some things above that that start to remove you even more and leverage your time back so you have the gift of freedom. Things like the next stage up, the next level up is asset based income. Okay? Rents, royalty, royalties, those kinds of things. Real estate, that kind of thing. Then from there is residual income, creating something getting paid over and over again. And then the, the top level is portfolio income. So that's the hierarchy we're kind of breaking down. But I'm going to, I'm going to walk you through my incomes. We'll talk about it, why it's important, and what to do. All right? So at the highest level, the. I'm a CPA by education, and my primary income historically came from me doing valuations. In other words, I was the expert that would come in to value companies, value damages, testify at trial, to consult on a sale of a company, to, to consult on, on an estate, those kinds of things. So I built my practice and I built my business and I, I built my first business really out of that. And, and the challenge with that is it's time for money. You know, I've got time sheets, and so the ability to grow it, the ability to scale it, the ability to leverage it was only connected to how many hours I could put in and how much I could increase my hourly rate. But it was a lucrative area of business that allowed me to create cash flows to use to build the money machine. Remember, I say in the book that you're on two journeys. You're on the earnings journey, which is your active income journey, and you gotta be on the money journey, which is your wealth creation journey. And we gotta do them at the same time. So I started with that. That, truth be told, I'm winding it down. I'm not taking, I'm taking very select clients, very few. I get paid well to do it. And if they don't want to pay me the way I want to get paid, then I don't take the job. I'm at that stage where it's probably going to fall off in the next 12 to 18 months at the longest. Okay. Then.

The second type of income that I get paid is what I call board fees. So I get hired to be part of a board of directors on different companies, and as a director, I get a director fee. Now, this takes some time, but it doesn't take a lot of time. Because typically board of directors meet quarterly. So I have to meet for one or two days a quarter with the rest of the board and take a couple phone calls through the year and then get paid relatively well for that. Now, in order to do that, you have to have some expertise. You gotta be able to provide value, strategic value, financial value.

Perspective, those kinds of things. So I get a chance and I get asked to be on boards. In fact, I. I enjoy that part of it because I watched businesses grow. One of the boards I was on, we built this business from 25 million to $250 million. And it's continuing to grow. So I love that as an opportunity. It's less time but good compensation to be able to do that. So I get paid board fees. Then the third area of income is my public speaking. I get paid to speak. Now, it's an interesting thing because I didn't know anything about the speaking industry, but to build the first stream of income, the valuations, no one wanted to hire me. And since they didn't want to hire me, I was trying to figure out, how do they. How do I get a job? And the way they. Because the reason they didn't want to hire me was because they said I didn't have any expertise. But I did. I just hadn't demonstrated yet. And the only way I could figure out how to demonstrate it was to go out and speak. I hadn't spoke before, but I went out and started speaking, learned how to speak, and it built that valuation practice. And I was doing the speaking to get the gigs, the valuation gigs, to get paid, but I was doing speaking for free. And then someone said to me, mel, did you know you could get paid to speak? And I go, what? I would get used on my report card when I spoke. Now you're telling me I can get paid. And. And that's when I saw that as a profit center and said, huh? And so now I get paid to do keynotes around the book, around finances, around money, around legacy building, building businesses, those kinds of things. And I get paid a speaking fee anywhere from, well, multiple five figures to come in and speak to corporations, to associations, to groups, to. To do that. And I. It's. It's active because I gotta show up unless I'm doing it virtually, but still, there's an active role in there, but it's not every day. So I'll speak, you know, a couple times a month, depending on the month, and work from there, which is cool, because it also.

Works to leverage some of the other stuff I'm doing building the reputation, selling the books, selling the courses, doing the coaching, doing the mentoring, getting on boards. All of it works together. There's this, there's this congruence in the income streams that, that work together to get a synergistic effect. And that's what you're looking for with your income streams from the public speaking is coaching and mentoring. Now I don't take on a lot of one on one clients. I take on three to four one on one clients a year on a one year contract. And I act as their family cfo basically working with their advisors and working with them to navigate their path to financial freedom and whatever their, their vision is for their, their life. I also do group coaching where I have groups that I do over a 12 month period and I do something called money machine master plans where I will do these plans, financial plans for, for people to build it out. So those are, they don't require daily effort, but they do require consistent effort and attention to the clients, to the groups, to the coaching. As I'm doing it and I'm very selective with it. Everything at this level is very much application only because I want to know that I enjoy working with them. I want to know that I can make an impact. I want to know that they're going to do the work that they need to do so we together can get them to accomplish the dreams that they want. But this is an income stream that is there now.

