Multiple Streams of Income—Magic or Myth?

At one point in my life I fully embraced the idea of Multiple Streams of Income (MSI). I read the book by my now friend, Barb Winter “Making A Living Without a Job”. Barb has MSI down pact. Between her book, newsletters, seminars and other projects she makes ends meet. For anyone interested in MSI her book is a must read.

I fell in love with the concept of MSI. I thought, “Wow—this is terrific I’m interested in a lot of things…this can work!”

You know most businesses practice MSI. Very few firms can survive selling or marketing a single item.

But anyway let me concentrate on MSI and the individual.

First off let me say I think it is easier making smaller, controlled incomes with MSI, but if you desire a larger income ($50,000 per year or more) most people need to specialize. Let me explain my reasoning.

I view income in a supply/demand kind of way…you’ll gain more income as what you do becomes more valuable to someone that wants to pay you…makes sense right?

At lower income levels the amount of knowledge/skills/experience you need is obviously less than what you need at higher income levels. And it’s the ‘market’ that determines this.

You also need to remember no matter what endeavor you are trying to earn income from it is competition that will have a great affect upon your earning potential. In a future post I’ll more thoroughly discuss the concept of competition. This is something I’ve wanted to do this for quite a while now and just haven’t had the chance.

Many folks can with a little study and persistence can become good enough in an area to enter the market and swap their skills and talents for money or whatever they're bargaining for. Most often the amount they earn is directly proportional to their skill set…large skill set—large income.

As we all know improving one’s skill set takes time, money and a good teacher. A ‘teacher’ can appear in many shapes or forms.

Say you want to be a MSI person. What do you do? Most feel you should concentrate on those things that require the least amount of additional training, money or experience before you can stand up and say, “I can do ‘x’ better than most people, and I deserve ‘$xxx.xx’ for that.” Because time is short most MSI people do things that require little in additional training, money or experience. The result is they choose to do things that become highly competitive areas. These ‘occupations’ have a low barrier to entry and attract many folks that are looking to earn an ‘easy’ buck. This is why the Internet is so popular with the MSI folks and the ‘Work at Home’ people. But the flip side is competition drives down the profits for everyone…good, bad or indifferent. Sure a few people catch lightning in a bottle and make out extremely well but the rest of them? Profitless business. I don’t think this is a good way to go.

Many MSI make things even worse for themselves by trying to do things that require totally different skill sets. The most successful MSI people like Jay Conrad Levinson tie their many MSI projects together with a common thread. In Jay’s case it is his marketing skills.

The next problem facing those looking at MSI is that many are forced to exchange time for money rather than a skill set for money, which is much less time intensive. Time is the great equalizer, you can spend your time earning $x per hour or spend it earning $x + $y per hour. Quite often to get both ‘$x and $y’ you need a higher skill set, i.e. more training and better teachers (better experience).

The trouble is (I believe) that our inherent tendencies and circumstances keep many of us from improving enough in one area to earn a substantial income much less trying to become good enough in multiple areas in order to earn a cumulative high income.

Face it most of us (I’m raising my hand!) have limited attention spans which makes learning (and mastering) very difficult. The time thing is a big deal also, heck how much time do you think I spent thinking about and typing this post? That time I used was robbing another activity…and possibly an activity that I could use to improve my income greatly but I made my choice and have to live with it.

It comes down to the fact that if you want to be a successful MSI person you need to pick your occupations very carefully and hopefully they link together somehow so that your need to acquire the skill set demanded to earn income is as short as possible. Or hopefully, you’re involved in MSI activities that require virtually no time on your part. For example I market a variety of audiocassette programs, which I clear a few hundred dollars per month on. My $ per hour income from this occupation is about $50…not bad. But again the key is I spend very little time and effort on this.

I’m not a very good MSI person, even though I still do derive income from multiple sources. I know my MSI tendencies have held my income back.

