My Five Streams of Income

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According to this, “65% of self-made millionaires had three streams of income” and “29% of self-made millionaires had five or more”. Meanwhile, this article starts breaking down “7 different income streams”, but some of their recommendations are things most of us should be doing anyway, like investing. Other ones are downright odd. Do you consider your spouse’s salary as a stream of your income? I don’t. I don’t think you should either.

For this article, I’m laying out the five streams of income I actually count. If you count my index funds or the fact I’m technically a SOCAN-recognized composer who’s only earned pennies in royalties, I have more. I’m mainly counting my side hustles that actually put money in the bank though. This is how I make my money.

My main gig is I’m a wedding photographer. My smallest package is $990 (two hours) and my largest package is $4,995 (twelve hours). My secondary gig is as a liquor store clerk, making a paltry $13.50/hour. I could choose a more lucrative job, but this is pure fun for me. I could spend all day talking about wine, and I’d actually be less happy making $20/hour doing something I didn’t care about. My third gig is as a landlord. In March, I’ll be looking after two renters/roommates, and you should know this is actually more work than I thought. For now, any rent money I make is going back into renovating the property. Both bathrooms need to be redone, but this is an investment for the future. A beautiful bathroom will enable me to charge more for rent once my friends move on. My fourth gig is I write for pay now, and make $0.15/word on assignments. This is currently super fun for me! I can do this anywhere I want, and if I had an idle gig where I’m just needed as a warm body — think security guard or exam invigilator — I could be earning twice the pay for the same hours! In just one week of November, I was able to bill a startup $225 for three short blog posts. I’m looking at developing this as one of my main sources of income in the next few months. My last gig is a questionable one, but it technically counts as investing. This one deserves its own paragraph.

Early in November, I started dabbling with cryptocurrency. I now own small slices of Bitcoin, Ethereum, Litecoin, and IOTA. In just six weeks of casual trading, I’ve put in $800 and I’m somehow $500 ahead. Before you drop everything and throw your life savings into Bitcoin though, you need to understand the technology and the risks. This is why I consider my cryptocurrency investing a “gig”. I read this and this in the past month, and I stay up-to-date on trends. It’s a job. I don’t advise you getting into cryptocurrency blindly. Everyone thinks they can time the market, and people have lost their life savings believing that. I’m fully aware I could lose my entire investment at any time. If you try this, proceed with extreme caution. I know friends of friends who have lost $10,000. Know the risks. This, as a hobby, is my fifth and final gig.

You’ve heard of “fuck you money” (FU$), but I love the idea of my multiple “fuck you jobs”. Liquor store lays me off? That’s fine. I can replace a whole month of clerk income with a single wedding shoot. Roommates moving out? A little extra writing, and I’ll still make my strata payments on time. When new roommates move in, rent will actually go up because of the shiny bathrooms! If I lose my entire crypto investment? My index funds are still making profit, and I’m sure I can come up with something to make up the loss, like renting out my camera gear. I truly believe YOU CAN ALWAYS MAKE A BUCK. With full-time employment becoming less and less stable, diversifying your streams of income is just as important as diversifying your investments. It’s just the smart thing to do!

Remember: “65% of self-made millionaires had three streams of income”.

How’d you like to be part of that statistic?

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Working Forever Might Not Be So Bad

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Taken from a previous post:

FIRE [Financially Independent, Retired Early] is generally defined as the stage a person reaches when the return on their investments is enough to cover their living expenses. A quick bit of math you can do to figure out your FIRE number is to take your annual expenses and multiply by 25. (If you spend $25,000/year for example, your FIRE number is $625,000. Start saving.)”

You can read the rest of that post here, though my description of FIRE isn’t as accurate as it could’ve been. For one, since this is such a huge topic, I didn’t exactly account for inflation. The truth is if you’re 30 now, you want to aim for $1M by 65 if you want to Retire For Good (RFG). This is because $1M in 35 years only amounts to $500,000 of today’s spending power, or $20,000/year in returns based on the 4% rule. This also assumes you can live off $20,000/year. Some people can’t. From this point forward, please note I’ll be using a tilde (~) to denote future value, and no tilde to denote today’s value. Here’s a post to help you math out your saving goals now, based on ~$1M/$500K/$20K. Read those links, and the math should all make sense.

In any case, I now advocate working in some capacity forever. Here’s some of the reasoning as to why, but this little bit of math should convince you that working forever might just be the way to go. (Trust me, it’s not as bad as it sounds.)

If $20,000/year is the goal, it’s very possible that someone at 65 could make that without too much effort at all. Remember, that’s only $1,667/month. In Canada now, what you can receive from Old Age Security ranges from $526-$874. Let’s aim for the low figure of $526, and subtract that from $1,667. (OAS is considered taxable income, so keep that in mind. Also, not everyone qualifies, so read this.) You’re now left with $1,141. Let’s also assume you have some savings. Let’s say you missed ~$1M by a wide margin and only landed at ~$400,000, or $200,000 of today’s value. Going by the 4% rule which spits out $667/month, that takes you down to $474. Now, I don’t know about you, but making $474/month, even in old age, seems entirely manageable to me. When retirees somehow watch 6.2 hours of TV a day now, making $474 per month working is a better use of time and will help you retain your health. This would only mean 31.6 hours per month at $15/hour. If that sounds bleak, it shouldn’t. At $20/hour, that number’s 23.7, or only 3% of your month! That’s only if you’ve completely messed up your retirement savings! If you’ve saved ~$1M, you’re done! You can coast! But if you’re like the rest of us and see yourself only reaching ~$400,000, you should understand you can work after 65 in a way that will actually be flexible, easy, and good for you, and you’ll still be perfectly fine!

Obviously, planning for old age can be kinda scary. There’s always the possibility poor health makes it impossible for you to work. This is why you should aim for ~$1M.

Society teaches us retirement is black-and-white. It’s not. Loads of retirees continue working to supplement their income. If you save properly now, you won’t have to work at 65, but you’ll probably want to anyway. I know I will. And even if you fuck up and don’t save ~$1M in this lifetime, a little bit of work after 65 can go a long way.

6.2 hours of TV time a day is 186 hours per month. Can you use <24 hours to plan yourself a more secure retirement, or are we crazy?

Let us know on Facebook. We’ll put any feedback in a future article.