Those are the more active income streams that I have. Now we start to go into what I call hybrid income streams that leverage off of those active income streams and so there's less effort here. So the fifth income stream is affiliate marketing. This is where if I know of something or a product or service that I want to recommend because I believe in it, then I can recommend it and I can get paid a commission or fee for recommending it. Now you got to disclose it and all that stuff. I don't do a lot of this because I'm very, very selective. My audience, you guys and everyone, I'm very protective of it. I don't take it lightly that you're in my community, that we're having conversations that I get a chance to serve you. So I'm not, I don't look at it as a platform to just sell, sell, sell, sell, sell. But if I like something and I think it will serve you, I'm going to let you know about it. And if you choose to, to join or buy, great. It's not costing anything more for you to do that. And I get a piece of the profit from that. That's what affiliate marketing does. Okay, So I have an arm of affiliate marketing where I will, I will recommend or I will promote someone one or two or three things during a year and that's it.

But there isn't a lot of effort in there other than the promotion and the communication, because the fulfillment is on the person that's actually selling it. Then, then there's courses. You know, I've got multiple courses. My investing simplified course. If you're trying to figure out the fundamentals of investing, how to get started, how to build the portfolio the way I have and what I look at, that course is a course that walks you through everything. Everything from what accounts, what assets, how to build the portfolio, what portfolios look like, how to evaluate the funds and the investments. And every step of the way I created that once. I can sell it repeatedly and they can get the results repeatedly. In fact, people are in it right now. I've got my affluence blueprint course, my money machine blueprint course that's coming out. All these courses are taking my intellectual property and my knowledge and the information and giving it to them in a way that they can go digest it, do it themselves, and get the results that they need in, in their life. Okay? And I get paid for that. So that's, that's courses, that's number six. Number seven is what I would call royalties and advances. Okay? When I went to write this book, I got an advance from the publisher, so they pay me a fee in advance of releasing the book, and then I get a royalty on the book every, you know, every time it sells? And, and so the key here is this again, create it once, sell it often. Are there things in your life that you know that you can create and sell repeatedly and not have to recreate it over and over and over again? If I had to write this book every time someone wanted to buy the book, Lord knows that would be hell. So.

Royalties and advances. And I get royalties on some of the courses and stuff that I have because I'll white label them to other folks to be able to use my intellectual property. So there's a lot of different avenues where you can get paid for your work. Now I'm very, again, very careful here because it's my work, it's my intellectual property. And so I want to make sure that I keep control and protect the intellectual property in the proper way. Okay, that leads me to number eight. Number eight is one of the most Recent income streams that I have, and that is YouTube AdSense. So I do the videos for YouTube. And now in order to, to have YouTube AdSense pay you, you have to qualify. And the way you qualify is you have to have a minimum of a thousand subscribers on your channel and you have to have a minimum of 4000 watch hours over the last 12 months on your channel. Then you're qualified for monetization. Doesn't mean you'll get paid, doesn't mean that, that it will all go the way, the way you want it, but it does mean that, that you have the ability to do that. Now, for instance, the difference is this. I get paid based upon something called cpm. In other words, the channel generates revenue based upon a cost per thousand, basically is what it is. And they get, they pay me rpm, okay, the creator revenue, if you will, a percentage of it, about 45, 50% of it. Depending on the genre of your topic and even depending on the video, you actually can get paid differently and you can make a fair amount of money on it. I happen to be in an industry where the genre gets paid. Well, the CPMs are high. They're anywhere from 15 to 25, 30, $30. So that means that for every thousand, I'm probably making 8 to to $12 per thousand. So for instance, there's my video that I just literally just released this week. Okay, it's only made. I'll refresh this. It's only made 100, and.

It'S made $120 today by by day. So in five days it's made $120. Here's what I want you to understand. The advertisers are paying $19.