We live in a ‘winner take all’ society. It is 80/20. And to earn a majority income you have to be in the top 20% as a ‘value creator’. Staying in the 80% will get you whatever everyone else is getting—and those are gains that are average or less. It takes effort to be a 20% performer and if you’re a practicing MSI person the time and resources available to you to become a top 20% performer will be limited…quite often severely. And to compound the problem many MSIers (again I’m raising my hand) start a project but never advance it to the point where it is producing income.

The key to producing income (in my opinion) is specialization. Use the time, resources and teachers available to you in order to become a top 20% person. And if you have to be an MSI person, then actually finish the project before you jump into something else.

Some might say that being an MSI person is ‘safer’. I don’t know if that is true of not. Personally I think being a top 20% value creator is easier. I say this from a pure business point of view. I work with a couple thousand different businesses in my part of the state and I can tell you 95% of those businesses (a variety of businesses from retail, manufacturing, wholesaling, high-tech, low-tech, small business, large business) do not come anywhere close to maximizing their potential. Many screw up on marketing, some on human resources, and some on a management level, some on an employee level. Many businesses succeed strictly due to luck or longevity. Any type of serious competitor could come in and take market share from these businesses. Maybe things are different in Australia but in the U.S., most businesses are very vulnerable from my perspective.

Over the last year I’ve cut my MSI activities down considerably. I follow one rule…one project in one project out. I’ve found for me this works best.

The bottom is that I believe to earn $50,000 or more it is easier as a specialist rather than a generalist.

I thank you for your time,

Mike Winicki

You opened it? But, but, but... I didn't think you would! Oh the humanity!

- Thomas.

I just don’t agree with the concept of many projects on the boil at the one time.

Most people who want to make money from their own efforts, outside their current work, usually have life situations that mean that taking on many different projects at the one time leaves them in a situation where they are real busy, which is often confused with real successful.

If you have limited amounts of time and investment capital, wouldn’t it be more worthwhile to just concentrate on one decent project with a higher end price where the payoff is more, ie less customers, less sales required?

Of course most folks developing projects can’t get past the pricing issue of pricing more than they’d pay themselves. That’s why so many people are pricing so low.

I think anyone in a situation where they have a family especially a young one and the associated debt, time restrictions and general lack of project development time is asking for trouble by committing themselves to trying to develop multiple projects at the same time.

Sure have multiple ideas, nothing wrong with that, but remember that being busy doesn’t automatically equal success.

Actually human’s in general confuse these two all the time.

Just my opinion

P.S. Actually a few well known marketers who started out with sub $100 projects now only develop high end projects where the prices are over the $1000-$10,000 level.

Hello Mike and everyone,

I've been coming to this board for awhile now but this is my first post. So here goes...

First up, I do agree with many of your comments Mike. Multiple sources of income is not for everyone.

If you are a highly paid professional then it may be wise to stick with what you know and charge premium prices.

But what about the person who is battling away with house payments, credit card debt and the rest of it? Is there an answer for them?

I've been publishing an offline extra-income newsletter now for around two years here in Australia.

One of the things I do go on about is having many sources of income ... many of my subscribers are struggling for cash and I teach them how to have small wins and lots of them, coming in from all directions. It's something I practise as well as preach.

I freely admit, that this isn't for everyone.

I'm often asked is there a way to get money quickly with little or no money down, and with little experience. My answer is always the same. Yes!

But many people don't like the answer. It doesn't mean easy money. It means providing a service.

A service that solves a problem. The biggest problem solver would be time. If you can save people time, by doing a service that your customers haven't the time or inclination to do themselves ... well you will make money.

Multiple streams of income work for me and many of my subscribers. It's not for everyone ... but it does give me the most precious gift of all ... a lifestyle that I love.

Thanks for reading.

Pete Godfrey

> At one point in my life I fully embraced the
> idea of Multiple Streams of Income (MSI). I
> read the book by my now friend, Barb Winter
> “Making A Living Without a Job”. Barb has
> MSI down pact. Between her book,
> newsletters, seminars and other projects she
> makes ends meet. For anyone interested in
> MSI her book is a must read.

