Multiple Streams of Income—Magic or Myth?

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