For per thousand. I get paid $10 of that basically per thousand. So based on the number of views, and this is only 5 days old, it will continue to grow, but it's not always $19 per thousand and $10 per thousand. Here's another one. That's an older video. This was my emergency funds video. They're literally paying $27 per thousand. I'm getting $15 per thousand. And it's a combination of views and the CPMs that make it happen. Here's one video that We've got over 475,000 views on it. This one made $3,800 since we released it. I'm getting paid 20. They're getting paid $20 per thousand. I'm getting paid $8 per thousand. But because we've got over 470,000 DOL views, it adds up to a Lot of money. And so it's important for you to, to understand that, that these things add up. And think about this. With the Adsense I've got, we're going to hit episode 300. Now, not all of them are monetized, but if you have 50, 60 or 100 videos that are doing well and getting thousands and thousands of views and you're getting paid on them, they all stack on each other. So YouTube AdSense is going, is a big.

Revenue source that I think is going to grow. The challenge is it goes up and down. There'll be a month where you make a couple thousand dollars, $5,000, $8,000, and then there'll be a month that you make two. So it's not a dependable income source. But if you're going to make videos anyways and you're going to do the work, might as well get paid for it. All right, so that's revenue source number eight. Number nine is real estate income. Now, I love real estate. I just don't like it at the very beginning of your investing journey because there is too much risk if you don't have the critical mass in your portfolio to carry it. If you get a bad real estate deal or a bad tenant. I've talked about it on other episodes, but I own a couple of properties. I've known them for, for many years. They're all of them are paid off except for one. So they cash flow and we get rents on a regular basis from those properties. The other way that I invest in real estate is through real estate investment trusts. I don't like being a landlord. I don't want the call that's at 11 o' clock at night saying, well, the toilet's clogged. I don't, you know, go get a plunger, leave me alone, you know, I'm sleeping. Yeah, so. So I don't want to be a landlord. So a lot of times my real estate is invested in what's called real estate investment trusts, which is like a mutual fund that holds properties and they pay out their dividends and at some point they'll either sell the properties and pay out the proceeds. Now you're giving a piece of it up because someone's managing it, running it and all that stuff. But at the same time I'm getting diversification because they own a hundred properties or a thousand properties and it's geographically dispersed. So I get real estate income on a regular basis from, from the properties. That leads me to revenue source number 10. This is trading. This is something that I do sporadically. I'm talking about stock trading, I'm talking about options. This is a riskier play depending on what you do. I don't do any risky plays really, but it is, it's more of a job because you gotta be at the computer, you gotta, you gotta be watching the charts, you gotta be doing that. There's a little more of an active role. I do this on a semi regular basis, but I don't day trade. I do certain types of trades that allow me latitude of time and flexibility. But I'll make five figures, multiple five figures, high five figures just from trading. Okay, then revenue source number 11 is dividends and interest. Now you can do specific dividend investing where you're buying stocks in companies that pay dividends. Now a dividend is basically the company saying, hey, we made a profit this year and we're going to take a portion of the profit and put it back in the business to grow the business more. And we're going to take a portion of the profit and we're going to give it to you guys, the shareholders, as a thank you. And that's a dividend. And so I don't actively chase dividend income. It comes because I've invested the way I have. But this, this, dividends and interest is multiple six figures in income every year. The one, the one challenge with this is realizing that your dividends and interest don't have taxes withheld. So this is an income that's going to require you to put aside a portion for taxes. If you don't plan right, you can get blindsided with it. Now some dividends are going to be taxed as capital gains, more advantage tax rates, but you got to plan for it. But this is truly passive. And when you build a money machine and a portfolio that's properly invested, you're going to get this just by, by having it. And, and so it's there. But this is part of what gives you the opportunity to live off of the earnings while the machine keeps generating the dividends. Whatever dividends and interest it paid out last year, it's going to do it again this year.

