How Many Streams of Income Should You Have?

3 big benefits of having multiple income streams

Now that we’ve gone over some of the most popular types of passive income, let’s take a look at some of the top benefits of having multiple streams of income:

1. You’re not dependent on one source of money

If you lose your job today, how would you pay your bills? Would you be able to cover rent, groceries, and other essential expenses?

As we mentioned earlier, millions of Americans are one missed paycheck away from a financial crisis.

This is why it’s so important to have multiple sources of income – you never know when one source may run dry, but you can always rely on the others to help keep you afloat.

2. You give yourself more freedom and flexibility

Another major advantage of having multiple income streams is that it gives you more freedom and flexibility in your life.

For instance, you won’t need to choose between attending your child’s soccer game or putting in overtime at work. You can also take more vacations to destress and care for yourself without having to worry about paying your bills.

3. You can chase your dreams

What’s your ultimate dream in life? Is it to travel the world, start your own business, or spend more time with family and friends?

Whatever it is, you need money to make those dreams a reality.

Having multiple streams of passive income allows you to do just that – pursue your passions and live life on your own terms.


Profit Income

By selling a service or product for more than they cost, you use the basis of profit income. You could open a retail store and sell products, offer professional services and charge for your time, or combine the two.

It is one of the hardest steps to move from earned income to profit income, but it is the dream of many employees. Becoming self-employed or an entrepreneur can be a difficult road, and there are risks. 

4. Royalties and licensing

This category is a little less common but essential. If you have the opportunity to create a product, idea or process, you can sometimes license it out and collect a fee every time they use it.

Royalties can be on anything — you might even start a band and manage to get your songs on one of the streaming platforms. Or you might create a YouTube channel and earn somewhat passive income from views.

Royalty and licensing streams of income are fantastic, because they typically are consistent. Suppose you invent a new waffle iron, for example, and a company buys that design. You will profit from every iron sold. In that case, you can expect a reasonably solid income stream for the foreseeable future!

2. Investment income

Another common type of passive income stream that will grow your wealth is to have investment income. Syndications are investments, but this category is more generic, including dividends from equities and bonds. Many millionaires have CDs, participate in P2P lending and own shares in a stock like McDonald’s, which pays regular dividends.

These investments will not pay life-changing money, but as you grow your wealth, the stock market is a fantastic place to park your money safely while it grows and earns quarterly or monthly income. The key to wealth-building is diversification, and making income-generating equity or bond investments will help you achieve that goal!

Related: Escaping the Nine-To-Five Grind: How to Generate Passive Income Streams

Benefits of Having 7 Streams of Income

Seven streams of income or multiple income streams help reduce the pressure on you to have enough money to reach your financial goals. Whether you want to be a millionaire or just want financial peace, having multiple streams of income help you achieve your goal while still being able to enjoy life.

You won’t have to rely on your earned income to get you through financial emergencies, forcing you to choose between paying your bills or taking care of the emergency. You also won’t have to worry about draining retirement savings or other money set aside for other instances just to get by.

With 7 streams of income, you have a much higher chance of building wealth and reaching your financial goals. You’ll think outside the box, take chances, and reap the rewards from doing so.

When you get caught in the mindset of the 9 to 5 rat race and only focus on that, you miss many opportunities around you to generate income, have capital gains, and even invest in the stock market to see much greater rewards than you’d get focusing solely on your job.

Read more about Wealth Accumulation in our complete guide to building wealth.

How do you accumulate wealth?

Here’s the next key to the puzzle.

The key to accumulating wealth is uncomplicated:

  1. Sell your time for money,
  2. Spend less than you earn,
  3. Invest your savings so it will grow without your active intervention.

That’s it. It’s a simple input and output problem. And it’s also what separates the rich and the wealthy.

There is just one constraint on the whole system — your time in this world.

You have just 2.21 billion heartbeats. At 60 beats per minute, that’s a little over 70 years. Each beat matters.

There’s another constraint, and here is where wealth inequality rears some of its ugly head, and it’s known as Maslow’s Hierarchy of Needs.

You need to eat. You need a place to sleep. And both of those, and other needs, require money.

