The Magic of Multiple Streams of Income


I ran across something on the internet suggesting the average millionaire has an average of seven streams of income.  This is ridiculous and misleading suggesting some magic formula that if you have seven you will somehow be a millionaire.  The more important issue is to define what are the possible streams and how to grow them.

And it’s important that you get your information from someone who has done it rather than someone who writes about it.  There is no magical formula or some promise that if you have seven streams of income you will be rich.  If you have 70 streams of income and they all pay you $1 you aren’t rich.  Today I have north of 25 streams of  income I can depend on every month. Some of them require more attention, some I have to push on constantly, some I can grow and some I can not and some have limits as to how much they can grow and some have more risk than others.

Here are the possible streams of income made simple:


1. Earned Income – Salary  

Money earned for doing something. The money you are paid for your job whether it is working for someone else or even for yourself.  The problems with earned income is it’s taxable at the highest rate.  But this is where everyone starts and until you are super wealthy you will demand income.   Anyone that tells you the wealthy don’t like earned income is just a writer and not an earner.  Rich people still demand monster salaries to run companies, consult or sit on boards.  It is reported that Robert Iger CEO of Disney was paid between $33 million and $46 million in 2015 and has a net worth of over 100 million.   In your lifetime you will mostly be underpaid until and if you ever get truly great at something and then you will be overpaid.   This is the first and most overlooked key to building multiple streams of income and creating wealth.

2. Profit

Money earned by selling something for more than it costs you to make or sell. For e.g. Businesses selling their goods at a profit, whether at the retail or wholesale level, as distributors or manufacturers or as an affiliate.  Profit is also taxed but differently than income and why you want to be in business or have a side business if you can be.  But this is where you have to learn to grow the business (sell).  Almost two-thirds of all businesses break even or lose money because they don’t kn0w how to sell enough to make a profit.  This is why I created CardoneUniversity.

3. Interest Earned

Money earned as a result of putting your money in the bank or lending your money to someone else to use.   The lower risk is simply putting the money in the bank but you will only earn 1/2 of one percent.   The middle class was built on savings accounts that paid 8-10 even 12% interest. That doesn’t exist today so you have to take greater risk to get those returns.  Some suggest that you could lend your money out to individuals and businesses and this would be interest earned. To me this would no longer be considered interest earned. This would require marketing, promotion, sales and collection.  We have a number of debt companies that use CardoneUniversity to call and market their offering to small businesses and entrepreneurs in need of capital.

4. Dividend Income

Money that you are paid as a return on shares of a company you invest in. ATT stock pays a dividend of almost 5.5%. The stock trades for around $33 and hasn’t moved in almost three-year while it pays its investors $5.50 or one hundred dollars of invested in the companies stock.  This income is taxable at a much lower rate than earned income. It is assumed that the higher the dividend paid out by the company the higher the risk of the stock.

5. Rental Income

Money that you get as a result of renting out an asset that you have. This is where I have made most of my money and 90% of my net worth.  Buying property requires money for down payments (typically 1/3rd of the purchase price) and then you better pay attention to that business.   I started buying apartments when I 35 and today I own 4500 units that have an average rent of $900 to $1100 per month.  The game here is that the income exceeds all expenses, maintenance and debt allowing for a return on my cash invested.

6. Capital Gains

Money that you get as a result of increase in value of an asset, stock or company that you sell for a gain.   When you buy shares at $10 and sell them at $21 – the $11 is capital gains, or if you buy a house for $200,000, spend $40,000  and sell it for $340,000, the $100,000 is your capital gain and you pay taxes at a much lower rate.

7. Royalties

Money you get as a result of letting someone use your products, ideas, or processes. You are paid for someone else to use your idea.  The CardoneGroup in Orlando, Florida pays me a fee each month to use a sale technology I created for Automobile dealers and for that The Cardone Group pays me a royalty. I am also a partner in the company and share in the profits of the company.  A musician, writer, inventor can be paid a royalty for something they created.

Most millionaires won’t have all of these income streams – most of them will have simply taken a salary, saved it over long periods and one day realized they had become millionaires.  But the really rich and wealthy will many multiple streams of income simply because they have lots of money to invest.

Billionaire Warren Buffet made most of his wealth using #6, (Capital Gains ) to earn most if not all of his wealth most of which is not taxable.   My friend Bob Duggan hit the Forbes 400 list by turning a company around.  He never took a salary, invested his own money, convinced other people to so the same and then sold the company for $21 billion creating an enormous capital event in his life that was taxable because a sale was made.

And before you think you can’t do this, remember 86% of all millionaires were self-made, according to a 2012 survey by Fidelity Investments.   I was broke at 25 and I did it without money or connections.  Where do you get started? Start where you are now.

Get great at the job you have so people want to pay you more money (salary #1 ).  Then see what you can do there to earn a bonus or commission (#2) where you work and/or join a MLM or Network Marketing company to earn additional money through sales or sell stuff from home on the internet or become an affiliate with my company.  Lots of NetworkMarketing companies use CardoneUniversityto prepare new agents how to grow their businesses.  I love network marketing because it offers enormous upside for a minimal investment.  Then when you start making enough money to have extra money to put aside you will either put that money in the bank  and earn almost nothing #3 but at least your money is safe until the banks fail.  At some point when and if you keep growing #1 and

When you start making enough money to have extra money to put aside you will either put that money in the bank (#3) so it is protected until you are ready to start investing.  Until then keep investing in yourself so people see you as valuable and want to pay you more money.  At some point if you keep growing #1 and #2 you will have enough money to start investing money in rentals (#5 – best thing I ever did) or stocks (#6 -I hate this game)  or in the creation of your big idea and collect royalties (#7).     Warning you MUST get #1 and #2 down or you will never have a shot at the others.

There is no magical seven streams.  If there is a magic formula it is this: you MUST get #1 and #2 down.  Unless and until the marketplace sees you as valuable, trustworthy and dependable because of #1 and #2 they will not get behind you anyway.  Lastly you will have to learn how to sell to enter become rich or wealthy and have multiple streams of income.   Name off any wealthy person and I will show you a sales person – Warren, Oprah, Jobs, Gates, Trump, Cuban……

Good luck and I hope this helps.  Your friend in Sales and Business,

Grant Cardone

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