With the recent economic crash felt ‘round the world, it’s never been more important to diversify. You need to introduce multiple streams of income… In other words, diversify your income streams… your investments… your businesses… It’s just how business is going to operate in the new decade.

You’ve got to have a number of ways to bring in money or you’re going to be left holding the bag one of these days.

Several years ago, the phrase “Multiple Streams of Income” gained significant popularity through seminars, events, and tele-trainings. The company essentially taught that there were 4 ways to make money:

1. Real Estate Investing;
2. Infopreneuring;
3. Internet Marketing; and
4. Investing in the Stock Market

The concept was good on the surface, but when it actually came to execution, it was impractical at best. The “idea” of having multiple ways to generate income – to not put all your eggs in one basket – was smart. But, as you probably know, 3% of all people actually take any action whatsoever on ONE thing, let alone 4 different streams of income.

People trying to generate multiple streams of income got information overload, became seminar “Junkies” and then went on to complain later on that they’d spent tens of thousands of dollars and had absolutely nothing to show for it.

Sure, you can easily argue that no one forced them to spend the money on the trainings, and you’d be absolutely correct. I do believe, though, that the intentions were sound and that these people fully intended to implement – maybe even TRIED to implement many of the programs that now had on their shelves collecting dust!

So where did the breakdown occur?

At the root…

You see, most people that are looking for ways to make money, new business ideas, etc. have jobs or have existing businesses that they have to continue to focus on to keep food on the table. And studies show that you cannot effectively focus on more than one thing at any given time… let alone 5!

The other problem is that when you’re learning something new or building a new business, there are challenges. There are setbacks and failures. And there are things that test you. When you have “multiple” things to jump to, it’s much easier to quit when things don’t seem to go right!

Again, it’s not your fault… it’s human nature.

It is VERY difficult to learn the ins and outs of investing in the stock market WHILE you’re trying to learn how to evaluate rental properties and negotiate triple net leases!

So… how does anyone actually achieve multiple streams of income?

There are 2 schools of thought:

1. CISAD (Create – Implement – Systematize – Automate – Duplicate)
2. Integrate

The first method is obvious, but there’s a minor flaw with it and it’s that it can take a long time to get an entire business on autopilot and automate it enough to turn over the reigns – at least if it’s a successful business!

This can work well if you have a time, but if you’re a solo-preneur or have just a small team, it can be very difficult. Let’s look at how this might work in real estate by looking at a case study.

This method works VERY well for people that are great at executing… doing the actual work!

Entrepreneur Bob decides that he wants to invest in real estate. He needs to generate some income quickly, so he decides to get started wholesaling real estate.

He chooses a niche on which to focus to find motivated sellers that are likely to have a lot of equity and begins marketing to them. It takes him 72 days to get his first “real” wholesale deal under contract (meaning that he has a deal that actually has enough equity to assign the contract and still make a healthy profit).

He winds up making $10,000 on his first deal. He pays himself back $1200 for the money he’s invested personally and reinvests half of what’s left ($4400) into his real estate investing BUSINESS.

NOTE: He is treating his real estate investing as a BUSINESS. This is a critical distinction.

By doing this, he is able to start growing a business instead of a one-man show.

He brings in some help to send out direct mail and take care of administrative duties. He invests in a training course on copywriting and marketing so he can increase his response rate and he sets his goals.

It eventually takes him 6 months to put his entire system in place, get it running to a point where he only has to check in and make sure the system is running. He personally doesn’t have to field calls, write contracts, market for sellers, handle the closing, etc.

He’s now got a business that’s doing 2-3 wholesale deals a month at $5-10,000 each. He has built a wholesaling BUSINESS.

Now, he wants to add an additional stream of income. He now focuses the majority of HIS efforts on building the next: residual income.

And so the cycle continues. He builds one stream so that it is running on it’s own, brings in enough money to pay for the staff that he needs to keep it going, and then turns his focus to the next.

This is a very logical step and is perfect for people that are good at committing, following through and focusing on a single thing for a long period of time. There are two important keys to this:

1. You MUST treat every aspect of your business as a business. You must THINK like a CEO of a Fortune 500 company.
2. You MUST build systems from the get-go. And I know there are lots of homestudy courses that come with “complete systems”, but these are someone else’s systems. You MUST create your OWN systems (which can certainly be largely based on someone else’s).

Now… the 2nd school of thought is the “Integrated” Streams of Income.

