Luxury is Multiple Streams of Income

Water Cycle Parallels to Wealth

You are probably familiar with the water cycle; collection, evaporation, condensation and precipitation. In nature, this means streams, rivers and lakes; heat and transpiration; clouds and rain or snow fall. Water is an entity that is constantly in motion, even beneath a seemingly still surface.

The water collection system represents our income. There may be one of many sources (streams, rivers, lakes) in your personal financial ecosystem. There are many other collections, or streams, that are not in your system but could be. The main flow in this system is your primary cash-flow generating system. This could be a career, day job, independent contract, or business that you own. Let's assume you already have a primary stream of income.

Evaporation represents your expenses and investments. Expenses include things like taxes, room and board, family and household needs and consumer expenses. Investments are deposits into your retirement accounts, savings and brokerage accounts. An expense is the unseen disappearance of your income or capital (evaporation) for collection in another system. This may benefit government coffers, banks if you are paying interest, utility companies, food producers or those ubiquitous purveyors of fun, fashion and frivolity. Evaporation could benefit you, however. Investments also invisibly remove money from your stream but they support other processes that put money back into your own collection system.

Who doesn't love a good storm? Gathering clouds in the distance, the strength or nature revealed. Who looks at those clouds and thinks, this is exactly as I intended. I love the rain. Investments allow your money to slow and cool and gather strength and might. Condensation is where your money droplets attract other money droplets and they all hang out together and grow by attracting more. Condensation is building or buying into assets. Condensation happens slowly, like evaporation, almost imperceptibly, until the system collapses under its own weight.

The weight of condensed money shows up a precipitation. Clouds collapse to create rain, which then falls back into your collection system as passive income. This affords us additional funds to purchase assets and take advantage of opportunities. This type of rain also shelters us from the downsides of 'rainy days', where we have unexpected expenses. Owning assets and having additional cash flow available gives us options.

The water cycle is a great model to help us think about our money as the many parallels illustrate ways to think about managing our money. The goal is to align several of the multiple streams available into our own wealth cycle.  Today we will focus on increasing the number of streams in your system.

Building Multiple Streams

Keeping Guilds in mind, each action should support or protect our wealth, not detract from it. Thus, a side hustle that is not building additional skills, is not ideal. This includes most driving and delivery services and sign twirling. If you have no skills and no education then by all means, get out there and make that money. However, even without a formal education, you have a lot more to offer than you might think.

Tributaries in a collection system represent your sources of passive income. They could be side-hustles, interest, business income or royalties. Today we will focus on two of the easiest to achieve. Those are investment income and a side hustle. Investment income is an easy win and a side hustle provides us valuable business skills by capitalizing on our strengths and interests. It also provides a hedge against the loss of our primary stream of income. Let's get started.

Praxis One- Start Investing Today

Anyone can make money investing. All you have to do is invest. This will take less than fifteen minutes.

Set up a brokerage account at your selected financial institution. I use Vanguard, because of their low fees and range of index stocks. This is not a paid endorsement. Connect that brokerage account to your bank account, and buy an index fund. I assume you can find one hundred dollars in your monthly budget to invest. If you are serious about generating passive income, you will find more. The initial amount is less important than taking the first step.

Vanguard's VOO ticker symbol is an index fund that tracks the S&P500. That is, the five hundred top companies in the United States. Today, this is slanted heavily towards technology and communication. I am sure you can guess why that is. These companies dominate the landscape of profitable industry, all tied to your cell phone and computer.

If you receive a windfall, or bonus, stash that money and let it grow for you. If you have too much cash sitting in your savings account, that is, more than your sinking fund requires, stash that money and let it grow for you.

This Tool from Vanguard helps you visualize what your money could do.

https://investor.vanguard.com/tools-calculators/potential-growth-tool

The graphs reveal some very interesting data. They even capture the negative returns one would have seen if they had invested just before the covid pandemic (5- and 10-year graphs). The one year graph shows that if you had invested money in March of 2024, there was a dip that would have put your balance below the original investment but it quickly recovered to produce a positive return within the year. Barring complete devastation of the financial system, the stock and even bond markets produce positive returns as long as you don't lock in a loss.

Every dollar invested starts as a rivulet that will increase the size of the tributary.

Praxis Two - Develop a Secondary Stream of Income Today

Don't overthink this step, just choose something that appeals to you right now. It could be selling your excess stuff, offering your skills for sale, writing, selling your wares or developing an information product. You may be interested in buying a business, starting your own business or finding a second job that builds your skills while paying you. If it has to be a straight exchange of time for money, listen to audiobooks, podcasts or courses to build your skills and refine your mind.

Understanding does not come from thinking. Excellence is not attained without feedback. You obtain feedback by taking action so stay out of the weeds. Before you go hunting on the internet for information about how to get started in your occupation of choice. Take a few moments and a clean sheet of paper and then write down your idea for a secondary stream of income. Then write down at least three more ideas for income.

For each idea, answer the following questions:

What are the startup costs and required equipment?

This includes memberships to paid platforms, training, equipment, etc. Don't 'research' the cost online, just list every item you think of and estimate the cost.

What skills do I expect to obtain from this endeavour?

Even if you are cleaning houses on thumbtack, you will gain skills in time management, coordination and customer service. Take some time to brainstorm.

What is the expected remuneration (income) and time commitment?

Again, estimate.

What is my exposure to this market? Do I already have an inroad or is this a cold start?

Answer these four questions for each secondary stream you identified and then choose one stream to pursue.

The next step is to commit yourself to one of these. Today. In order to complete this task you need to have evidence of your action. That would be a hosted blog domain with an introductory post, an advert on a service platform, an inquiry or application sent to a potential employer. Starting a food truck is not what we are going for here, even if you love to cook and have the money. We are looking for a stream with a low barrier to entry and a low exit threshold. We just want to get our feet wet. Those of us who speak English and have an internet connection have an amazing advantage. Use it to your benefit.

In Conclusion

Take action today. The first step to building multiple streams of income is investing. It will double your money in time without any additional effort on your part. Secondly, start a side-hustle post-haste and shore up your finances while building real-world business and entrepreneurial skills. Control the time horizon and startup costs to meet your financial and timing needs and align them with your interests. Again, don't overthink it. The purpose is to show yourself that you can generate money through your own means and that you have options when it comes to how that happens.