#102 Build Wealth Through Multiple Streams Of Income

Foreign. Welcome to the Passive Income MD Podcast where we talk about creating your ideal life through multiple streams of income. I'm your host, Peter Kim. If you enjoy hearing about this stuff, make sure to hit subscribe so I can bring it to you every week. Now let's get on with the show. Hey everyone, hope you've had another great week. This week we're gonna be talking about one of my favorite subjects, streams of income. And the question that I have for you, maybe you've had for other people, it's how many streams of income should you have? Now I know I talk a ton about having multiple streams of income. I mean, I think it's one of the best ways to create wealth and build long term stable wealth. But I know I'm not the only one who talks about it. I mean, there have been researchers out there and they've talked about this one statistic, you might have heard this before, that millionaires on average have not one, but seven streams of income. Now I remember reading that phrase and it made me think, you know, I'm trying to be a critical thinker. A few questions came to mind. One of the first questions that I thought of was, you know, is seven the magical, like the magic number of income streams that turns you into a millionaire or is it that the millionaire knows how important multiple streams of income are and so begins to, in a way, collect them, Right, to accumulate bunch of different income streams. Another question that I had, it's that, you know, are those seven types of streams or, or could those seven streams be in the same category? For example, are they all in real estate? Maybe there are seven different properties. And finally, do highly paid professionals like us really need this many streams of income or should they just keep working hard in our given profession? And I'm sure most people listening to this, you're either physician, high net worth individual in the medical field. You know, unfortunately I try to look out there. I remember trying to Google all this, this kind of information, all these questions. I couldn't find out too much additional information online. I looked all over. But from my own research, I've landed on a few ideas that I think make the most sense. So let's go back to those questions and let's just go tackle those one by one. So do the income streams make the millionaire or is it the other way around? I mean, the number seven, it may not be magical, but I think it does seem like these concepts are kind of like two sides of the same coin. Meaning that yes, if you have enough streams, they may eventually make you into a millionaire or whatever it might be. But it's also true that the millionaire, the person who has great wealth, they understand the importance of having multiple income streams. I mean, without them, this person may not have broken the million dollar mark. When I think millionaire, by the way, I'm thinking someone who actually makes a million dollars or more each year. I know that the millionaire might be someone who has a million dollars of net worth, but as high income professionals, we all know that is achievable relatively easily with our current jobs. When I'm thinking about in terms of the millionaire, the thing that gets me excited, it's the person that makes seven figures a year in their streams of income. And that's what I'm talking about. So having more streams of income, I think that ultimately helps the millionaire. And then also the millionaire also knows that it's absolutely important for them to have and so they tend to collect these things over time. Now for the second question I had. You know, are these like seven individual categories of these like streams or are they all from the same category as with all investments, I believe that it makes the most sense to diversify your streams of income. I mean, that's up to a point. I mean, if you're finding a category that works for you, then yeah, you should go pretty deep into it. Then again, you still don't want to put all of your eggs in one basket. So yes, diversification is key. Talk about that a ton. I'm talking about the whole picture here, not only the way you gain income and increase your net worth, but also what you do with it. Now I believe that smart people, they've learned that the best way to build wealth is to turn your active income into multiple passive income machines. Now, in a moment, we're going to be talking about a bunch of different streams of income. We're going to talk about a couple different types. But the other question I had was, should you focus on building more streams of income or is your profession, your day job, the top priority? Now, I believe that highly paid professionals like us doctors should definitely be looking into multiple streams of income in spite of the incomes that you have. Those high salaries, what are those tie 1099 reimbursements that you might get? I mean, in fact, I believe that more than anyone out there, we're in the best position to accelerate our growth towards financial freedom. We, we're able to actually put in time and create and earn the necessary capital to immediately throw into investments so that we can create additional streams very, very quickly. We just have to be strategic about it. You know, if you keep your expenses in check, you're somewhat disciplined about where you move your capital. You can move that earned income from your day jobs and then you can make that and plant that straight into these money making machines or trees or whatever you want to call it, whatever those passive income streams are, you're able to create those because you have the capital from your day job. I mean, obviously there's a balance here, but you just have to figure out exactly where it is for you. But just know that we do have an advantage over most people out there, that we are in a great position to be able to do this. Everyone just wanted to pop in here real quick to let you know that our course, our signature course, Passive Real Estate Academy, is now open for enrollment. It's only happening until April 18th. Again, it's there to help you confidently invest in passive real estate and get you where you want to be in about four