Primary Source Of Income vs Multiple Sources Of Income
Why is it necessary to create an opportunity for multiple sources of income? Stuart Zadel discusses in this short video.
Hi there and welcome! This is Stuart Zadel and welcome to this month’s video success tip here from the virtual headquarters of Zadel Property Education.
Now, this month, I’m very excited because we’re going to be talking about income. That’s right, your income but specifically, what’s called, “multiple sources of income.”
What Are The Problems With Primary Source Of Income (PSI)?
See, there are two sorts of income out there. Most people have what’s called a “PSI” or primary source of income. Now, for 96% of the world’s population, your PSI is your main income generator. For 96% of the world’s population, it’s a job.
Now, the problem with the job is a couple of things.
First one is, they don’t pay that much money. They pay you enough money to live but not to lead.
Second thing is, people that do have high paying jobs tend to spend everything they make anyway. So, it’s good to show off to their friends they’ve got the nice clothes, the nice cars and they live in the nice places but, they’ve got nothing behind them. As soon as the income stops, so does their lifestyle and that’s what we call the rat race.
So, 96% of the world’s population, their PSI is a job.
Now, the rest of the world’s population have what’s called a business. They are on the other side of their coin. They’re generating income and providing products and services to the market place. Now, they have a job.
You might be a property development business in which case you develop properties. That’s your primary source of income. You can be a renovator, you can be a share trader, and you could be an educator, whatever it is that business does, it could be a plumbing business for that matter that is the primary source of income.
Now, here’s the challenge, if something happened or affects that primary source of income, you’re out on your seat. Things changed dramatically. And do you know? All the wealthy people I know have focused, become very successful at their PSI but they don’t stop there. What they then do is they then go and develop which is called, “MSI’s.” That is multiple sources of income. And they just don’t have one, no. They have many multiple sources of income. Now, it could be one, two, it could be three in fact, it could be hundreds and I know people that literally have hundreds of sources of income that coming to them that are unrelated to their PSI. Now, the very important thing to understand multiple sources of income – Technology.
What Are Multiple Sources Of Income (MSI)?
MSI is not another job and MSI is not a better paying job. In fact, an MSI is not a job at all. In general, it is a positive cash flow.
So, it’s a rise of a positive cash flow and it’s highly leveraged income. Highly leveraged. Ideally passive where it’s not dependent on your effort at all but it is highly leveraged income. Now, much of our work has traditionally being done in the property space.
So, in terms of MSI’s, it could be having multiple projects on the go. But, if you’re doing the work, then it’s probably more of a PSI.
But it could be for example a developer. A developer does a full pack, they build four townhouses, they sell three, and clear the debts and they keep one. That one townhouse is now an MSI. If they do that twice a year and keep one, they’ve now got two MSI’s. The rent coming in from that townhouse which could effectively certainly positive cash flow and positive gear or could be completely debt free. That definitely is an MSI.
We’ve got one student who says he has over 60 properties. Now, his return on them is 12% and 15%. They’re fully furnished rentals that he renovates. Now, his interests he’s paying out on them might be 4% or 5%. So, he is making that margin in between and he always want to have one for every week of the year. Well, he has done that and then some more. So, he has over 60 MSI’s in that space that when the work is done, they are highly leveraged. Of course, the challenge with that is there are a lot of debts in that and should something go wrong with the marketplace or the financial system, that could cause some issues.
So, MSI’s are even more powerful when there is no debt on them. When you own them outright and completely.
Now, there are many options to do this but all the world’s wealthy people or the wealthy people I know do have MSI’s aside from their PSI.
The Misunderstanding Of Multiple Sources Of Income (MSI)?
Now, for the normal everyday person, one of these used to be bank interest.
INT stands for bank interest. That is really no longer an MSI for these people. Now, this is a massive problem. 1/5 of the world is now being plunged into negative interest rates as governments desperate to prop up the financial system. Baby boom is around the world looking to retire. They’ve got hundreds of thousands of dollars in your bank accounts now earning no interests. Certainly, we’re down to below 2% now. Certainly in Australia and New Zealand are the highest interest earning countries in the world left. But once you paid tax, halves gone went to inflation, you’re in the negative. So, interest is not an MSI.
Now, for an average person, it could be, if you own a house with a large backyard, you could put a granny flat in that backyard. You get paid for 100% in cash or you get a loan on it and rent it out. That could be a simple MSI for you. But again, you’re dealing with a large sums of money.
