Revealing my 6 income streams
Lessons I learned along the way in building them up over time
According to a report from the IRS, the average millionaire has seven different sources of income.
Yes, 7 streams of money flowing into their bank accounts, building their net worth and securing their financial future.
While I am far from being a millionaire, I believe I will get there one day.
With the right financial habits, it’s just a matter of time.
Income stream #1 - Salary
No surprises here - the salary from my day job still forms the bulk of my income. I’m still a corporate slave trapped in the rat race.
No shame in admitting this.
The peace of mind that a day job gives us cannot not be underestimated.
It frees up our mental headspace from worrying about how to pay our bills. This gives us the mental capacity to work on creating alternate sources of income.
Income stream #2 - Bank Interest
I get paid a 3% interest by my bank on my idle cash.
It may not sound like a lot (and it isn’t), but a 3% risk-free rate is nothing to be scoffed at.
Taking advantage of high interest savings bank accounts is an underrated hack.
Our bank uses us for cheap borrowing, so why not use them to get the most bang for our buck?
Income stream #3 - Dividends
I see many investors labelling themselves as either a dividend or growth investor.
Why do we need to choose between one or the other?
We’re all multi-faceted individuals after all - so why not both?
The SG stock market is the goldmine for dividends - no 30% withholding tax nonsense like in the U.S market.
My dividend-growth portfolio allocation is about 50-50, though it’s slowly beginning to skew to growth.
Income stream #4 - Stock Trading
I used to think that trading involves staring at a monitor 24/7, something which I don’t particularly enjoy.
This put me off trading for many years, sticking to my comfy blanket of the buy-and-hold strategy.
It’s only recently that I realised that trading can take on many forms - short-term vs long-term, systems based vs discretionary.
I don’t like subjectivity when it comes to trading, so systems trading is my go-to approach.
There’s nothing like having a system that has pre-defined entry and exit rules.
It’s possibly one of the most boring trading systems on earth.
But who cares about excitement if we’re making the dough?
Income stream #5 - Liquidity Pool
I am no crypto expert.
The only crypto that I’ve bought previously are Bitcoin (BTC) and Ethereum (ETH), with a smattering of altcoins in between.
And they were all/ mostly gone thanks to FTX and Hodlnaut.
This scared me out of the crypto market for a few years.
It’s only recently that I’ve begun to learn more about crypto, with the help of a friend + mentor.
A liquidity pool (LP) is one of the easiest ways to generate additional income from holding our crypto assets.
Without getting into the technicals of what an LP is, we receive crypto rewards by staking our crypto into the pool.
Income stream #6 - Options Selling
I don’t do this very rarely nowadays, which is why it’s the last on my list.
Done right, selling options can prove profitable.
I veer towards selling options as part of a long-term investment strategy, rather than trying to make a quick profit.
This involves selling covered calls and cash secured puts (when I have enough cash for it).
Key Takeaways
With these income streams, it might appear that I am making a lot, but I’m not.
The income generated from each source on a monthly basis are only in double or triple digits at most.
The goal of this is to show that it’s possible to start small, and build it up over time.
Some of these income sources may eventually fail, or no longer be relevant in 10 years, but I’m sure there’ll be others that come up to replace them.
Start small, but just start.
If there’s any one of these income streams you’d like me to cover in detail, do let me know in the comments and I’d be happy to do so in future articles.