“We have to be honest about what we want and take risks rather than lie to ourselves and make excuses to stay in our comfort zone.” ―Roy Bennett
Should Every Physician Have 7 Streams of Income?
Introduction | Having Multiple Income Streams
Having 7 streams of income is the secret. You know what deserves to be left in the last decade? The pre-conceived notion that slaving over a 9-5 job is the best way to get rich. We were raised to believe that the singular path to success is to “study hard, graduate from school, and get hired for a high-paying job”. Our generation has become so obsessed with working overtime and being oh so busy, as if not being so is considered a crime. It’s totally fine to be busy, but “how often are you busy” and “with what matters are you busy with” are the questions that deserve all the proper answers.
It’s about time we all get out of our comfort zones. It’s crucial to realize how time is such a valuable yet limited resource. You see, taking on more shifts or continuing to work on your days off should not be the answer to earning more money because it’s simply not sustainable. Trading your time for income can only get you so far. In order to build long-term wealth, the best thing to do is to trade less time for bigger income.
If you have been with us over the course of our other blog posts, having multiple income streams to generate wealth should be common knowledge by now. In this blog, we’re taking it a step further. Researchers have gone so far as to specifically identify 7 streams of income which will fast-track your journey to becoming a millionaire. After all, the goal is to achieve financial freedom as young as you possibly can, because what use are your millions if you are too old to enjoy them anyway?
The Benefits of Having 7 Income Streams
Why a Physician Should Have Multiple Streams of Income
Passive income streams make room for exciting opportunities and possibilities. Apart from releasing you from the stress and exhaustion of overburdened shifts, multiple income streams provide invaluable benefits which allow you to live a well-balanced and financially equipped life. You may think that sustaining a single stream of income is challenging as it is already, let alone 7 streams of income – but what multiple income streams do is make the process of getting rich faster and easier for you in the long term.
Having 7 income streams usually mean that you have a mix of both active and passive sources of income. While some demand bulk of your time, effort, and attention (these are your active income streams), most of them are awesome ways in which your money works for you without you having to dwell on them (these are your passive income streams). If you still need a bit of convincing as to why you should have 7 streams of income, here are some important reasons why.
- Passive income streams give you the freedom to lighten your workload.
- While being a physician is truly a noble, rewarding profession, it is a widely known fact that many physicians are either overbooked with appointments or overburdened with lots of clerical work. Physician burnout is real and has been a pain point in the industry for decades. Truth be told, a large number of physicians themselves deserve to be prescribed with much-needed rest and relaxation. The only thing holding them back is that their financial security is heavily tied to their job as a physician.
- Possessing a variety of income generating assets allows you to detach from your physician profession. You can take time off to rest or to do more of the things that you love, without having to worry about making enough income to cover your expenses. More importantly, you also perform better at work and are happier serving patients when you’re not bogged down with such a heavy workload.
- Your income generating assets release you from having to fully depend on your paycheck.
- By having 7 streams of income under your belt, you prevent your main source of income from being spread too thinly. You never have to worry about not having enough as long as you have multiple income streams. If anything, what the 7 streams of income teach you is the cycle of working for your money so that your money works for you. It’s all about finding the right mix of passive income streams that fit you best.
- Nurturing 7 streams of income cushions you from the harsh financial realities of life.
- In life, a cold, hard truth to be had is this: things don’t always work out in your favor. Clinic shifts are usually swamped with more paperwork than what you signed up for. Income streams dry up all the time. Some investment deals don’t materialize as they should. It’s best to have more than one stream of income so that money continues to roll in even when certain things don’t seem to be on your side.
- Having multiple income streams help you build your wealth.
- Rule number one to getting your first million: release yourself from the single stream of income mindset. Most people are wired to find a job, be good at their job, and keep their job. This is a surefire way to prevent yourself from being a millionaire. The millionaire mindset chases opportunities and envisions money outside of what is currently in front of him. It’s true what they say, that the rich do get richer. This is because the more money you have, the better position you’ll be in to earn even more.
Ways to Build Your Income Generating Assets
7 Streams of Income You Can Explore
- Earned Income
- This one is easy enough to understand – this is your regular job and most people’s primary source of income. Whether you work as a barista in a café or you clock in and out of an office, this type of income requires a certain number of hours to be met or a standard of output to be produced.
