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Millionaire Money Habits

October 23rd, 2008 at 11:44 am

Multiple Streams of Passive Income is Wrong

For years I listened to the advice of millionaire entrepreneurs as they drove home the idea that the key to becoming rich is to build multiple streams of passive income. I believe, though, that they are wrong.

The idea behind having multiple streams of income is that you produce a system that produces money. Once that system is in place, you move on and create another system. You might, for example, buy a rental property that has some positive cash flow. Then you open a Subway sandwich shop, hire employees, and get that running on autopilot . . . and so on.

By creating different income streams, you can live a safe, secure life knowing that everything is going to be okay. If one system fails, you can relax knowing there are ten others still bringing money in for you. Right?
This is where the multiple streams of income strategy falls apart.

If you want to live comfortably, with little headaches while your business bring in cash for you, then the last thing you want is multiple streams of income.

  • Why do you want to have an attorney for your real estate business and another one for your franchise business?
  • Why do you want to have 10 separate business cards for each of your 10 streams of income?
  • Why is it necessary to be a real estate guru and a sandwich guru?
  • Why do you want to do 10 different market research studies?

Creating multiple streams of income will only cause stress and headaches, and will not allow you to live the life of freedom that you desire.

Instead, the answer is to have channeled streams of income - all funneling into the same business. That way you can do what you do best and simplify your life.

Become the Subway guy instead and open multiple Subway shops. Whatever it is that you want to do to make money, stick to it and run with it. Don’t overcomplicate things by trying to get your hands in every business.

Would you rather be average at 10 different things, or the leader in one area of interest?

There will always be business opportunities and ways to produce income. But, if you want to truly live financially free you need to develop the ability to turn down opportunities that you know will make money, but overcomplicate your life.

With greater focus you will build the capacity to make more money and live more comfortably.

Millionaire Money Habit: Rather than trying to be all things at all times, focus on funneling your endeavors into one ultimate area of focus. You’ll have far greater success with focus and specialization.

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  • G.L.
    9:08 pm on October 23rd, 2008 1

    Interesting topic and a provocative headline, but methinks you’re a
    bit off. you presume that passive income streams stem only from
    businesses, and that’s the biggest flaw in your argument. What
    about dividends from your stocks? Income from your photos sold on
    professional sites? Royalty from your books and/or movies? Adsense
    income from your blog? And many, many others?

  • Ryan
    5:17 am on October 24th, 2008 2

    Hi G.L,

    Good points, and you’re absolutely right - this was in reference to the serial start-up pursuers or people that tend to stretch themselves without focus.


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