As financial expert Steve Siebold wrote, “Like most things in life, becoming good at attracting money is no different than becoming good at anything else, be it being a sub-par golfer, losing weight or mastering a second language”.
When I graduated from college in 2017, it had been instilled in my mind that wealth was developed in two ways; salary and savings. My goal was to climb the corporate ladder, live with a lean overhead, and put a percentage of each paycheck into a savings account. While it may build average returns over time, I quickly learned that this one-track mindset is a slow path to financial prosperity.
There’s a far more effective, secure, and rewarding strategy that self-made millionaires follow to build wealth.
How The Rich Get Richer
In early March, I moved to Washington DC for a new job right. Luckily, I was able to remain with the company as the COVID-19 pandemic really took off. But there was a two-week gap before my first paycheck where I needed money for various loans and payments.
Instead of dipping into my savings, I had several sources of income to act as a financial cushion. Freelancing paid for my groceries. The Medium Partner Program paid my car loan. A Cash Reserve account was able to cover my rent.
When I did receive my paycheck, 95% of it was split between an interest-bearing savings account and a general investing account.
Here’s the lesson; relying on a single revenue stream is dangerous.
Companies go out of business.
Salaries get cut.
Real wealth is built by diversifying your portfolio to maintain multiple revenue streams. When you boil it down, income streams are about security. The more you have, the more secure your finances are.
Wondering where to begin? I’ll tell you.
Start By Adding Symbiotic Flows
“My video guy does advertising for me — and after proving himself, he started making advertisements for those connected to me. He didn’t start a doughnut shop.”- Grant Cardone
If you only have a single source of revenue, don’t panic. That’s where everyone starts out. Throwing a bunch of money into a Robinhood account or furiously typing up an ebook isn’t the answer.
Instead of trying to build random revenue streams that you barely understand, simplify your goal to get the ball rolling. Turn to something that interests you and can also work cohesively with your current income — then build from there.
The second revenue stream I added in 2017 was freelance writing. I had been working full-time as a marketer and unlocked a skill for creative writing. It took months of trial and error before I really grasped how freelance writing worked, where to find clients, and which platforms offered a solid profit for my time.
Most importantly, writing is a side-hustle that I am passionate about. I didn’t mind the learning curve because I love the art and science that goes into written work. I could afford to be patient.
“Your flows must work together to make each flow stronger.”
Writing on the side made me better at my job and eventually led to my first promotion. Marketing helped me build a personal brand, portfolio, and taught me how to become a better writer. I can leverage my years of marketing experience to prospective freelance clients because I understand the way content works. I can leverage my years of writing experience in my marketing career because every team needs a good writer.
As one grows stronger the other grows with it. If one fails, I have the other to lean on.
Building wealth is a mindset shift. Work smarter to create a symbiotic relationship that drives growth across your income streams instead of putting all of your eggs in one basket.
The Secret Is Combining Active And Passive Revenue Streams
“If you have built castles in the air, your work need not be lost; that is where they should be. Now put the foundations under them.”- Henry David Thoreau
Once you have established two or three income streams, it’s time to push for more.
In combining both active income like your salary, freelancing, and other hands-on work with passive income that requires far less routine effort, you will be increasing your wealth around the clock. Eventually, you can stop trading time for money and make more by doing less.
Here’s how my income is currently broken down:
1. Full-Time Salary: Active
I work for a creative and strategy agency in Silver Spring, Maryland, where I receive a paycheck every two weeks. All of my other revenue streams revolve around this one, but each can stand on its own if needed.
2. Freelance Writing: Active
Freelance writing accounts for an inconsistent percentage of my income depending on how much spare time I have. However, it is still valuable in covering accessory expenses and can bring in four-figure monthly revenue.
3. Medium Partner Program: Active/Passive
I consider Medium active and passive income because I still have to write more to make more but receive royalties on previous stories. Medium is used almost exclusively to pay off debt, most recently helping me finish a car loan over one year early. On months where I have extra Medium earnings, I put it into a savings account. And to anyone who doesn’t believe Medium counts as a revenue stream, read this.
4. Low-Risk Investments (80%): Active/Passive
I currently have a Betterment account which I use for General Investing and Cash Reserve interest. Each of these accounts receives an automated monthly payment and then a lump deposit in months that I have excess earnings. This isn’t an overnight “get rich quick” opportunity but a long-term investment in my future.
5. High-Risk Investments (20%): Active/Passive
I use Robinhood for the rest of my investing, which is basically extra income to play around with. If you plan on investing with a platform like Robinhood, set hard limits with money that you can afford to lose. I recommend waiting until you hit a very specific savings goal before making high-risk investments. New investors should read “The Intelligent Investor” by Benjamin Graham to establish a solid framework for making intelligent decisions in the stock market.
6. Savings Interest: Passive
I have several accounts that accrue interest including an HSA, Roth IRA, Cash Reserve, and General Savings account. Besides the HSA, I don’t withdraw any money from these accounts unless I have an emergency.
7. Product: Active/Passive
This is still in the process of being created, and I envision it requiring a lot of upfront work that can eventually bring in passive revenue once it has launched and been properly marketed. It always helps to have several half-baked ideas in the oven. Think about an online course, a Substack newsletter, or Affiliate Marketing Programs.
On their own, these income streams are ordinary. When combined, they elevate me to a different level of financial success and security.
Punching a time clock for a paycheck is comfortable, and there’s nothing wrong with that. But making real money requires the pursuit of discomfort, education, and some risk.
Just remember, this process won’t happen overnight.
Start with one additional revenue stream and keep building from there. Find different ways to make money that connect to each other and spark a little excitement in your day.
Give some of your extra revenue back to the community.
Tell others what you learn along the way.
Earning more money is about improving the human experience as much as it is about bulking up your bank account.
Then, when you hit a point where your side earnings match your salary, life will never feel the same.