Now, I want to give you some new and some different ideas or MSI thoughts.
What Is The 2 Keys To Multiple Sources Of Income (MSI)?
It’s very important. An MSI must not interfere or jeopardize your PSI. This are the 2 keys.
1st Keys To Multiple Sources Of Income (MSI)
So, there might be some effort in the start to set it up, there might be some time or whatever required. But once it’s gone, you don’t need to worry about it.
So, I have one of our clients who is renovating properties but on the side, he has some vending machines. The vending machine sit there, they sell every day, every week without them being there. They just go around once a week, restart the machines and take the cash. Each one of them is an MSI and that’s a great idea.
Somebody might have cash point – those cash dispensing machines that you can put everywhere now. They are at train stations, they are in clubs – wherever. Not traditional banks anymore. Some people own them and they’re taking the clip for $2 transaction on the way through. But again, all these things generally require tens of thousands of dollars. Yes, often they’ll finance you into these things but then you’ve got that debt on your head as well.
2nd Key To Multiple Sources Of Income (MSI)
MSI is hugely powerful when you’ve got no debt on them. And most people don’t know how to start them.
There are some exciting things.
Look, you might be – not many people are now camera watching but you might be a professional speaker. So, their primary source of income is speaking for money. They might do corporate speaking earning $4,000 or $5,000 an hour, some of these guys $10,000 an hour.
But their multiple sources of income, they start establishing other sources. They might be selling products, books or study programs, there might be courses on the internet that they established to teach in their expertise. So, that’s the way of expanding from their expertise.
I think everyone out there should have an eBay business or two on their side taking over or selling product that you might import or you might be selling from overseas, that is a fantastic MSI. The website is set up, you’ve just got to start up, know a few things and get going.
Websites. The world has changed. It’s revolutionized. There are micro websites right now. People having dozens of these things making $50 or $100 a week, maybe even $50 or $100 a day.
Now, that doesn’t sound like much I know but I’ll tell you what, those massive rivers, the Sydney Harbour, that wasn’t just a river that started that way. You’ve got all these tributaries coming down from the mountains to eventually form a raging torrent.
So, you can now set up websites all over the world. It’s unlimited to how many you set up. If you could just learn the skills of generating an income from that as little as 50 bucks a day and what if you have 10 or 50 of them? Working on auto pilot, taking over without you or with minimal effort, you could end up with hundreds of them. Now, you can do this in business. You can bolt on new business opportunities to an existing business. You can do it by adding on hobbies that you are already using and making money from hobbies or stuff you enjoy doing. There is no limit to an MSI technology. It is a lot of fun.
What Should You Do Now To Boost MyMultiple Sources Of Income (MSI)?
So, as a result of this video, what I want you to do is write down and draw a diagram like this and put down your PSI in the middle here. What is it? How much of it do you earn? That’s your PSI. But then I want you to draw some spokes of the wheel here and I want you to jot down one or two or maybe three of what you could call MSI’s that you already have or could expand into an increase. What are some of those things you could add?
Because ultimately, you want to get to a point where your MSI income is equal to and increases above your PSI. And once that happens, you are then in a very interesting position because you can make a decision whether you want to continue in this or continue expanding your MSI’s. It’s a wonderful thing to have choice in this lifetime.
Now, if you want some help with this, I am specifically suggesting that you come to my one of Commemorative Think and Grow Rich Wealth Creation Conferenceevent happening next month in Sydney.
10 of this nation’s – in fact, this world’s greatest entrepreneurs, business owners, business entrepreneurs, internet/online entrepreneurs and now property entrepreneurs are coming to Sydney with one question in mind to be answered: How do you today, in this economy, generate multiple sources of income so that you don’t have to work anymore?
If that sounds interesting to you, jump on to our website straight away while you still can and the website is www.thinkandgrowrich.com.au.Click The Button Below To Secure You Seats Now (Hurry Up because there are only 93 seats left)
I’m excited! This is going to be the most inspiring event I’ve ever been a part of. This is going to be one of those events they are talking about for decades to come and you have an opportunity to be there. I look forward to seeing you. It’s history in the making and I can’t help to celebrate your success and create some more financially abundant people there.
I hope you enjoyed this success tip. I look forward to talking to you next month.