Blog by Thabo Mmotong We all need multiple income streams
Not all of us get the opportunity to earn a six-figure salary or to run a multimillion rand business.
Most of us depend on a single monthly income [if we are lucky to even get a job] – and our income is never enough to afford us the life and financial freedom we long for.
When I started my job as a pharmacist a few years ago, I thought my salary would be enough to afford me the life of my dreams. Years later, I realised that I was spending more and more with every salary increase, and I was seldom left with any surplus money in my account.
I was not able to save for any financial emergencies, and I was also not saving enough for my retirement. Unfortunately, most people are still stuck with a single income. If you were to miss a single month income or lose your stable job due to a tragedy, would you be able to maintain your current lifestyle?
Would you be able to continue paying your bills, or downgrading would be your only option?
Only a few people have multiple income streams which cover their monthly expenses, go towards an emergency savings account, and to help them in achieving their financial aspirations.
Let's look at this analogy: think of your income as a hose pipe connected to a tap and the pipe supplies a big Jojo tank with water – the tap being your source of income and the Jojo tank being your bank account.
You are continuously trying to fill the tank with water[money], but the tank is never full because you keep using the water for bathing, cooking, drinking, gardening...[expenses]. For you to be able to fill the tank easily and quickly, you'll have to increase the number of water taps and pipes [income streams].
Even if one of the taps stops working, you'll still be able to have a significant water supply to your tank. The same is true in your finances: you need more income streams to pay your bills, and to achieve financial freedom.
You can't run away from the fact that life is becoming more and more expensive with the passing of each day. The R100 you had last year is not the same as this year's R100 because of our many economic challenges. The high inflation and high interest rates are increasing the costs of everything else: fuel, food, clothes, property, and education. If you are unable to bring more hundred rand notes into your account than you did last year, you are actually getting poorer every year.
The solution to some of these challenges is not necessarily to spend less, but to earn more money through multiple streams of income. Some of these extra streams may require a lot of your time and money, whereas some require little [or no] time and money. I prefer the latter because my money works for me even in my absence.
I chose to go into the property business and to invest in shares because these are some of the best passive income streams.
Let’s look at Mr Mofaya, our 'Archbishop of radio' – Sibusiso Leope: not only is he a radio and TV host, he's also a DJ, social entrepreneur, speaker, author and producer.
He has managed to establish multiple income streams, and will possibly retire young and rich.
The good thing is, just like Sibusiso, we don’t only have the ability to identify multiple problems in the market; we are also able to provide multiple solutions, and to get paid for providing such solutions.
That is the core foundation of entrepreneurship: identifying problems and getting paid for providing solutions.