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Multiple Income Streams: Why I Started 5 Companies (and maybe you should too) – Guest Post

This is a guest post by Joel, who shares his thoughts on the importance of multiple income streams and how to develop them.

Quick! How many streams of income do you have? If your main source of income was to dry up over night then what would you fall back on? If your answer to the first question was “One” and your answer to the second question was “Umm…” then this will be an important post for you to read whether you are self employed as a freelancer or firmly entrenched in corporate America.

My goal is to show you why creating multiple income streams is a smart risk management tool as well as share a few ideas for starting businesses that can provide those multiple income streams, and of course hopefully provide a useful how to guide so that you can have some concrete information to help you decide the best way for you to start creating some of your own multiple streams of income.

Safety in Diversity

Just as many financial planners and portfolio asset managers preach the benefits of a diversified investment portfolio I would like to take that concept a step further and apply it to not just passive income from an investment portfolio but also to your active income/earned income from your job or business.

The reason that many planners are so hyped up about creating a diversified investment portfolio is because diversifying is a great tool for managing risk. Diversifying allows one to “spread out the the risk” across the overall “bucket” of investments so that if any one individual investment goes horribly wrong then the overall negative impact on the group of investments as a whole is minimized.

Many things go into creating a diversified portfolio but the one thing that you have likely heard mentioned is the correlation of each of the individual investments within the group of investments. For the sake of this discussion all that you really need to have a firm grasp on is that correlation measures the relationship between the different investments – more specifically the degree to which certain investments can be expected to perform in a similar fashion or not.

All of that to say that diversifying income streams (like investments) should be done in a way so that correlation between the different income streams is taken into account (i.e. If something happened to very negatively affect my Income Stream #1 would it also affect my Income Stream #2 in a negative fashion?)

Let’s take a look at some practical examples both from some of my personal experiences and then most importantly from the owner of this blog. Granted, I do not know Mrs. Micah personally but as you can tell by reading her about page – Mrs Micah is well on her way to having this multiple income streams concept down to a science.

This blog is one of the best places I could publish a post on this topic because if you will notice in the about page that Mrs Micah at the age of 24 already has 4 sources of income (that I can count) that include working as a library paraprofessional, writer, blog consultant, and quilter/crafter (not including source #5 which is marrying someone with a job! Incidentally, a very real strategy for some but we won’t go there 🙂 )

The very first business that I started years ago was an independent agency selling Florida health insurance. I loved running the agency (and still do along with the much needed expertise of my business partner and head sales manager Mark – yes, I am the financial/computer nerd of the operation and he is the expert sales leader of the operation if you haven’t guessed 🙂 ) but as with any business undertaking it is smart to think of not just the present but the future and to try to capitalize on different trends in the market as well as prepare for any potential risks.

One risk to any health insurance provider or agency is the risk that future government intervention will negatively affect the individual health insurance business model. What this meant for me is that even though I had one income stream that was developed nicely (the health insurance agency) there was still work to be done in preparing for any potential decrease in that income stream. The first step that I took to make a second income stream for the agency that was not subject to the same governmental risk as the first income stream was to have all agents able to make money selling Florida life insurance.

This second income stream provides a way for any agent in the agency to continue to make a substantial income working to help clients with their insurance needs even in a “government takeover” of health insurance worst case scenario. This second income stream could best be characterized as an intra-company alternative income stream but as the title of this post implies I also took additional steps to form other companies that produce additional income streams.

Starting Multiple Businesses

Certainly one could start just one company and implement many of the “intra-company” alternative income streams and adequately hedge against most risks while starting a wildly successful company but if you are like me (and many entrepreneurs are since according to the Kaufman Foundation the average entrepreneur starts more than one company) then you likely love the thrill of starting new projects and new business ventures. While many serial entrepreneurs start multiple companies because they love entrepreneurship (as do I) it should also be thought of as a smart business strategy.

Here are some questions to ask yourself:

  • What is your primary source of income?
  • How dependable is that source of income?
  • What risks are there that the income will disappear or be substantially reduced in the future?
  • What can you do to minimize those risks?
  • What is your fall back source of income if your primary source of income dries up?
  • Are your alternate sources of income subject to the same risks as your primary source of income?
  • What additional sources of income can you develop now that will act as a hedge against losing your current sources of income?

