You have to view your total earning capacity in terms of streams. Your job produces income. Your job is just one stream. The key to boosting your savings and eventually living the life you deserve is to generate as many different income streams as possible. Each of these streams adds to your bottom line.
The more cash you have in your bottom line, the more assets you can buy. The more assets you buy, the more income streams you get. If you play your cards right, and you take the right risks, the amount of income streams you have can grow quickly. Eventually, your income from your job will be outweighed by the income from different income streams.
Eventually, you will have enough non-job income so you will be free to quit your day job. As appealing as all this may seem at first brush, you have to keep the following tips in mind. You have to create different income streams but there are certain issues you need to be mindful of or else your efforts at boosting your income might put you in a worse place than where you started.
Save to buy assets
As much as possible, don’t borrow money to buy assets. At least, don’t engage in leverage at the early stages of your efforts at diversifying and building up your income streams. You don’t want to get buried in debt when your cash flow can’t support the debt. Don’t just rely on your job. Too many things beyond your control can happen at your job. Instead, keep saving until you can buy assets. Buy assets that generate income. Keep saving until you can buy more assets.
Not all assets are the same
There is a lot of difference between asset classes. Just because something generates income doesn’t mean that it is the asset for you. Instead, you have to consider assets based on the management level that is required. You also have to check how much benefit you will get in light of how much you have to pay for the asset. As much as possible, look for assets that produce lots of benefit for as little cost as possible. You also have to check into how much knowledge you need to properly manage the assets. Pick assets you already know or you can easily build up knowledge for the asset.
Focus on management
When you have set up some income streams, you have to focus on managing them. This is the M word that many would-be entrepreneurs are scared of. But the good news is that managing is all about being aware about what is going on with your assets and having the energy and inclination to spot problems before they appear. Be proactive. Have a system. These are the keys to effective management.