> I fell in love with the concept of MSI. I
> thought, “Wow—this is terrific I’m
> interested in a lot of things…this can
> work!”

> You know most businesses practice MSI. Very
> few firms can survive selling or marketing a
> single item.

> But anyway let me concentrate on MSI and the
> individual.

> First off let me say I think it is easier
> making smaller, controlled incomes with MSI,
> but if you desire a larger income ($50,000
> per year or more) most people need to
> specialize. Let me explain my reasoning.

> I view income in a supply/demand kind of
> way…you’ll gain more income as what you do
> becomes more valuable to someone that wants
> to pay you…makes sense right?

> At lower income levels the amount of
> knowledge/skills/experience you need is
> obviously less than what you need at higher
> income levels. And it’s the ‘market’ that
> determines this.

> You also need to remember no matter what
> endeavor you are trying to earn income from
> it is competition that will have a great
> affect upon your earning potential. In a
> future post I’ll more thoroughly discuss the
> concept of competition. This is something
> I’ve wanted to do this for quite a while now
> and just haven’t had the chance.

> Many folks can with a little study and
> persistence can become good enough in an
> area to enter the market and swap their
> skills and talents for money or whatever
> they're bargaining for. Most often the
> amount they earn is directly proportional to
> their skill set…large skill set—large
> income.

> As we all know improving one’s skill set
> takes time, money and a good teacher. A
> ‘teacher’ can appear in many shapes or
> forms.

> Say you want to be a MSI person. What do you
> do? Most feel you should concentrate on
> those things that require the least amount
> of additional training, money or experience
> before you can stand up and say, “I can do
> ‘x’ better than most people, and I deserve
> ‘$xxx.xx’ for that.” Because time is short
> most MSI people do things that require
> little in additional training, money or
> experience. The result is they choose to do
> things that become highly competitive areas.
> These ‘occupations’ have a low barrier to
> entry and attract many folks that are
> looking to earn an ‘easy’ buck. This is why
> the Internet is so popular with the MSI
> folks and the ‘Work at Home’ people. But the
> flip side is competition drives down the
> profits for everyone…good, bad or
> indifferent. Sure a few people catch
> lightning in a bottle and make out extremely
> well but the rest of them? Profitless
> business. I don’t think this is a good way
> to go.

> Many MSI make things even worse for
> themselves by trying to do things that
> require totally different skill sets. The
> most successful MSI people like Jay Conrad
> Levinson tie their many MSI projects
> together with a common thread. In Jay’s case
> it is his marketing skills.

> The next problem facing those looking at MSI
> is that many are forced to exchange time for
> money rather than a skill set for money,
> which is much less time intensive. Time is
> the great equalizer, you can spend your time
> earning $x per hour or spend it earning $x +
> $y per hour. Quite often to get both ‘$x and
> $y’ you need a higher skill set, i.e. more
> training and better teachers (better
> experience).

> The trouble is (I believe) that our inherent
> tendencies and circumstances keep many of us
> from improving enough in one area to earn a
> substantial income much less trying to
> become good enough in multiple areas in
> order to earn a cumulative high income.

> Face it most of us (I’m raising my hand!)
> have limited attention spans which makes
> learning (and mastering) very difficult. The
> time thing is a big deal also, heck how much
> time do you think I spent thinking about and
> typing this post? That time I used was
> robbing another activity…and possibly an
> activity that I could use to improve my
> income greatly but I made my choice and have
> to live with it.

> It comes down to the fact that if you want
> to be a successful MSI person you need to
> pick your occupations very carefully and
> hopefully they link together somehow so that
> your need to acquire the skill set demanded
> to earn income is as short as possible. Or
> hopefully, you’re involved in MSI activities
> that require virtually no time on your part.
> For example I market a variety of
> audiocassette programs, which I clear a few
> hundred dollars per month on. My $ per hour
> income from this occupation is about $50…not
> bad. But again the key is I spend very
> little time and effort on this.