If you find yourself starting to feel a little overwhelmed and thinking to yourself “What is he thinking?? I have enough things to do with my current company without trying to start another company!” just keep in mind that one of the beauties of the Internet is that small businesses can be formed, websites can be built, and new streams of income can be developed in months and even days rather than years.

Certainly hard work and discipline will be required but I would challenge you to figure out where your area of expertise and/or passion is and see how you can put that to work providing you with an additional income stream. If you love crochet then build a website about crochet where you can publish new crochet designs and interact with other crochet fans. If you work as a Human Resources Manager then build a website that is packed full of great tips and inside knowledge from the HR field.

For me, I love anything related to the web, entrepreneurship, and finance. I am a CFP® and a self professed Internet nerd so it was only natural that I would take my love for those things and create a website for comparing credit cards, a website with tools for finding domain names, and a new site I just started working on – a site for comparing car insurance online – with the ease of setting up a mini online business the Internet can be a great avenue to begin to add some alternative income streams to your “portfolio” of earning potential.

My challenge to you is to ask yourself the above questions and then see what you can do to gauge the risks associated with your primary income stream, think of ways to minimize that risk, and then think of additional sources of income that are negatively correlated with your primary source of income and then find yourself in the enviable position of not having to be ultra dependent upon just one source of income. What do you think? What are your tips for developing multiple sources of income?

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Cassie November 19, 2009 at 5:18 pm

I agree that multiple incomes are very important! I personally have 2 that are stable.. and I have a handful of other small ones that are random. It’s definetely helped during lean times!

Funny about Money November 19, 2009 at 11:11 pm

This is a subject that I’ve been thinking about recently, too. I have four: blog, freelance business, f/t job, p/t teaching. One of these, the f/t job, is about to go away, to be replaced with Social Security and, a year from now when (we hope) the market has recovered, drawdown from savings.

The problem with a set of income streams is that maintaining them means 15-hour days, seven days a week. I’m hardly working at all at my soon-to-be-former job, but juggling the other income streams is about to kill me. Same is true for my associate editor, who hopes to survive unemployment by cobbling her living together with gigs as a freelance editor & project manager, waiting tables and tending bar at Applebee’s, and teaching online courses for the University of Phoenix: she says she also is dying of overwork.

And with the exception of my moribund f/t job, none of these enterprises earns anything resembling a fair wage.

It seems to me one or two extra income streams in addition to a full-time job can make for a good way to pay off debt, to prime your investments, or to build an emergency fund. But this may not be something you can expect to fall back on in hard times.
.-= Funny about Money´s last blog ..Why I secretly feel glad my job is ending… =-.

Financial Samurai November 20, 2009 at 2:08 am

Howdy Joel,

Thnx for your post. Do you mind telling us more about your years of experience post college and when you started your businesses, as well as how long each business took, to become profitable, or specifically make more than $1,000/month in revenue?

In concept, it does sound great to have 5 different projects making you money. I’d just like to know the magnitude of the income stream if you will.

It seems fairly easy to make north of $500-1,000/month on a blog, and I’m wondering how we get to the next step of $2,000-5,000/month etc.


.-= Financial Samurai´s last blog ..My SUV Will Beat Up Your Hybrid & Save The World! =-.

Financial Samurai November 20, 2009 at 4:14 pm

Where did Joel go? Mrs. Micah, do you mind e-mailing him so he can come back and answer some of our questions?

.-= Financial Samurai´s last blog ..Everything Is Relative Superstar – Being Happy With What You Have =-.

Credit Card Chaser November 20, 2009 at 6:50 pm

Hi FS,

Sorry about that – I guess I forgot to subscribe to receive email notifications about new comments for this post!

I run close to 1,000 different fully developed websites that each generate differing levels of income where some have made high $XX,XXX per month and others may make just $X per month but I don’t have a ton of experience in creating high traffic blogs because most of the sites are “regular” type websites that may or may not have a blog section on the site (similar to the way I have CCC setup).

I do know though that if you can keep committing to producing high quality content (which you do over on FS because I really enjoy reading your blog) then once you get over the hump you can grow exponentially because it seems that many blog owners get discouraged when they don’t make a ton of money right away and then just give up.

