Are Multiple Income Streams Necessary for Becoming Wealthy?Rohit Bhargava June 27, 2016
Wealth is an illusive concept. Most Americans aspire to become wealthy on some level, but few actually understand the mechanisms that drive wealth attainment. After all, if there were a magic formula for becoming wealthy, everyone would live like the Kardashians. But the truth is, there is no magic formula. Becoming wealthy is a combination of tireless hard work, the motivation to never stop learning, and yes, even a bit of luck. But do you need multiple income streams? I’m afraid this one will have to be answered with a “no, but…”
The Road to Wealth
If you have read the mega-bestseller Rich Dad, Poor Dad, by Robert Kiyosaki, you have likely given some thought to the notion of building multiple income streams. Save money, invest in real estate, make wise investments…These are all worthwhile ventures to consider, but it’s important to note that many of the world’s most successful people built their empire on a single source of revenue. J.K. Rowling was destitute when she wrote her first Harry Potter novel, the creator of Flappy Bird earned $50,000 a day with a silly 99-cent app, and if you saw the recent hit film Joy, you know that Joy Mangano’s considerable wealth all started with just a mop and a dream.
These people (and countless others like them) didn’t build wealth from multiple angles, but they harnessed all of their energy into a single passion. That level of attention and dedication was undoubtedly instrumental in the success of their respective ventures. Joel Gross, the CEO of Coalition Technologies, often recounts how he was able to build his business from a bedroom hobby into a multi-million-dollar enterprise simply by focusing day and night on making the company the best it could be. There was simply no time to take on side gigs or explore risky investment opportunities. The danger of pursuing multiple streams of income is that it forces you to divide your effort, potentially diluting your effectiveness in any single enterprise.
The Benefits of Multiple Income Streams
With that said (remember, this is a “no, but…” scenario), there is definitely something to be said for diversifying your income, as long as the task can be undertaken in such a way that doesn’t force you to cut corners. For instance, many successful business owners have passive income streams on the side, which allows them to continually collect income for work already completed (like the publication of a book, or the completion of a few affiliate websites). If you are an entrepreneur with the capital and resources to delegate projects to others, it can definitely be advantageous to explore new opportunities. But if you have that kind of capital, it’s safe to assume that you’re already wealthy to some degree.
The benefit to having multiple income streams is that affords you the freedom to build wealth without putting all of your eggs in one basket. This can alleviate a lot of the pressure, and free your mind to focus more diligently on your most pressing passion. History has proven that you certainly can become wealthy with a single revenue source, but if you can successfully generate multiple streams of revenue, it can be hugely beneficial for both your bank account and your mental health.
About the Author
Rohit Bhargava is an LMS expert who has studied corporate training in the industry for over five years. He has had a hand in development and strategizing Learning Management Systems that make education easier for instructors, employees, and students.