> I’m not a very good MSI person, even though
> I still do derive income from multiple
> sources. I know my MSI tendencies have held
> my income back.

> We live in a ‘winner take all’ society. It
> is 80/20. And to earn a majority income you
> have to be in the top 20% as a ‘value
> creator’. Staying in the 80% will get you
> whatever everyone else is getting—and those
> are gains that are average or less. It takes
> effort to be a 20% performer and if you’re a
> practicing MSI person the time and resources
> available to you to become a top 20%
> performer will be limited…quite often
> severely. And to compound the problem many
> MSIers (again I’m raising my hand) start a
> project but never advance it to the point
> where it is producing income.

> The key to producing income (in my opinion)
> is specialization. Use the time, resources
> and teachers available to you in order to
> become a top 20% person. And if you have to
> be an MSI person, then actually finish the
> project before you jump into something else.

> Some might say that being an MSI person is
> ‘safer’. I don’t know if that is true of
> not. Personally I think being a top 20%
> value creator is easier. I say this from a
> pure business point of view. I work with a
> couple thousand different businesses in my
> part of the state and I can tell you 95% of
> those businesses (a variety of businesses
> from retail, manufacturing, wholesaling,
> high-tech, low-tech, small business, large
> business) do not come anywhere close to
> maximizing their potential. Many screw up on
> marketing, some on human resources, and some
> on a management level, some on an employee
> level. Many businesses succeed strictly due
> to luck or longevity. Any type of serious
> competitor could come in and take market
> share from these businesses. Maybe things
> are different in Australia but in the U.S.,
> most businesses are very vulnerable from my
> perspective.

> Over the last year I’ve cut my MSI
> activities down considerably. I follow one
> rule…one project in one project out. I’ve
> found for me this works best.

> The bottom is that I believe to earn $50,000
> or more it is easier as a specialist rather
> than a generalist.

> I thank you for your time,

> Mike Winicki

Hi Mike,

Interesting post (as usual)!

However, I have a slightly different take on this issue....

Here's the way I look at it....

Let's first take a hypothetical example of someone who has 3 streams of income. Let's say that with all of them he or she has to actually do work (that is, they are NOT passive streams of income)....

Now, let's say that when he adds up his revenue, and subtracts his costs, and takes his time into account, that stream A makes him a measly $5 per hour....

Let's say that stream B does a bit better, and makes him $15 per hour.

And stream C does the best - what he makes there is $40 per hour.

If he divides his time equally between these 3 streams, he makes $20 per hour on average, which isn't too bad.

NOW, let's take the person who does ONE income stream. The key is here, the person who does one income stream doesn't have time to TRY all three. So whether he makes $5 per hour, $15 per hour, or $40 per hour, depends in part on "luck" - did he pick the "right" one to do?

If he chose to spend his time on activity A all the time, after he adds up his revenue and subtracts his costs, he makes a mere $5 per hour - FULL TIME. He doesn't know about stream B or stream C, because he HASN'T TRIED THEM! He doesn't "have time" to try them.... In this case, he is obviously worse off....

Also, if he does stream B full time, he is worse off too. He makes $15 per hour, instead of $20 per hour which the multiple-streams-of-income guy makes.

But, if he is lucky and chose to do stream C from the beginning, he makes $40 per hour - he lucks out.

I think one thing which might be missing is sometimes we might count all those who choose to do stream C, and forgot about those "unlucky" ones who chose to spend all their time on streams A or B.

NOW, back to the multiple-streams-of-income (MSI) guy. He's making $20 per hour.... BUT, there is nothing to stop him from saying - hold on a sec! With stream C, I'm making $40 per hour, and with streams A and B, I'm making much less. Maybe I should spend all my time on stream C!

This is the approach I like.... Do MANY streams of income - but that doesn't mean you KEEP doing everything all the time! Instead, keep the ones which are making you good money, and drop the others. However, keep experimenting.... Don't be opposed to trying new little streams of income.... Keep what works, and replace what isn't working as well....