If you want to learn more on the entrepreneurial side of some of the stuff I like to do then you can check out one of my other sites at where I have a blog that talks about domain names, Internet marketing, and entrepreneurship type stuff instead as opposed to credit card oriented stuff on

Above all – I think its just important to treat anything done online just like a “regular” offline job in that it requires lots of hard work and a commitment to really work your hardest to give out high quality content, build great tools, be honest in marketing to create stuff that people actually want to use, etc. rather than falling prey to the “get rich quick” type of mentality that many people seem to have.

PS I think I made $17 for the whole month for the very first month that I put up my very first website years ago so your blog is well ahead of where I was back then so awesome job with FS! 🙂
.-= Credit Card Chaser´s last blog ..Credit Cards & Bankruptcy: A Visual Tragedy =-.

Financial Samurai November 20, 2009 at 8:29 pm

Hey Joel!

Good to hear from you man. Wow, 1,000 websites?! Where do you have the time? Do you ask others to set them up for you? I can’t imagine tracking more than 10 websites, let alone 1,000. That’s incredible!

Just doing some simple math, given you said some have made X, and others XX,XXX (! nice), if the average income per month is $100 (XXX), then $100 X 1000 = $100,000/month. Is that a fair, or even conservative assumption? If so, I gotta get cracking! hahaha, b/c that is just huge wealth!

Thanks for your compliments on my site. I enjoy reading your comments. Do you mind letting us know how many hours a week you work?

My dream is to just retire in 8-10 years, and just focus on 1 or 2 websites to try and bring in $100,000-$200,000. I figure, after 8-10 years at building a brand, I can’t possible fail, can I? 🙂


.-= Financial Samurai´s last blog ..Everything Is Relative Superstar – Being Happy With What You Have =-.

Credit Card Chaser November 20, 2009 at 8:38 pm

@ FS

I used to work around 80-100 hrs a week but now I work a much more typical work load because I try to automate as much as I can (and outsource certain things). My thinking was to work as much as possible right away so that I could then be freed up to do other things down the road (and have money coming in that I could use to outsource coding and other things that might take me like 5 hours to do and my coding genius friend like 10 minutes lol). One of my favorite books that talks about this is “4 Hour Hour Workweek” by Tim Ferriss which I am sure many have heard of.
.-= Credit Card Chaser´s last blog ..Credit Cards & Bankruptcy: A Visual Tragedy =-.

Financial Samurai November 20, 2009 at 11:07 pm

Sounds good Joel. I was the same in my full-time job as well, working around 80 hours a week for the first year, and down to about 65-70 in the second year once I got a hang of it.

Your computer programing/coding skills are a big help, as I know jack do do! But, it’s fun to learn, and once the basics are set up for a blog at least, everything else is pretty easy.

I definitely read the 4 hour work week. Good book, and catchy title.

I’ve decided to pursue my full time job to build my financial nut, but do something online, on the side. It’s been fun so far!
.-= Financial Samurai´s last blog ..Everything Is Relative Superstar – Being Happy With What You Have =-.

Michael November 23, 2009 at 1:08 pm

The SEO-spam-style links in this guest post are really distracting. Mrs. Micah, it’s my opinion that you should’ve had him use the (lame) names of his companies as the anchor text for readability’s sake.

James December 2, 2009 at 3:18 pm

The one issue I have with this posting is the time factor.

What a lot of people argue is that its often better to focus on one particular business rather than spread your efforts across 4 or 5 different projects.

Otherwise, I think FS is asking good questions here.


.-= James ´s last blog ..The End of Pennies? =-.

Credit Card Chaser December 2, 2009 at 3:22 pm


Very true – it may be best for many to just start building one business at a time (although I also mentioned the “intra company” strategy of finding multiple sources of income within each business so that you are never too reliant on any one source of income).
.-= Credit Card Chaser´s last blog ..Win $500 in the 2009 Credit Card Chaser Love/Hate Credit Cards Contest =-.

Mineh September 20, 2010 at 4:16 pm

This is awesome. I also started slowly and would say that multiple stream of income is the way to go. There are various ways to go and if employed full time one can start on one streat partime as time goes on venture into another one.

It is important to note that with dedication and hardwork starting multiple streams of income is possible.

thanks for sharing this post and am sure many people will benefit.

Mony November 13, 2010 at 7:57 pm

It is important to note that even the big gurus they do not rely on only one source of income. They embark on several streams and eventually make it big. Thanks for this post and am sure many people will benefit from it.

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