This is where you’re building multiple streams of income concurrently.

You’re probably thinking, “Wait a minute! Didn’t she just say to focus on ONE thing at a time?”

Yes, you are correct, and that is the ideal way to do it for many people, but there is also a huge segment of the population that either (1) doesn’t know WHAT they really want to do and need to sample several things or (2) doesn’t have the attention span to focus on a single thing for a long period of time.

These people are generally good at coming up with ideas, but not always great at executing. They often get bored before all the systems are implemented, though they are often GREAT at coming up with the systems that need to be implemented!

So how does this model work?

Think more of a “wheel” than a straight linear process to building your business.

At the center of the spokes is the hub. The “hub” is your core business (i.e. Real Estate). All of the spokes that come out from the hub are different streams of income.

Keep in mind, even though we’re creating multiple streams of income all at once, you still can’t focus on more than one thing at a time, so it’s important to determine how much time you have to focus on your business and then break up the time accordingly. When you’re just getting started, you may only have the time to focus on 1-2 spokes at any given time.

Now, which spokes relate to your business depends on you!

With this model, you’re looking at the big picture and determining which aspects can be built in as you get up and running.

Let’s, again, look at this through an example.

Sarah Entrepreneur decides that she wants to build a business around real estate. She ultimately decides that she wants to get into the probate market. So, she take some time to research everything that goes into the process and all the possible streams of income that she can create while helping these sellers.

She brainstorms and writes down a huge list of about 25 different potential streams of income.

Here’s some of what she comes up with:

Wholesaling Buy-Fix-Sell Notes Lease Options Lead Generation Realtor® Commissions Mortgage Fees for Buyers Information Products Coaching

Liquidation Options Auctions Inheritance Funding Cleanout Services Property Management Renovations Antiques Etc.

Then, she ranks each of these according to 4 criteria:

1. Learning Curve to be able to execute
2. Cost to get started
3. How long to make her first dollar
4. Preference/Interest

Knowing that she only has 10 hours each week to devote to her new business, she chooses the top 4. (Each category is ranked on a scale of 1-5 and the highest score is number 1. The lowest score is the last. If there is a tie, choose the one that makes you the money fastest or you have more interest in).
So, she decides based on her scoring, that she’s going to start building her probate business around:

• Wholesaling;
• Liquidation;
• Lead Generation; and
• Information Products

So, to get started Sarah decides to execute a direct mail campaign. At that same time, she builds a website for credibility and lead generation. (She gets one created for about $300 using 99Designs.com and Rentacoder.com).

She gets in touch with local auction houses and enlists her teenage daughter to help with eBay so she’s ready when the opportunity presents itself.

It takes her about 10 hours to get everything put together and get her first batch of letters out the door.

At the same time, she’s gone ahead and found an attorney, a CPA, a family psychologist, and several other professionals to help her create a program for families dealing with the sensitive issue of probate. She pays them for an hour each of their time and gets a release to use the interview.

She puts the program online and markets it to people all over the country. She even sells the program on Amazon.com. Since probate leads are often not as quick to come in as other types of leads, she has some down time to focus on this. And since online marketing is new to her, it takes her about 40 hours from start to finish to get this piece of the puzzle.

She uses this to build credibility and to market leads to investors, attorneys and real estate agents across the country in areas that she’s not actively investing or is not interested in investing in.

As she builds her business and gets systems for each of these streams, she integrates another stream of income into her business and duplicates the process over and over again.

She could essentially take this entire MODEL and duplicate it for niche after niche after niche, although the spokes would be slightly different for all of the different niches.

This is how big companies grow. If you look at Apple or Microsoft, for example, they have a core business at the center, and they have dozens of different income streams that come out from hub: Hardware (Computers, Ipods, Phones, Software, Operating Systems, Etc.).

Neither of these two models is right or wrong. It simply depends on which you are most drawn to and which you are most likely to stick with. The common thread, however, is that you are focusing on one core business. You’re not focusing on writing ebooks and creating a membership site about Sugar Gliders while trying to become an expert real estate investor while putting all of your profits into the stock market. It just doesn’t make sense because you never truly become the expert at any given thing.

The Lesson:

Take some time to figure out what you REALLY want to do, what you REALLY want to focus on in your business and start there. The possibilities are endless, but you MUST START with a clear focus on what you want to actually build as a business for yourself.

And to ultimately be successful and achieve financial freedom, it is imperative that you treat your business as a business from the very beginning.