The last point I want to make here, is that we are assuming that a person has to work for all these streams of income, all the time. That's not necessarily the case.... Often, if a stream is profitable enough, it can automated somehow - whether by using technology, or by hiring people, or by outsourcing some of the work - that kind of thing. Then, it frees up your time.... You still have money coming in, but you have the time too. This, to me, is the ultimate goal....

The advantage of "low skill" businesses is that it is easier to outsource some of the work, I think. For example, if you mow lawns, and you get LOTS of lawn-mowing jobs, you can first start by SELLING those extra jobs to other lawn mowers. (Yes, jobs like these CAN be sold.) Then, if you want to take it a step further - start a lawn-mowing franchise. This is exactly the process a guy named Jim Penman did here in Australia.... You can read his full book online about it at this web page: http://www.jims.net/jim_book/surprise.htm . (I warn you - it is a full-sized book!)

If you do something which requires your rare talent or skill, then this is tougher to do.... It means you are less "replaceable". That "ties" you to the business more, and makes it harder for you to "outsource" any of the work....

But, I still agree with "specialization" - but not necessarily a "skills-based" specialization. Instead, I think a "niche-based" specialization is perhaps better.... For example, if you sell clothing, you can target your clothing especially for bicycle-riders. It doesn't mean you need any special skills, you just need to make sure that what you make fits the wants of bicycle-riders better than most of what's out there. And make sure that bicycle-riders know it!

Anyhow, those are few of my rambling thoughts on this topic.... :)

- Dien Rice

> Now, let's say that when he adds up his
> revenue, and subtracts his costs, and takes
> his time into account, that stream A makes
> him a measly $5 per hour....

> Let's say that stream B does a bit better,
> and makes him $15 per hour.

> And stream C does the best - what he makes
> there is $40 per hour.

> If he divides his time equally between these
> 3 streams, he makes $20 per hour on average,
> which isn't too bad.

I think both Mike and Dien's posts have valid points. The distinction to draw is between activities that can be greatly improved through experience, learning, and specialisation, and those that improve to a lesser extent or not at all.

The example above gives income streams for different activities as static, unchanging amounts. Although this is no doubt true for some endeavours, it isn't true for all endeavours.

Let me illustrate with an example.

Let's say stream B is "doing web design", and by engaging in three different activities, you are able to earn $15/hour doing web design.

It could be the case that you earn $60 for 1 job, and 1 job takes you 4 hours on average.

If you were to specialise in web design, however, two things may happen. The time it takes you to complete a job could go down, and/or the quality of your work could increase. These efficiency gains are reasonable, given you are now spending more time on this activity.

And thus, through specialisation, a $15/hour income stream may grow into a $40/hour or $60/hour income stream.

A few times the concept of "risk" has been raised, and the question of which strategy -- specialisation vs multiple streams of income -- is riskier.

I would say that both have risks, but the risks are different.

With multiple streams of income, there is probably more "business risk" because the environment is likely to be more competitive, and prices lower, and so forth, as Mike has pointed out.

With specialisation, however, you have the risk that some factor beyond your control will wipe out your income. If you're working for a company, perhaps it will suddenly go bankrupt. If you're specialising in a single type of product online, perhaps a competitor will come out with a better model and greatly lower your sales. This risk is diminished somewhat when following a "multiple streams of income" approach.

- Thomas.

Multiple Streams of Income (MSI) are better than one source of income. Period.

Before you disagree, please consider this:

Having more than one source of income means you have MSI.

So if I work a full-time job and have a part-time, weekend, sideline business that only makes me $50, I have MSI.

If you work for yourself and specialize - something I recommend and have often suggested - you should automatically have MSI.

How?

Because you will have more than one client/customer.

The exception to this is the sub-contracting tradesman who only does subcontract work for one contractor. You see this most often in the building game - a carpenter who only does work for one particular builder and no one else.

In this case, if the builder goes under, the subby is stuffed.

The smart subby will do subcontract work for a few builders. That way, if one of the builders goes bankrupt, he (the subby) still has work (an income source).

