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The Myth of the Seven Streams

I was having dinner with an acquaintance who runs her own business—or two. She has multiple other endeavors designed to generate some measure of income. She is constantly commenting on how tired and worn out she is, how she can’t seem to get anything done, and how her family complains that she’s always on the go. She’s concluded that her family simply doesn’t understand the importance of networking. I suspect that when she’s home, she’s still absent because she has a very active social media presence.

As we were eating our meal, I listened to the ongoing litany of her busy life. Exhausted, I finally asked, “Why do you wear yourself out doing all this stuff.” She paused and gave me a look of unbelief that I would ask such a question and responded, “Girl, if you want to be successful, you have to have seven streams of income.”

I know all about the seven-stream-income theory that many financial experts swear must exist if one wants to become a millionaire. Clearly, my friend is confused on the concept. She had been functioning as if those seven (or multiple) sources of income had to come from actively working multiple jobs and pursuing multiple endeavors at the same time. She may become a millionaire, but she may not be able to enjoy it or have someone to share it with.

Most individuals who’ve reached millionaire status have learned to work smarter, not harder. They have learned to streamline their income sources by focusing on APP–Active, Portfolio, and Passive streams of income. These are the three categories of income that are recommended to build a secure financial future.

Active income is the income you earn from physically and regularly participating in providing a product or service to someone. This is earned income for your day job or the profit from your business. It can also be money earned from a passion project or side hustle. The goal here is to maximize your active income so that after you meet your basic needs and other financial obligations, you have excess money to fund your portfolio and passive streams of income.

Portfolio income is the income from investments you’ve made using your active income. This income comes from your interest, dividends, capital gains made on your investments in your 401(k), IRA, and other investments (ex: investment in a friend’s business). The idea here is to generate enough money over time to cover life’s major events like college and retirement.

Passive income is where you are paid repeatedly for work that you did once, such as  purchasing rental property that is managed by someone else, or collections from your creative published work (royalties. After your initial investment of time and/or money, you can pretty much sit back and collect the money generated.

I recommend that you diversify your sources of income from at least the first two categories. The idea in diversification is that if you fall short in one source of income, the other sources will be enough to cover you. You can have multiple projects in each category. But, the idea that you must  have seven streams of income to be successful is a myth. The focus should be on the quality of your stream in each of the APP categories. If you want to pursue something, pursue an increase in salary or grow your business so that you have the income for your portfolio and/or passive income stream.

If you’re always running full speed, trying to give 100 percent to each of your multiple endeavors, something or someone else is getting your leftovers. While pursuing your dreams and managing your streams, make sure you strike a balance so that you are not sacrificing your family or other things that are worthy of your attention for the sake of getting rich. Proverbs 23: 4-5 tells us that we should not wear ourselves out trying to get rich, but to use wisdom and restraint because as quickly as we can glance at it, it could all be gone—and then what?

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