Going From 1 to 5 Streams of Income

If you’re like most people your financial stability is relying on a one-legged stool.

That one leg represents a single source of income.

Whether from a job or, if you’re self-employed, from sales or commissions from a single product category, as long as the market is strong your income will also remain strong.

However, a market slow down and decline in sales can cause your one-legged stool to wobble…and maybe even crash!

You can take steps to be more financially resilient in all market environments though by adding additional income streams.

Multiple streams of income provides support when your primary source of income slows down.

This lesson hit me hard a few years ago.

My wife and I scaled a house flipping business that accounted for 99% of our income.

As the housing market grew stronger and competition increased we noticed our profit margins shrink.

That situation was forcing us to take on more risk than we were comfortable with in order to grow.

Ultimately we realized that we needed to diversify our income instead of solely relying on flip income.

Start thinking about complimentary products or services you can offer to supplement your income.

Or maybe there is a completely unrelated opportunity that you’ve been considering.

Sometimes those opportunities can grow into income streams even larger than your current primary income source.

Below are the 5 complimentary income streams we added, including one that now exceeds all but one other income source:

• Rental income: We already had a couple of rental properties so this wasn’t exactly new, but we intentionally hold a lot more properties instead of flipping them. Now we only hold properties long-term.
• Short-term rental income: We set up two properties for short-term rentals on Airbnb and VRBO. Being in the hospitality business is a lot more active than renting a home to a long-term tenant. It also produces more income when done correctly.
• Commission: We brought Realtor sales in-house and started earned commission on our property transactions. We also helped homeowners list their home if they weren’t interested in an off-market cash sale, which significantly increased commission income.
• Stock: I’m a real estate guy, but when I learned that I could build a stock portfolio with eXp Realty while doing the exact same thing I was already doing, it was a no-brainer decision to hang my real estate license with eXp. To-dated I’ve earned thousands of shares of EXPI.
• Revenue Share: Revenue share is the passive income component to eXp’s three-income stream model. eXp Realty shares 50% of it’s revenue through the 7-tier revenue share plan. It’s such a powerful opportunity to build passive income that it only took a few months to surpass our rental income. To-date revenue share represents our highest source of income outside of sales from our investment properties.

MARKET OBSERVATION

The Fed hikes rates another 0.75% to the highest since 2008

Cash transactions exceed FHA financed home sales in Q3 for the first time since 2007

Consumer confidence in housing hits new low with just 16% saying it’s a good time to buy a home

New single-family construction permits down 17% YOY

New multifamily construction permits up 25.5% since September 2021

Average 30yr fixed mortgage rates down slightly to 6.95%

Originally Posted on InvestedX.