- There is nothing wrong with having a full-time job, one where you trade your time for income. In fact, earned income is an important first step to building wealth. Your salary is the source of your initial savings, which you will later on use to invest in passive income streams. What you must simply be conscious about is the amount of time you spend at work vs. the amount of money you are earning.
- The more efficient thing to do is determine how you can be more valuable at your job. That way, you increase your value without having to increase the amount of time you have to work. For example, if you are a sales clerk at a department store, the goal is to get promoted to branch manager. What most people get wrong is that they think they earn more by clocking in more hours but the income should come from what skills you can bring to the table. If you stick to clocking in as much hours as you can, you are restricted by the limited amount of time you have in each day. At the rate you’re going, you’ll have earned your first million by 40 years old…where’s the fun in that?
- Business Income
- Business income is when you earn money in exchange for a product or service. This provides a great mix to your multiple income streams because it builds your wealth faster and in larger increments. Ask the greatest businessmen of our time and they will say that a fool-proof way to succeeding in business is to identify a need or lack in a particular market and find a way to address that in the most innovative, creative way possible. Your vision in business should exceed far more than simply making profit. Trust us: create a valuable offering, make product quality and your customers a top priority, and the sales will follow.
- Interest Income
- You earn this type of income when you lend your money out. Some common examples include certificates of deposit, real estate crowdfunding, interest from a bank savings account, or even peer-to-peer IOU arrangements. Whether monthly or annually, you earn income by collecting interest from where your money is deposited. It is an effective passive income stream which many millionaires swear by. It’s as easy as stowing away your money somewhere and simply watching it grow on its own as the months or years go by.
- Dividend Income
- Considered as one of many income generating assets, dividend income is something you earn as a result of owning shares of a company. Investing in stocks is a very popular form of dividend income. The key is to buy stocks while prices are low and sell them once prices start to kick in. This is so that you earn more than what you originally paid for when you first bought the units of stock. If you feel that this is something you definitely need help with, it’s important to seek the help of a seasoned stock broker. For a minimal fee, they will invest your money for you and navigate through the stock market to get the best possible outcome financially.
- Rental Income
- This is when you invest in forms of real estate and rent it out to someone else. It could either be an apartment complex which you rent out to tenants or a commercial real estate building which other business owners rent out for their own respective businesses.
- Out of the 7 income streams, rental income may be one of the most powerful. Many millionaires can attest to this fact. This is because the values of rental properties are very subjective and can be manipulated to produce the best possible financial outcome. If you own an apartment complex, adding valuable amenities, like parking spaces and laundry provisions, instantly upgrades your property and gives you the power to charge rental fees a little higher than usual. Another major bonus? There’s a long list of tax deductions and exemptions you can take advantage of when it comes to real estate investments.
- Capital Gains
- This is a form of income you earn when you sell investments. These investments can range from high-ticket items such as luxury goods, real estate properties, to sole proprietorships. This doesn’t mean you should spend left and right, knowing you have the excuse of being able to earn capital gains from these investments in the future. Remember, your income generating assets should be carefully assessed and be premised upon a ton of research. That applies to all 7 income streams.
- Royalties or Licensing Income
- Many millionaires make money off of being creators of a product, idea or process. These ideas are considered your private property and other people cannot use them without your consent. Each time another individual or entity makes use of an idea which you have licensed, you get to charge them a royalty.
Summary | How to Make the Most Out of Your 7 Income Streams
Ultimately, having these 7 streams of income proves to be invaluable for physicians like you and I. Apart from the monetary benefits they provide, what’s great about these 7 streams of income is that they give you the freedom to live the life you want. It transcends the notion that your being a physician is your end all, be all. It also provides you with a sense of security against whatever life may throw at you, without having to depend on your job as a physician.
Having 7 streams of income may seem like a lot at first glance, but it’s all about finding the right mix. The underlying theme here is to not put all of your eggs in one basket. Explore your passions and strengths – where money comes easiest to you – and make the most out of what you got.
Here at PhysicianEstate, we welcome all physician entrepreneurs to learn about commercial real estate investments, rental property investments, and wealth generation. We encourage all physicians to eventually become real estate physician investors. We know a great deal about Who – What – Why – How.
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