multiple-incomeMost people rely on a main source of income. For an employee, the main source of income is the monthly salary, in exchange of your service working for a company.

Nowadays, job security is not really being bragged about already. You can say that salary income is stable but it is not really secured. During the past festival celebration, did you tell your friend that your job is pretty secured and you are happy about it? Did you tell your family and relatives that you are being paid more and required to work less? If yes, I would like to congratulate you and please also introduce me to your boss. Maybe being employed is not a bad idea after all.

You’ll most probably find out that 9 out of 10 people working under employment always complain about hectic life, inadequate salary and demotivating office politics.

Problem of Single Source Income

When you think of it, it is quite risky to only have one main source of income. What happen if your boss fire you out of a sudden? What if your one and only major client switch to do business with your competitor? What if your only restaurant outlet had food poisoning incident and it is forced to closed down?

To prevent this nasty situation, you’re commonly advised to have another source of income, or even multiple sources of income. Likewise, it is better for both husband and wife producing income rather than relying on only one sole bread-winner.

The Actual Value of Having Additional Income Stream

First, I want to share with you the actual value of having an additional source of income. Let’s say you have an additional income of RM500 per month, on top of your main source of income. How much capital do you need to set aside to get this amount of return every month?

To generate an additional RM500 interest income from a fixed deposit account, you’ll need to put in RM150,000 in the FD account that’s giving 4% interest per annum. So by putting an effort to generate that additional RM500, it is equivalent to having RM150,000 in Fixed Deposit. By using comparing it this way, the additional income is in fact worth that much if the income is totally passive.

To generate passive income from investment, cash capital is required. In the example above, the capital is huge if the rate of return you manage to get is low, or you can’t stomach higher investment risk.

As most people who start with not much financial capital, your alternative to generate additional source of income is to invest your time and effort. So don’t look down on this because your time and effort worth a lot, as elaborated above!

Is multiple income streams better?

Now, I might have already convinced you to build up additional source of income. But is it true that multiple income streams are always better?

For example, George is an accountant working in an accounting firm. In order to have more sources of income, he does freelance photography on the side. He tutors some primary school students at night. He also trades commodities during some odd hours. Furthermore, he also joined an MLM company selling some health-related products.

What he ends up is having multiple jobs that are taking up most of his time. He works too hard and after tiring weeks, he couldn’t even perform his day job properly. Is this a wise move? Certainly not. I really don’t recommend you to get into this kind of situation like George’s.

I would prefer to have only a selected few big sources of income, rather than having many small and negligible streams of tiny income. If you are like George, trying to build multiple sources of income by performing so diverse tasks, my advice for you is to stop and ponder. Assess the hourly rate and the future potential income increment from each income source. Then focus on a selected fews that you are passionate about and can be turned into an established business. Don’t just simply slog like a money slave.

So it is about striking a balance. Undeniably, you should have multiple sources of income. But it is better to have multiple sources of income in the same field that you can easily scale, leverage and replicate.

Having Diversification, not Diworsification

In the investment world, asset allocation means you have a portfolio in different asset class such as commodities, currencies, equity, bond etc. It is well-known that you need diversification, which reduces risk and can increase potential returns, by minimizing the negative effect of any one asset on portfolio performance.

But when done wrongly, you may end up with diworsification, which is going to pull down your overall return. It gives better return if you are only investing in a few selected stocks that are all winners.

Similarly, you would want to diversify your income, but not to such an extend that would make your return worse. The key point here is to create multiple source of income from your existing one, so you can leverage, replicate and scale!

Create Multiple Sources of Income from your Existing One

If you are under employment, it is hard to have diversification. You couldn’t possibly work for several companies at the same time, could you? If you are a self-employed person, you have the option to choose customers and work with a diverse group of clientele.

In business, it makes sense to have multiple clients rather than just having only a handful of major customers. For example, I know a friend who is very successful in photocopy machine business. His company has a few thousands customers. His customers are small businesses from different industry. So even during economic recession, I think his business will still be fine. Even though the market size might shrink but some of his customers might face financial difficulty, but some might be even thriving during economic recession.

It also makes perfect sense to have several products on sale. So when Product A is not selling as good as it used to be, you’ll have Product B and C that make up the sales revenue.

Just to quote another example, when I was a full time musician (about a decade ago), I performed at a five-star hotel lounge and also some other music cafes. In fact some of the cafes were closed down and there were new ones opening up later at different locations. I did music production during day time. I wrote a new song every week, hoping to sell to some major artists. I even published my own solo album so that I can sell it during my performance. In later stage, I switched to financial industry completely when my life priority changed.

In my current business, I got paid from my book royalties, online financial courses, membership site subscription, commission from affiliate sales, advertising revenues, commission from financial products, referral fees etc. It is all related to what I’m currently doing, which the core business is to educate the public on financial literacy.

As a summary, you can create additional income by leveraging on your existing main competence. It is much easier, and also much secured. Do it now.

How to Get Multiple Source of Incomes



Personal finance author and trainer

    8 replies to "How to Build Multiple Sources of Income? And do it the easy way"

    • Kvin

      It’s very hard for me to have a multiple income as my current job requires me to go outstation always. But now I’m trying an MLM company. With my current status, instead of earning, I’m loosing as I don’t have a good time to really focus. Do you think I’m on a right track?

      • KCLau

        “Focus” is very important. You either focus to advance in your career or the MLM. You will feel very half-hearted when your effort is spread too thin.

    • Hey KC! Great article. I have experimented with all eggs in one basket and then trying multiple streams of income. I feel more safe with multiple streams because a business or opportunity could simply vanish in the middle of the night! But, I also like being “laser-focused” on one source of income to create momentum and lots of income fast. Thanks again, KC!

    • Yan

      Hello KC, another great article :) I totally agree what you mentioned under subtitle’Is multiple income streams better?’… because I’ve experienced it myself.. When too much time taken, I got tired and less energy to concentrated on tasks which require more concentration.

      I must learn more on ‘diversification’ Thanks again for the sharing :)


    • Steve Lye

      Great article KC.

      Keep it up.

    • Lai Seng Choy

      Very well say, KC. I totally agree with you.

      I really enjoy the wonderful feeling on having multiple sources of income. The best part is that I do not need to get them via the hard way. All I do is just to do what I love to do faithfully. Sooner or later, it starts to generate income for me even though I never think about it previously at all.

      Since these income are from multiple sources and mutually exclusive, diversification is actually creating a peace of mind to me :)

    • Kenny Ng

      KC, a great article. It is very educational and very motivating indeed for someone who is eager/ wishes to be out of the employment rat race world and embark on a new journey to attain his/ her financial freedom.

      • KCLau

        Hi Kenny, thanks for your kind feedback. I believe you already took your first step towards it!

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