Also, to assume that the only way for someone to take on more than one source of income in more than one industry, is to do tasks which have a high competitive nature about them, is somewhat short-sighted or selectively reasoned.

There are certain industries which many people look to to make some money, but very quickly discover there is a little more to it than they thought.

One such example is the Cleaning industry. I often see posts (not on this board) of people who are looking to start their own cleaning business. They ask real basic questions which shows they have no idea at all - they haven't even worked as a cleaner otherwise they would know the answer. They think all you do is buy a vacuum cleaner, a mop bucket and away you go. - There are a lot of people who do this. So in this sense, what you say is right, Mike.

However, what of the person who specializes? They enter a part of the industry all of their own. Maybe they do Dance Halls only, maybe they do Move Out Cleans only, maybe they do Lawyers only, etc. As soon as they market themselves differently, they are different. No competition.

But even if they never make their fortune, or franchise it, or whatever, it still adds to their income. It doesnt have to be a lot, just as long as it is something.

And How Much is totally up to them. But like I mentioned in my post below... they need to do the Math to see how truly lucrative it is or is not.

And Johnny Bravo (Or Richard, Or Max Power or George or whatever you call yourself these days), having more than one source of income is different to having many projects. And remember, two sources of income is more than one and that means MSI. No one says you have to have four or six or ten different sources.

Have as many sources as you feel comfortable with. If that's one other one besides your job, then so be it.

And make sure they do not interfer with each other. And if they do, drop the least profitable one. Or re-arrange your time/schedule. Simple. It's only hard if you make it hard.

You can be in one industry and have MSI. The carpenter was one example. A plumber is another and so is a lawn guy...

A plumber could have fixed maintenance contracts with five or six apartment complexes. A lawn guy could have fixed contracts with five or six complexes as well as his 'regulars.'

In each case, while the person makes money in One Industry, they still have MSI. So if any income source went away, they still have money coming in.

In these cases, what appears to be one source of income, isn't. It's multiple because you have multiple clients/customers who repeatedly buy your product/service.

If you have more than one of these 'businesses' than all the more power to you.

And if your businesses grow and start to intrude on each other's time, then hire others to do the work, or subcontract the work out, or sell the rights to run the business while you still get a small percentage, or sell the business outright.

You can have MSI from one industry or MSI from multiple industries or MSI by having a job and one other source of income. The number of Income Streams doesn't matter. Just so long as you are not totally 100% dependent on one single solitary source of income which, if it disappeared, would leave you with zero dollars coming in.

I think it would be great for everyone to be financially independent. But I realise... that is not possible. Some people cannot handle financial independence mentally. They need to feel the security of a nine to five. And, quite frankly, if it wasn't for the many who do feel that way, we would not have the many and varied products available to us that we have... because there would be no large businesses/companies to develop them.

But just because you may need to have a nine to five to feel secure, does not mean you cannot have a "biz on the side" to generate extra income to make you feel Comfortable.

Let your job be your security and your "biz on the side" be you comfort. Or let your "biz on the side" provide the income which goes into your "retirement fund." Or let your "biz on the side" pay off any investment real estate you have. Or let your "biz on the side" buy your stocks for you. Or... you get the idea.

Having a MSI does not mean letting go of what you already have, if you don't want to. It means having more than one source of income - whether it's from one industry or across mutiple industries. It can be a large income or a small one. Income size is not an issue. It can take up a lot of time or hardly any. It can be from your own business or from another part-time or casual job. Just get a MSI first. Then, once you have it, begin to look beyond to see where it may or may not lead, what you may or may not do with it. If you try to look ahead before you even have it, you may not even bother getting it in the first place. And that'd be a shame.

Michael Ross

P.S. In this week's issue of The Great Ideas Letter (out on Wednesday) you'll see how one man makes an extra $400 - $500 a month on eBay on top of his full-time job. Subscribe today. Click here.

> I just don’t agree with the concept of many
> projects on the boil at the one time.

