It was mentioned briefly on a podcast I was listening to today that millionaires have a minimum of seven income streams at all times.
What do you consider your real estate investments as, one whole income stream or multiple? What else do you consider as an income stream and why? Me personally, I only have two rentals so far, but I consider it as one whole income stream even though it doesn’t make up a whole income for me yet as I’m building.
Depends how you want to look at it.
What if your buy and hold SFR was one Stream
Small multi family a second
Large 5-24 units a third
Flipping that’s a fourth one?
Do a few notes for a fifth
Honestly it doesn’t matter how anyone else defines it. It matters what you define it as. I have a single 6 unit property. That’s just a single stream for me.
When I buy more I’ll group those together. Maybe if I buy some in Another state that can be an additional stream.
I like the idea of quantifying your goals. Makes it easier to achieve.
I have six income streams: I work Monday, Tuesday, Wednesday, Thursday, Friday, and Saturday.
Seriously, I have a business that manages 350 rentals. I have sales income. I own 20 rentals. I consider each of those a separate income stream.
I would not consider four different rental properties as separate income streams because they are essentially the same product in the same market. If you owned rentals in Iowa and rentals in Puerto Rico, I may consider them separate income streams because the markets are different but even that is pushing it.
The reason you have different income streams is because they can feed off each other and when one is down the others (hopefully) are up. It diversifies your risk.
I have three businesses: property management, real estate sales, and personal rental properties. When property management is weak, sales tend to be strong. When sales are weak, property management tends to be strong. Sometimes they are both strong and I make a killing. And I have my personal rentals as a third source. Although they are all related to real estate, I think they're different enough to consider them separate streams.
I hope to one day break into teaching, coaching, and a book to produce three more streams.
A lot of people confuse income types with income streams. If all of your income is derived from the same type of activity, they are the same type of income stream, just coming from more than one origin of payment.
Real estate, bonds, job, business, speeches.....all are different income streams.
The biggest challenge in life is not earning money, it's diversifying the income to generate income from many different origin types (real estate, job, etc).
And, yes, to become a real millionaire (what I call $1M in the bank) you have to have around 7 income streams.
@Zach Temple great question,having one income stream could be enough, depending on how much access cash flow it produces every month or year. Imagine if you would own a 200+ unit complex vs 4 unit deal. That’s completely different income stream.
W2, rental units, dividends. Every time I research to find a new passive income stream I end up reading about starting a blog or youtube channel with advertisements, selling a course or a book and affiliate marketing websites, its like a broken record and I can't get excited about any of them. I'd love to find something like real estate that would allow me to buy little units of passive income that could be added to over time.
I personally prefer counting every individual stream since it doesn't matter to me where the check is coming from.
I currently have a w2 income, 6 roommates, so my monthly streams are 7. But over the year, I will add in a couple more from flips and sales commission.
This is all just a fun conversation to have. I don't view any way of counting streams as better than the other.
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