Multiple Income Streams – Part One

Old Style Retirement Doesn’t Work Anymore

If you read this or similar retirement oriented blogs a common theme is that the old way of doing retirement doesn’t work anymore for most people. My father worked for the same company for many years as a middle class blue collar factory worker. He never made much money but when he retired he received his pension and health care. Between that, Social Security and some savings he did just fine for almost 30 years of retirement. I bet a lot of people are thinking “oh for the days…” Well those days are gone for most people and we all need to look at reality, and the reality is really not that bad!

What are Multiple Income Streams?

You hear the term “multiple income streams” thrown around a lot these days and it can get very complicated. But in its simplest terms it just means you get your money from more than one place, and it is the key to a successful “real retirement.” Most people will have at least a couple streams of income and some will have many.

What is passive income?

The term “passive income” is another term you will hear rather often. Writers argue about what it means, and whether any income is truly passive, but for our purposes passive income is simply income that you don’t have to spend a lot of time to get. Examples of passive income might be savings account interest or Social Security. Jobs and most small businesses are not usually passive income sources.

Income Stream Examples

The idea for a successful retirement is to have several income streams, and have the total of those income streams meet, or hopefully exceed, your budget. The advantage of multiple income streams is that if one is suddenly reduced you don’t lose all your income. Many retired people will have three – Social Security, investment income from your savings, and a job or business. Lets look at some examples.

Lots of Retirement Savings

This is the financial planners dream. You have lots of retirement savings. You may not need to work at a job or business at all. You may do volunteer work or work at a job or business solely for the self satisfaction it provides. Even here you probably have multiple income steams from multiple kinds of investments and Social Security.

Some Retirement Savings

Most people probably fit into this category. Your should have some investment income and Social Security. But maybe you supplement that with a part time job or business. The combination of the various streams adds up to a sufficient level to meet your budget, and maybe a little extra. Worth considering here is the possibility that as you get older you may not be healthy enough to work, so you may want to consider that in your planning.

Little Retirement Savings

In today’s economy many people find themselves in this position. Most of these people will need to keep working in some capacity. All is definitely not lost though and even here multiple income streams are the key. Maybe you work one part time job mostly for income, start a part time time little business that is very self fulfilling, and also collect Social Security. The idea here might be first to take great care of your health so working is possible and not too difficult, and second, to put away at least a little money so you eventually have some passive investment income as you get older.

Where to go from here

The topic of multiple income streams is much larger than this one short article can address. Look for lots more on this subject.