> Most people who want to make money from
> their own efforts, outside their current
> work, usually have life situations that mean
> that taking on many different projects at
> the one time leaves them in a situation
> where they are real busy, which is often
> confused with real successful.

> If you have limited amounts of time and
> investment capital, wouldn’t it be more
> worthwhile to just concentrate on one decent
> project [snip]

What you're missing with this question is that the concept of multiple streams of income works best when the various income streams are different ways to make money with the same specialty or expertise. When that's the case, it's just stupid not to do this.

Here is the example I know best. Most nonfiction authors are read for their expertise. Someone approaches them to speak to their conference. The smart ones now realize that they are also a speaker now... another stream of income. Someone else asks them to give advice. The smart ones now realize they are now also a consultant. They develop a newsletter to promote the other activities, and they either charge a subscription fee for it, as Barbara Winter does, or they rent out their postal mailing list for additional income.

None of these activities really takes away from any of the others. And it's not as obvious as I've made it sound that it makes sense to do all these things. I know writers who've been asked to speak who say they don't do such things, they are only a writer.

I have about eight income streams, and the great part is that as the economy changes, some of them go great guns and others lag, but something is always working great.

Marcia Yudkin


Is your web site working for or against you... find out here!

dno
> At one point in my life I fully embraced the
> idea of Multiple Streams of Income (MSI). I
> read the book by my now friend, Barb Winter
> “Making A Living Without a Job”. Barb has
> MSI down pact. Between her book,
> newsletters, seminars and other projects she
> makes ends meet. For anyone interested in
> MSI her book is a must read.

> I fell in love with the concept of MSI. I
> thought, “Wow—this is terrific I’m
> interested in a lot of things…this can
> work!”

> You know most businesses practice MSI. Very
> few firms can survive selling or marketing a
> single item.

> But anyway let me concentrate on MSI and the
> individual.

> First off let me say I think it is easier
> making smaller, controlled incomes with MSI,
> but if you desire a larger income ($50,000
> per year or more) most people need to
> specialize. Let me explain my reasoning.

> I view income in a supply/demand kind of
> way…you’ll gain more income as what you do
> becomes more valuable to someone that wants
> to pay you…makes sense right?

> At lower income levels the amount of
> knowledge/skills/experience you need is
> obviously less than what you need at higher
> income levels. And it’s the ‘market’ that
> determines this.

> You also need to remember no matter what
> endeavor you are trying to earn income from
> it is competition that will have a great
> affect upon your earning potential. In a
> future post I’ll more thoroughly discuss the
> concept of competition. This is something
> I’ve wanted to do this for quite a while now
> and just haven’t had the chance.

> Many folks can with a little study and
> persistence can become good enough in an
> area to enter the market and swap their
> skills and talents for money or whatever
> they're bargaining for. Most often the
> amount they earn is directly proportional to
> their skill set…large skill set—large
> income.

> As we all know improving one’s skill set
> takes time, money and a good teacher. A
> ‘teacher’ can appear in many shapes or
> forms.

> Say you want to be a MSI person. What do you
> do? Most feel you should concentrate on
> those things that require the least amount
> of additional training, money or experience
> before you can stand up and say, “I can do
> ‘x’ better than most people, and I deserve
> ‘$xxx.xx’ for that.” Because time is short
> most MSI people do things that require
> little in additional training, money or
> experience. The result is they choose to do
> things that become highly competitive areas.
> These ‘occupations’ have a low barrier to
> entry and attract many folks that are
> looking to earn an ‘easy’ buck. This is why
> the Internet is so popular with the MSI
> folks and the ‘Work at Home’ people. But the
> flip side is competition drives down the
> profits for everyone…good, bad or
> indifferent. Sure a few people catch
> lightning in a bottle and make out extremely
> well but the rest of them? Profitless
> business. I don’t think this is a good way
> to go.

> Many MSI make things even worse for
> themselves by trying to do things that
> require totally different skill sets. The
> most successful MSI people like Jay Conrad
> Levinson tie their many MSI projects
> together with a common thread. In Jay’s case
> it is his marketing skills.

