One stream of income is enough

Or, the distraction of multiple income streams

written by oz chen

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“The average millionaire has multiple streams of income.”

You’ll see this statement often repeated on financial blogs about how rich people built their wealth.

This induces guilt for readers who don’t have more than 1 stream of income.
And it fits in perfectly with hustle culture.
“Everyone should have a side hustle…you need multiple streams of income.”

And my favorite myth: “You’ll never get rich working for someone else!

Here’s a message you might not hear from a financial writer: one income stream can be enough.

Focus on 1 income stream

The truth is that for the majority of people, working a job is still the most important income stream.

Simply switching to a higher paying job makes an incredible amount of difference in someone’s life and their ability to build wealth.

I saw this first-hand when helping hundreds of people transition into UX design. Many of my students technically had multiple streams of income—they were working part time, doing some freelance work and gig work like driving Uber.

Once they upskilled, they gladly traded all their other gigs for a 6-figure job in UX design.

Focusing on your job, skills and career growth is still the most reliable way to make money.

That doesn’t mean that I’m against multiple streams of income.
But at the early stages of wealth building, multiple streams of income can be actually be distraction.

Let me tell you a story…

The distraction of multiple income streams

Over a decade ago, I made acquaintances with a dentist.

He was good at his job and made good money.
But he was enamored with multiple streams of income.
And then he turned his attention on…network marketing.

You can probably tell where this story is going.

He ended up not only losing money, but burned many relationships by trying to sell the pyramid scheme to friends and family.
I always wondered what it would’ve looked like if he just continued in dentistry. Or just explored network marketing on the side.
If he were like any of my other dentist friends, he’d be a millionaire by now.

It’s not about how many streams of income you have (quantity), it’s about the quality of each stream of income.

I can tell you that network marketing is a poor stream of income. Too much work for too little pay.

Public Service Announcement: Please exhaust all legitimate options of making money, like working a job, before MLMs and networking marketing eat your soul.

Increase the quality of your main stream of income, then put that extra money to work.

When to create multiple streams of income

There’s an oft-cited figure that the average millionaire has 7 streams of income. I could not find the primary source for this statistic anywhere.

However, this survey of 233 millionaires found the following:

“Every single one of the self-made millionaires in my study started small, adding one new income stream at a time.

This is a subtle but important distinction.
It’s not that all these millionaires started out with multiple income streams.
Most millionaires start by building out one solid stream – like a job – then invested that money into different income-producing assets, like real estate.

How’s that for “main”stream advice? (Ha sorry couldn’t resist)

This tracks with my experience. I now have 4 streams of income. But I only added them over time, in this order:

  1. Job
  2. Investments
  3. Digital revenue
  4. Property

I allocated some of the money earned from my job into investments, primarily first with my 401K and retirement accounts, then some individual investing. These are passive investments but not necessarily “income producing” – I’m relying on these investments primarily to appreciate over time.

The security of that job bought me the time to earn extra income online, from coaching to producing courses and earning some money from affiliate links.

I also have to thank my job to buying my primary residence, which I can rent out. Mortgage companies look at employment history. W2 income appears the most safe and creditworthy to lenders.

Remove unnecessary guilt around income streams

I hope this removes any unnecessary sense of guilt, burden, or pressure to create multiple streams of income.

Don’t get distracted by the lie that you can’t get rich working for someone else.

This myth distracts from how the bigger picture of the wealth building game is played: convert active income into sustainable passive income.

Focus on what’s in your realm of control, then apply leverage to where it makes sense. For most people, that’s focusing on maximizing the most important income stream: your day job.

Further reading

To round out this topic, consider that there’s a financial hierarchy of needs that can help you evaluate where you are financially, and the moves to make.

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