Now if I took it out to live off of, great, but I don't, I use the dividend and interest to reinvest. So the machine gets bigger because, because I don't need it because the other income streams are supporting me. So I have a choice to mix and match where my income comes from because I have multiple income streams. And then the, the Last 1, Number 12 is portfolio gains and losses. The Portfolio itself goes up. Sometimes it goes down, but in the long term, it goes up. Now that I don't really get income off of it. I get wealth growth off of it. Because the only way I can realize that income is to sell part of the portfolio, which I don't like to do. And so I allow it to grow. But what that's doing is building the money machine bigger and bigger and bigger. So what happens, the dividends, the interest, and everything else keep growing, and so we have the income coming from it. So hopefully you start to see how there's this flywheel effect of having these income streams in place to properly move through it. Now, what are steps that you need to take if you were going to do it? I'm going to talk about six steps to get you dialed in to start building multiple streams of income. Okay. Because it's fine to hear mine, but I want you to have yours, and mine may not fit you. And so here's step number one. I want you to start small, but before you start anywhere, I want you to look at the first source of income like mine was valuations. Make sure that you have that one dialed in. It is spinning, it is producing income, it is secure, and it is working. I don't want you trying to build multiple streams of income at the same time. It's diluting your focus, it's diluting your efforts, and it will dilute the results. So I want to get one stream of income spinning and doing really well first. Then we'll look at another one. Okay. Then we'll look at another one. So start small and then leverage what you know. Okay. What. What is your current job? See, I was started out as, as doing valuations. And then in order to do the valuations, I was speaking. Well, I was already speaking. Why not get paid to speak? So I added that income stream. Okay. You see where we can do that? Then I decided to create a course, but it's all like one or two degrees off of what I'm already doing. So it's not a left turn or a right turn and a big shift.

It's ancillary. And now that's what creates that intentional congruence, as my friend Nito Cobain talks about, between your income stream. So they all work together, but start small. Figure out your skills and. And the knowledge, and figure out how can I leverage that to get an additional income stream. Is it a course? Is it coaching? Is it mentoring? Is it, you know, a download of some sort, A tool of some sort? Okay, then number two, after you have the first income stream running and working, I want you to choose the next one. So you're only going to be working on one income stream at a time in the build phase. So pick something that's manageable based on your time, your effort, and the resources that you have at hand. Okay. Maybe it's starting to do affiliate marketing. Okay. But you need to possibly have a list or a following to do that. But that's easy. If you have the following list and everything, do that because the fulfillment isn't on you, it's on them. Okay? So choose one income stream. Make sure that, that you can get that cash flowing before you go somewhere, somewhere else. Number three is to validate that you can do it successfully before committing fully to it. Okay? Then number four, I want you to take the profits from that and I want you to invest it in one of two places, other income streams or in investments. So you're building, you're building the portfolio, you're building your investments, and you're building on other income streams at the same time. Okay? And number five.

This is something you should be doing your whole journey, and that is embracing continuous learning. As you skill up, you get the ability to create more things that might have the opportunity to make a difference and, and create other additional income streams. Okay? And then number six, diversify over time. Create the portfolio that works to create an ink stream structure that gives you flexibility. But here's the important thing. It's not just to give you flexibility. I want it to give you fulfillment. I want to reduce the risk in your, your income portfolio between the active and, and the leveraged income streams. But I also want to make sure that you don't jeopardize the quality of your life by saying, I'm doing seven different things. That's not good. So let's, let's do it properly. Let's be intentional in doing it. So here's, here's. As we, as we close out, I just want you to think through it. If you are working for one income stream, I want you to start looking for a second one. Not because you're unsatisfied, not because you're not content, but I want to get you to start thinking broader and bigger, to build something that's going to support you without your efforts down the line, and to de risk the dependency on a single income stream. Okay? I hope that this helps. I hope that this kind of inspires you and lights a fire underneath you to sit back, hey, what is one of these income streams that Mel has that I might pick that I could go into. Okay. And pick one, just one, and start there. All right. If anything comes up, I'd love to hear from you what your thoughts are on this. Do me a favor, leave me a comment, leave me a review, share it out and subscribe to the channel that would mean the world to me. All right. Until I get a chance to see you on the road to your financial freedom, take this, use this. Build your income streams. Build your money machine. Build the life that you deserve. All right. Till I see you again, always, always strive, live a life that outlives you. Cheers. Thank you for listening to the affluent entrepreneurship with me, your host, Mel Abraham. If you want to achieve financial liberation to create an affluent lifestyle, join me in the affluent entrepreneur Facebook group now by going to melabraham.com group and I'll see you there.

And that's it for this episode of building your money machine, where we help you learn how to master your money, eliminate financial stress, and live a life of choice. If you found this valuable or helpful to you, here's what I'd love for you to do. If you do me a favor, go to Apple, Apple podcasts, or wherever you're listening to this podcast and rate and review the show. It helps us tremendously to keep us at the top of the list so we can continue to get this information and this message out to people. Because I truly believe that financial freedom is your birthright, and I want to help each and every one of you claim it. Thanks so much.