So in an ideal world, you could take your time to build a massively successful business (or maybe a few failures before the massive success), but in the real world, you need a job that will pay you now so you can feed yourself, clothe yourself, and secure a place to sleep.

I call it financial gravity.

If you want to really start tracking your finances, and I mean not just your spending but your investing (that’s where wealth is built), give Personal Capital a look. It’s a cornerstone of my financial system and I think you owe yourself a look. 100% free too.

How Many Income Streams SHOULD You Have?

The more income streams, the better, but not to the point you are running yourself ragged. Millionaires typically have at least seven different income streams.

But no one goes from having one income stream and then the next day having seven. It takes time to build up seven income streams.

You may find that for your goals, four or five income streams is enough, or you may want more than seven. There is no one right answer for how many income streams you should have; the best answer is that you should have more than one. Why?

Because, “52% of Americans could not cover an emergency expense of $400 without selling something or borrowing money. (” That’s pretty crazy.

But a digital product selling on auto pilot could potentially cover that, letting you relax a bit. 

Dividend Income

When you buy shares in a company, you become part-owner of that company and entitled to dividend payments. Well-timed investments in companies can generate excellent passive income streams.

My 7 streams of income (updated 2021)

Now that I’ve explained how I view building streams of income and my personal story, I’ll share with you my 7+.

Private Businesses

I run several online businesses now (all it takes to start one is a domain, hosting, and maybe incorporation). There are two notable ones. The first is a meal plan membership site called $5 Meal Plan that I co-founded with Erin Chase of $5 Dinners. The second is the umbrella of blogs I run, including this one and Scotch Addict. They pay me ordinary income as well as qualified distributions since I’m a partner.

Stock Market

The bulk of my investment assets are in what we consider the “stock market,” mostly in a variety of Vanguard Index funds. I am paid interest, ordinary and qualified dividends, and will eventually be sold for capital gains. I also have some private placements that are debt and equity instruments which so far just result in interest.

To give you a sense of scale, 80% of our investable assets are in the stock market.

Does the Average Millionaire Have 7 Streams of Income?

Most millionaires do have 7 streams of income. They built their wealth while they earned money. Their earned income covers the bills and the cost of living, while all other income streams help increase their wealth and allow them to become financially independent.

Why Multiple Income Streams is Crucial

If you’re like most people, you probably have one primary source of income. And while there’s nothing wrong with that, relying on a single stream of income can be risky.

For example, what would happen if you lost your job or your primary source of income dried up?  Many experienced this during the pandemic with job loss and furloughs.

That’s why it’s important to have multiple streams of income. This way, if one stream dries up, you’ll still have others to fall back on.

Richard Corley, author of “Rich Habits: The Daily Success Habits of Wealthy Individuals.”, analyzed IRS data and found that 75% of millionaires have more than one income stream.

And it turns out that this is a strategy that many millionaires use. In fact, according to the IRS, the average millionaire has 7 streams of income!

Let’s take a closer look at the 7 most common sources of income for millionaires.

Creating Multiple Income Streams

The point is that you can diversify your income in various ways.  You can basically choose one of each from the categories above, and create a very diversified income portfolio.

The other point is that it is pretty easy to get started.  You don’t need to be super rich, and you don’t need a lot of time to get started.  To say it requires no time would be a lie, but you don’t need to make anything listed above your life.  You can work at your job, invest your excess income, save to buy a rental property or rent out a room in your current house, and you start a side job online without breaking a sweat.

The reward from these activities will be financial freedom!

Secondary Salary/Spouse’s Salary

No matter what venture you undertake in life, you need a team.  I’m a firm believer in team work, even if it is just to bounce ideas off of, or to have someone tell you that you are off track.  For many individuals, this person is their spouse, who also brings some income diversity to the table.  Just like I mentioned above, if your spouse has income, try to maximize it.

I would throw in some caution here: if your spouse works at the same company, or in the same industry as you, you are not diversified, and should something happen, you could be in a world of hurt.  Companies do go out of business, companies do lay employees off.  There is nothing wrong with working together, but realize that you are not diversified and you should be trying to maximize other income streams as a result.

Which passive income source is best?

