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Multiple Streams of Income: What it is?

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Have you ever heard of the Octopus Approach OR the Multi-Armed Approach of doing something? It simply suggests that one does not need not to be fully concentrated on just one work to make it their living, in fact one should work on different capabilities of theirs and create multiple sources of work and thus in turn Income.

Doesn’t it sound awe-inspiring to have more than one income source? You already have one source of work with a steady flow of income and then you are creating more and more work for you with more income for you. Who does not want to have lots of money in their bank accounts floating all around? For the person who values financial security and their ultimate dream is financial freedom, creating more than one source of income becomes a necessity not just desire.

It has been always observed that diversity wherever persists balances the nature, same rule applies with the money as well. When an income source is diversified, it becomes feasible for a person to fight with the crucial situations of life and to protect their loved ones from ups and downs of life. Diversification of income becomes important because if one source of income dries up; you still are running everything smoothly with the other sources of income and it keeps your life going without hitting your financial situations massively.

Are you aware of the fact that an average millionaire has 7-8 different sources of income? Experts believe that building multiple sources of income is a prime factor that distinguishes a person from others who is not running in the race of achieving financial freedom.

Key to Wealth is Generation of Multiple Sources of Income:

The term Multiple Streams of Income in a way voices and explains itself.  It’s the theory of earning more than one type of income from more than one source. Generating multiple sources of income is a key to wealth creation, it becomes even more special when you’re doing it with a passive income which does not really require a lot of time and efforts from you (We’ll talk more about that later).

You might have heard of this very famous phrase, “Don’t put all the eggs in one basket”. Making money via just one source keeps you at risk all the time and also puts limitations on what are you going to make out of this money.

I am making money from multiple sources for five years now, and I’m continually on the lookout for more and more. I own few businesses, but things were not easy on this path. For establishing a business or even thinking of the same one needs to be financially ready. For this you can refer to a section: How to be financially ready to start a business? But somehow you realize that you do not have enough money to start the big business you are thinking about, here are few ideas as to how you can start some low investment businesses: Special 21 small business ideas with low investments

Has this thought ever struck you mind as what if your boss fired you overnight, what your course of action would be? I guess the answer is NOTHING! You have no monthly pay checks coming in, how are you going to put roof above your family’s head? How are you going to manage the bills payment? What would you feed to your family? An answer to all this lies in darkness…complete darkness in that situation. But I have answer to this question, because I am my own boss managing multiple things and earning from all of them at a time, losing one would not be that big deal to me.

You might be thinking one job makes you exhausted by the time you come home from work, how can you create second, third, fourth one and work so efficiently for them. You have to find out ways of creating multiple sources that are suitable for you and can add steady flow of income in your monthly salary basket. It could be as low as INR. 100/- per month but has to be steady.

Hope you would have read the book “Rich Dad Poor Dad” written by Mr. Robert Kiyosaki, he has classified income into four types:

  1. Employee Income: This income almost everybody earns via a job. To cut it short if you are working for someone as an employee, you are making an employee income for yourself. This income carried the maximum risk with it, since all the decision making powers are in someone else’s hands. Once they decide to let you go, you would not make a living until you find another employee income.
  2. Self-Employed Income: This is a big shot played by you, where every shot is decided and executed by you. Where the success of your work is determined and expressed by your belief and performances. Yes, there are some demerits of the same for suppose you are sick or want a vacation; still you have to run the show and cannot be completely unavailable for a long time from your establishment.
  3. Business Income: Contrasting to the self-employed ones, the business owners do not do all the work on themselves. In fact they get things done by different set of people working for them and they run the business. They create a system which then functions smoothly even with minimal supervision. This calls for a much less risky position and allows you time to build more and more income sources for yourselves.
  4. Investor Income: This is the apex of income that one can achieve, you just have to live off your investments which you do not have to work much for once you have researched it thoroughly. Investors generate money by investing in other businesses, dividend paying equity shares, rental possessions, and other investments that need lesser amount of work. This work provides unlimited earning potential as they build their wealth as much faster rate than any other income categories.

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You know me from a very long time and have been reading about my ideologies as well. Let learn about my own income sources just classified on the basis of above grouping:

  1. Employee Income: I am an employee to an organization. I work 5 days a week as a Business Development Manager there.
  2. Self-Employed Income: I have a blog where you are reading this column, this pays me via Affiliate Marketing, AdSense, Paid Links, Sponsored Posts, Product Reviews and Advertisements etc.
  3. Business Income: I and my wife (you guys can refer to , if you want to know more about her) own a Pre-School franchisee and our employees are producing income on the behalf of the system that we have created there.
  4. Investor Income: I am a follower and practitioner of world’s greatest investor Sir Warren Buffett and do investing in equity stocks, mutual funds etc. Whatever dividends and profit I receive from my equity shares and mutual funds, I reinvest them in buying more and more stocks for multiplying my wealth at a faster rate.

So, the soul of this column is to let you all know that I want to live financially burden free and want to achieve financial freedom. So that I do not have to work every day with my both the hands to produce money and can take off whenever I want.

Now that you have come to know what Multiple Sources of Income are! In my further posts, you’ll see more of such content explaining WHY is Multiple Sources of Income necessary and HOW it can be made possible for each and every one.

Vikas Agarwal
the authorVikas Agarwal
Vikas Agarwal is an IIT-Varanasi graduate in Chemical Engineering. He is the Founder and CEO of - an investment advisory website. He is a Business Development Professional but a Value Investor at heart. He writes articles on Finaacle, which focus on simplifying the art of investing and the causes of human misjudgment when it comes to investing. He also shares his experiences as an investor and lessons from some of the greatest investors of all time.


    • Hi Nizam,

      Nice to hear that you are eager to start business. Let me know if any way i can help you.

  • Dear Mr.Vikas Agarwal

    Thank you very much for using the analogy of an octopus to explain the useful concept of multiple streams of income.

    Kindly permit me to add that you had mentioned only active other streams. Besides the active sources, we should also concentrate on passive sources like dividends, interest and rent. These passive streams are generated through investments.

    In the end, your article is very interesting and useful.

    Thank you,


    • Very Rightly said on the passive income. As passive source of income gives you freedom of time to work on other sources of income.

    • Hi Vijo, Its nice to hear that you want to build second source of income. Its easy to build second source income as you need only 2 things for it: Burning desire and fearless action. Let me know if i can be of any help to you in any manner.


    • Sorry Vinay, but usually i dont share my portfolio. As i strongly believe we should focus on learning and fundamentals.

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