One career, and one salary / income, is seldom enough. Single stream, active, income, as opposed to multiple streams, passive or residual, income.
Fundamental Principles.
Few people still live in a rural condition where life is about building a shelter, planting, harvesting, keeping livestock, or a mixture of these, and surviving on the results of that effort.
Today most people are employees and are part of, and conform to, the rules of the economic system. Production and consumption are the cornerstones of that system, and most people are part of both. The production of goods or the provision of services and the use of goods and services provided by others.
Traditionally we are taught to get through school. To get a degree or qualify as a professional in some profession, or to learn some skills. To get an appointment for a job or a career, and to hang on to the employment we have for the next 40 years.
A number of points that need to be understood:
- The reality is that unless you are a professional person like a doctor, a lawyer, business owner, or an architect, and working in your own practice for yourself, you are an employee, and employees work for the benefit of the employers. So as an employee, you will never get the full benefit of the income you are creating.
- One person can only ever work a certain number of hours per day. So, there is a physical limit to the amount of income you can earn from what you personally must, and can, do.
- The really wealthy individuals in the world, and there are too many to list:
- Diversify by engaging in a number of diverse or related activities. See Elon Musk as an example.
- Employ the services of other people. They leverage the efforts of employees, other people, and the benefits of capital.
- This is multiple steam, passive or residual, income generation. Even if the individual is not personally, at the job, delivering the service or the goods and creating the income, there are people or assets generating income on his or her behalf.
- Normally, the creation of a business that will enable the owner to derive passive or residual income, has associated risk, and needs expertise, a certain amount of capital investment, and working capital. The fail rate is extremely high, and most people do not understand that “You do not own a business, the business owns you.” Unless you have the skills, the capital that you can afford to lose, and are passionate about the business and the product / products / service it provides, this is an extremely difficult and risky way to earn income.
The bottom line here is the fact that most employees need extra income to boost the income they earn from their employment, in order to live the kind of lives they want.
Sometimes the process, of getting to a desired destination, is the total of a series of smaller successes.