> The next problem facing those looking at MSI
> is that many are forced to exchange time for
> money rather than a skill set for money,
> which is much less time intensive. Time is
> the great equalizer, you can spend your time
> earning $x per hour or spend it earning $x +
> $y per hour. Quite often to get both ‘$x and
> $y’ you need a higher skill set, i.e. more
> training and better teachers (better
> experience).

> The trouble is (I believe) that our inherent
> tendencies and circumstances keep many of us
> from improving enough in one area to earn a
> substantial income much less trying to
> become good enough in multiple areas in
> order to earn a cumulative high income.

> Face it most of us (I’m raising my hand!)
> have limited attention spans which makes
> learning (and mastering) very difficult. The
> time thing is a big deal also, heck how much
> time do you think I spent thinking about and
> typing this post? That time I used was
> robbing another activity…and possibly an
> activity that I could use to improve my
> income greatly but I made my choice and have
> to live with it.

> It comes down to the fact that if you want
> to be a successful MSI person you need to
> pick your occupations very carefully and
> hopefully they link together somehow so that
> your need to acquire the skill set demanded
> to earn income is as short as possible. Or
> hopefully, you’re involved in MSI activities
> that require virtually no time on your part.
> For example I market a variety of
> audiocassette programs, which I clear a few
> hundred dollars per month on. My $ per hour
> income from this occupation is about $50…not
> bad. But again the key is I spend very
> little time and effort on this.

> I’m not a very good MSI person, even though
> I still do derive income from multiple
> sources. I know my MSI tendencies have held
> my income back.

> We live in a ‘winner take all’ society. It
> is 80/20. And to earn a majority income you
> have to be in the top 20% as a ‘value
> creator’. Staying in the 80% will get you
> whatever everyone else is getting—and those
> are gains that are average or less. It takes
> effort to be a 20% performer and if you’re a
> practicing MSI person the time and resources
> available to you to become a top 20%
> performer will be limited…quite often
> severely. And to compound the problem many
> MSIers (again I’m raising my hand) start a
> project but never advance it to the point
> where it is producing income.

> The key to producing income (in my opinion)
> is specialization. Use the time, resources
> and teachers available to you in order to
> become a top 20% person. And if you have to
> be an MSI person, then actually finish the
> project before you jump into something else.

> Some might say that being an MSI person is
> ‘safer’. I don’t know if that is true of
> not. Personally I think being a top 20%
> value creator is easier. I say this from a
> pure business point of view. I work with a
> couple thousand different businesses in my
> part of the state and I can tell you 95% of
> those businesses (a variety of businesses
> from retail, manufacturing, wholesaling,
> high-tech, low-tech, small business, large
> business) do not come anywhere close to
> maximizing their potential. Many screw up on
> marketing, some on human resources, and some
> on a management level, some on an employee
> level. Many businesses succeed strictly due
> to luck or longevity. Any type of serious
> competitor could come in and take market
> share from these businesses. Maybe things
> are different in Australia but in the U.S.,
> most businesses are very vulnerable from my
> perspective.

> Over the last year I’ve cut my MSI
> activities down considerably. I follow one
> rule…one project in one project out. I’ve
> found for me this works best.

> The bottom is that I believe to earn $50,000
> or more it is easier as a specialist rather
> than a generalist.

> I thank you for your time,

> Mike Winicki

...was written by J.F. (Jim) Straw. You can read it on his web site: http://www.businesslyceum.com/tunnel.html.

This article is one of my favorites. Even though it is about focusing (or specializing), what he ends up describing is "multiple streams of income." In fact, I think it's almost a requirement that in order to have true MSI, you must focus -- that's the only way to earn more without increasing your time committment.

In my opinion, the most time-consuming aspect of establishing an income is the learning phase. That's why it's wise to take increased advantage of what you already have worked so hard to know.

-Phil

P.S. -- What do you do if your specialty suddenly falls out of favor? Don't abandon all your hard-earned knowledge, instead re-position yourself.