The question of which passive income source is best depends on several factors, but some of the most important include the amount of money you have to invest, the total opportunity size, your interest and ability in the area, the amount of time you need to invest and the potential to succeed. Typically, the lower the barriers to entry, the more crowded the field of competitors and the lower likelihood of success.

So you’ll need to weigh the opportunity against these factors and see which passive income strategy works best for you. But it can be helpful to have natural ability and an interest in your target area, because these can help motivate you in the early days when things are likely to be tougher.

There are passive income opportunities for people who are starting out with some money and even those who have no money to start.

How can I make passive income with no money?

If you have little or no money to start, you’ll have to rely mostly on your own time investment to power you through, at least until you build up a little money. That means focusing on passive income sources that take advantage of the following traits:

  • An area where you’re an expert. Here you can build your expertise out into a useful product or service for consumers, e.g. design, software coding and others.
  • An upfront work-heavy opportunity. You’ll need an opportunity that requires a time or work investment, such as creating a course, building out an influencer profile or other options.

In effect, you’re substituting your time for your lack of capital, until you can get enough capital to expand your set of opportunities.

How can I make passive income with money?

Money can provide you with more passive investment opportunities. If you have money to invest in a passive opportunity, you have not only the opportunity set above but a new range, too. Money is a prerequisite for taking advantage of the following passive income areas:

  • Investing in dividend stocks or REITs. Investing in stocks means you need money upfront, but you’ll receive some of the most passive forms of income around.
  • Save with bonds or CDs. Other purely passive activities include buying bonds or CDs.

Here you can use your money to make money with little or no effort on your part, if that’s what you’d like to do. Of course, you could pair your money with a lot of time investment to move into an even more lucrative niche, too.

How I Created Multiple Streams of Income

My foray into multi-level marketing was embarrassing but also valuable in terms of life lessons I learned. I became a financial advisor shortly after that, mostly because I felt the career met my main criteria for helping people and creating an impact. However, it wasn’t always easy.

#1: Becoming a Financial Advisor

During my first year as a financial advisor, I got a small base salary. After that, it was up to me to figure out how to find and retain new clients. Fortunately, I quickly learned how to market myself, meet new people, and set myself up for success. And over time, I made the connections I needed to grow my base of clients, earn a real income, and produce the type of results my clients wanted.

Anyone who is self-employed knows how hard it is to get out there and “eat what you kill. “I did have a big firm backing me so that definitely helped, but it was still up to me to go out and find new clients.

And really, this is why financial advisors have one of the largest failure rates of any profession. Meeting people and acquiring new clients is hard – especially when you’re first starting out.

#2: My Life Insurance Website

In addition to my financial practice and this website, I’ve cultivated other income streams over the years. One example is where, until recently, I earned a side income while helping people choose the right insurance for their needs.

A lot of people don’t even know about my life insurance business, but it’s a huge part of my success. Like my other big projects, however, I started it to help people. Over the years, I’ve seen so many people who are uninsured or underinsured. For whatever reason, they don’t understand the importance of life insurance. Worse, they don’t understand how affordable it is for the average family.

A lot of people also dramatically underestimate their needs. They think a $250,000 term policy is enough to cover their family. Heck, some people think $50,000 is enough when really, they should have a whole lot more because they have a high income or a lot of debt.

Unfortunately, it can be financially devastating when a spouse – and especially a primary breadwinner – loses their life while their family is still young. was created to help people realize just how much coverage they need, then to steer them toward companies that offer quality life insurance policies for a price they can afford.

#3: Investing

When it comes to earning extra income, let’s not forget about the most obvious income stream I have – investing. While everyone who invests for extra income does it differently, most people rely on mutual funds, ETFs, or dividend investing.

As for me, I love investing in lending marketplaces like Lending Club and Prosper. Each of these provides side income in the form of dividends, interest, and even capital gains paid out at the end of the year.

While investing for side income can work out well, most of my personal investments are tied up in our retirement accounts.

For starters, I have a 401(k) through my business. I also have a Roth IRA, although I can’t add to it anymore due to income requirements. I also have taxable investment accounts, but I would much rather invest via our retirement accounts to avoid paying extra income taxes whenever possible.