weeks. Not only do you get a whole bunch of content, live Q&As, expert sessions to support you as you kind of gain this knowledge, we also have a community there of like minded investors to support you on the journey. And even after you take the course, we have the community and ongoing community that shares deals together, vets deals together. And honestly, it helps us become smarter investors together and hope you can join it. We'd love to have you as part of it. And you can go to passiverealestateacademy.com to find out more. Thanks so much. Now I know what a lot of people are thinking. What are these different streams of income? Well, I've learned that there are a bunch of different overall general types of streams. I'm going to go over them really quickly. Number one, earned income. I mean, this is obvious to everyone. This is your day job as a physician and it's honestly most people's primary source of income. This was easy to understand because this is what you do. You trade your time for money. Unfortunately, there's these quotes out there that say you'll never earn your way to financial freedom. And that's why earned income by itself is not enough. Number two, there's business income. You own a business now, you either make or sell something. You own a practice, a you own, you know, you run a business where you employ other healthcare professionals, whatever it might be, you provide a service and that's business income that comes from there. Number three, there's an income called interest income. Now this is income you make from lending your money out like you act as the bank, meaning that this might be some sort of like either peer to peer, some of these crowdfunding debt deals, you know, funding some of these fix and flips that we talked about, or even money in a savings account or whatever it is, a high interest savings account, or some of these other ways to create interest from the money that you have. Now there's also dividend income. This might be familiar to many of you that invest in stocks, especially a taxable account, where this money that's distributed to you as a result of owning shares in a company and that's considered dividend income. Then there's also rental income. You own something and you rent it out. This is all what happens in real estate. We talk about this all the time. I mean, the most common is owning a rental property such as an apartment building, and you rent it out to tenants, they pay you monthly rent and you get income from that. Another type of income is cap, what's called capital gains. This is money you earn when you sell investment like stocks. That's called capital gains. It's also taxed differently from your earned income. And lastly, there's a type of income called royalties or licensing where you create a product, you have an idea, some sort of process, and you let someone else use it and they pay you a small fee every time they do so. In going over all these types of incomes, I'm just wondering how many of these different categories do you have in your life? I would say that most of us have at least earned income. Some of us might have some dividend type income, we own some stocks. Hopefully many of us have some sort of rental income that comes in some capital gains over time that come in when you, when you sell some of your stock portfolio, whatever it might be. I've also personally worked hard to create business income as well as interest income. Where my money is out there working for me. Yeah, out there is debt collecting income and interest. I'll say the one thing I am missing right now are the royalties and licensing, but maybe that will come too. So how about you? If you're listening to this, whether it's at home, wherever it might be, try to take inventory of your different types of income. Do you have multiple streams so that if one ends up drying up, that you have others to take over to help you hedge against when things go poorly. Right. Or when things change or your situation changes, especially at your job? I will say that in this time, with so much uncertainty out there, with everyone thinking that we're at a certain place in the cycle with the stock market, perhaps the real estate market, things can obviously change on a dime. We've seen it happen over the last couple years. I really tried to go as broad as possible with my investments, with my income, with my streams of income, because I have no idea what is going to dry up, what's going to do well, what's not going to do well. I think the only way to actually create true security is by having that diversification. And I believe that having all these multiple streams of income, it's been totally invaluable to me. Now I know I can go deeper into some of these. Maybe I've done better over time, but ultimately I feel better at the end of the day because it provides a security for me and it allows me to live the life that I want. I know that I don't have all my eggs in one basket. I have a hedge against whatever the future might throw at me and it's something that helps me sleep at night and it's something that I can really help control the life that I want to live. So I'd love to hear from you. Let us know how many sources of income do you have? Do you have at least seven? Do you have 13? Do you have 15? Whatever it might be, let us know however you might categorize them, let us know what kind of income you have, how many you have. We love to hear about these things, especially on our Facebook group or on our blog, on our website or in the show notes there. You can comment below. So let us know. And of course, we'd love to know how we can continue to support you. Hope you have an amazing week and let's talk again soon. Thanks. Enjoy the show. Let me know by dropping a review in the podcast app you're listening to us in. And if you haven't already, make sure to hit subscribe. Are you a part of our community yet? Join thousands of physicians who are also on this journey to creating their own, their ideal lives through multiple streams of income. You can join us on our Facebook group Passive Income Docs and you can always learn more at our website, passiveincomemd. Com. Thanks again for allowing me to be a part of your journey. See you next time.