Income Streams
I wrote a post last October entitled “Zero to Fuck You Money” describing a potential strategy to get to a level of wealth that you can live off of your portfolio.
I missed a key idea in that post and this post is basically a splinter idea of that topic. You really need a massive amount of money to make a reasonable income off of bonds. Probably, too much for most people to every get to in one life time.
What you don’t learn in economics class is this: really the goal is to have as many unrelated incomes streams as possible. Not to gain wealth.
This is very difficult to do though. But, you should reframe your perspective to look through this lens.
Most financial planners don’t say “get married because your spouse adds to you an income stream” or “have kids, put them through college because they will add potential income streams to your retirement plan” that is essentially what you are really doing.
I think this is really the most important lesson young people should learn. Our form of capitalism isn’t going away.
It doesn’t matter how much wealth you have if you can’t draw income from it. It doesn’t matter how much income you have if it can disappear in an instant either. Justine Musk learned this the hard way.
Dividends (much like restaurants) offer a seemingly consistent revenue but they carry hidden risk of rapid market depreciation. And most people buy dividends that are correlated.
If you are buying dividends you need to buy dividends in many sectors to make sure your income streams are independent of each other.
Double dipping in software development provides correlated not independent income as well.
One way to reach multiple incomes streams is through the arts. Ironically, something most parents try to steer their children away from. Right now being a creative prompt writer is the burgeoning in-demand field. Hard to have predicted this two decades ago when people were pushing their kids to stop writing Dungeons and Dragons campaigns and to learn Excel.
Now knowing Excel is totally unnecessary.
Pundits always say “if you had invested $10k in Apple in 2000” well I am going to do a similar thing here to reinforce this idea.
Look at Stephen King (or Piers Anthony. If you don’t know who Piers Anthony is look his Xanth series) Both of these writers’ wives allowed them to write their first book. I.e. paid the bills allowing them the time to write. I think Piers’ wife gave him a zero.
This is what 10000 hours is really about by the way. It’s not about the amount of practice it’s about the amount of support you are given.
Those first books sold and then many more followed. There was no guarantee either’s first book would sell so this was quite a risk. And one neither men could have made without that second income.
The income from their spouse.
Now think about it this way, each book a person writes and publishes, as long as it is in print, provides income. So Stephen King has 100+ sources of income from each book. And so does his wife. This is the power of copyright.
If you think about everything you do/make/build/etc this way it may be helpful.
If you are a carpenter and you make a jig. Consider taking a bit of extra time to make a template for that jig and put it online somewhere. Make YouTube videos of you making the jig. Don’t worry about quality. Just make it exist. You can always make it better later. This is the rule of the first born child or video game making.
If you work for a company and do something that makes your job easier. Think about how to turn that into revenue.
Take whatever it is you are good at and going to do anyways and try to turn it into new revenue streams. Even if you can’t do this very often practically thinking this way can make quite a difference.
This takes extra work that. And is unpaid labor of course. But, once you make a jig or a YouTube video it can make you income forever.
It’s very hard for people who are not already wealthy to invest in growing businesses so you have to invest in you most of the time.
But, really it means don’t spend money unless you can see whatever you are buying as a potential future revenue stream. Don’t tell a first date though…
I don’t like to leave posts up for very long because the market changes very fast but I reposted the original Substack if you are interested. The test account that was up 270% in that post as of today is up 423.44% (after pulling out to pay taxes in April.) This is also not the same account in this year Financial Competition.
It may seem crazy but I do have a plan with all these accounts. It’s just going to take a decade for me to prove a point.
Or fail to prove a point but either way there will be definitive certainty. I started this potentially stupid idea in 2022 so 6+ year left to go.
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As always, if you think there are spelling errors update your dictionary to the latest version. Happy speculation!
— AJ