#4: Media Deals

My sixth income stream is one I just added two years ago – scoring awesome media deals. This is something I never really imagined happening years ago, but works out rather well today.

And really, media deals are a great fit. I already love doing YouTube videos and interviews and putting myself out there. With media deals, I can use my video skills and personality to represent big financial brands and help them market their products.

As long as it’s something I believe in and s

As long as it’s something I believe in and support, it’s a win-win. Companies I’ve been approached by in the last two years include John Hancock, Credit Karma, Discover, Capital One, MasterCard, and GM, just to name a few. It’s been so fun helping these awesome companies create their own marketing plans, whether through video or other online media.

Last year was my best year ever in terms of media deals, but it looks like I have a few locked up for 2022 already. Considering one of them might pay me more than I earned last year, I’m stoked!

But the important thing to remember here is that it all started with this blog. I didn’t really know what I was doing when I started, but I kept plugging away.

Over time, all the YouTube videos I made taught me how to present myself better on screen. I didn’t know how it would pay off at the time, but I’m so glad I followed my instincts and kept going anyway.

#5: Creating a Course

Last year, I also launched an online course for financial advisors – The Online Advisor Growth Formula. Last year alone, this resource brought in more than $100,000 in revenue. I’m especially proud of this accomplishment because it took me a few years to build up the courage to get started.

Fortunately, a good friend helped me hone in on the idea for my course a few years ago. I wasn’t sure what I should create a course on, but he reminded me that a ton of financial advisors struggle to market themselves online. Right away, I knew it was true.

Why? Because so many financial advisors have talke

Why? Because so many financial advisors have talked to me over the years and many have asked if they could pay me for consulting. Why not create a course they could buy instead?

So, that’s exactly what I did. I created video tutorials showing advisors how to market their businesses online, then formatted them into a single course financial advisors could purchase. And guess what; it worked!

The bottom line is, it’s smart to have multiple income streams no matter who you are. Why? Because the more ways you can earn money without compromising your integrity, the better off you’ll be. And if you’re self-employed, having multiple income streams is almost essential. Not only will you enjoy a higher income, but you won’t go broke if one stream ends out of the blue.

If you want to create your own course, you can setup a free account at I’ve used them to create all of my courses and love them!

In Summary

Passive income streams can provide a boost to your savings, investing goals, and an unexpected job loss. Who wouldn’t want to earn money without having to clock in for an eight-hour workday?  

The good news is that there are many options to start building out a passive income stream beyond what I’ve already outlined above. Most will require upfront time and energy devoted to building them out before you start to see returns. 

Explore these ideas, and you could be well on your way to make money while you sleep in no time.

This story has been edited and revised. Its original version contained portions that did not meet our editorial standards.

How much time self-made millionaires devote to new income streams

If you have a consuming 9-to-5 job and/or other sorts of commitments at home and at work, carving out the time to devote to starting another income stream might seem daunting. Based on what I've learned from my research, you can start small:Set aside no more than five hours each week and begin slowly building something new. 

If you're not sure where to start, think about the subjects, skills, and activities you are most passionate about, and explore the ways that you could monetize one of those

In my research, other than consistent saving and investing, passion was by far one of the most important shared attributes of the self-made millionaires in my study. 

VIDEO 2:45 02:45 Barbara Corcoran: How your hobby can become a side hustleEarning

Video by Stephen Parkhurst

The Benefits of Having 7 Income Streams

Multiple streams of income reduce reliance on one source

This means that even if one route dries up, your income is spread through so many sources that it should not have a significant impact on your finances. For example, if your tenant can’t afford to pay rent for 1 month. 

Helps you stop living paycheck to paycheck

Building multiple income sources means you can have money coming in all the time. Instead of relying on your income from one month to the next, you can accelerate your budget and savings plans in order to reach financial independence.

Passive income can reduce your working hours

When you are no longer dependent on putting in more hours for more pay, you can spend time genuinely and on what you want. This ultimately means more time for family, friends, and your favorite hobbies, while your earning potential is unharmed. 

You have the chance to turn your side hustle into a concrete business

Have you ever noticed that most entrepreneurs have experience with more than one business? It’s because they have the financial stability that provides time to explore other options. It means many of them to follow their passions in order to solve real-world problems.