WATCH THIS Before Building Multiple Income Streams

It's been constantly said that in order to get really wealthy, you need to have multiple streams of income. We've also mentioned this in past videos. Ideally, you should aim to have around three to seven individual streams of income to be safe. But here's something very few people understand: you don't get rich by having multiple streams of income. You stay rich by having multiple streams of income. But you need to get rich in the first place, and there's another way to do that.

Welcome to Alux. Now imagine you're alone in the woods. It's cold, it's scary, and you have to survive the night. So what do you do? Do you build four fires and sit in the middle of them, or do you build one big one that will last you through the night and sit next to it? You see, it takes the same amount of wood to build one big fire as it takes to build four smaller ones. You might think that having four fires is like a fail-safe in case one of them goes out, but since all of them have a lot less wood than a big one, they all have an equal chance of failure. On top of that, you need to start the fire four times instead of just one time.

Now, we don't know if you've ever tried to start a fire without a lighter, but it's not that easy. So in this case, building one big fire is both easier and more reliable. Only after you build a long-lasting fire that keeps you warm and safe do you then have the room to take care of other things. And as this fire, there is a heat stream. Cash flow is an income stream. You need one decent reliable one first before you can make another one.

To better understand this, let's look at different stages of how money is being made. Stage one: from zero to one hundred thousand dollars a year. This is the only stage that most people will ever find themselves in throughout their life. How many of you saw six figures in your bank account at any given point? You see, most people think that in order to make six figures a year, you need to have multiple income streams that together will get you to that amount. But that isn't exactly true. It can be done, but it's the harder way, not the easier way.

Now here is an industry secret that most people don't realize: it takes the same amount of work to make 100K a year as it takes to make a million. Just think about it for a second. If you want to 10x your income, you can't be working 10x more. It's impossible. If working 10 hours a day makes you 100K a year, you can't assume that working 100 hours a day will make you 1 million because, look, for one, there's only 24 hours in a day and you need to sleep and eat too. And secondly, there's no correlation between volume of input versus output. The answer lies in scalability and growth, not in the number of things that make you money. It's pretty hard to build an income stream versus growing an already existing one.

So for your first 100K in a year, it's more reliable to focus on doing just one thing and increasingly better and for higher returns. Now you can pick an income stream from these three categories: having a job, being an independent contractor, or building a business. This is it; there really isn't another way. Any of these can get you to 100K a year in varying degrees of difficulty.

For a job, that means getting promoted to an executive position where your responsibility matches your yearly salary. For an independent contractor, it means getting better clients and higher prices. As for the business, it means having a better model with a higher profit margin. If your job pays you 20K a year, you can't have five jobs at the same time. People who have multiple jobs do it to survive, not to get rich, and that's a different topic. If as an independent contractor your projects make you 20K a year, you can't take on five times more since you just won't have time. And if your business barely pays you minimum wage, well, that's the cost of doing business in the first years. Starting five different businesses with all of them barely surviving isn't exactly the smartest call you can make.

So if multiple streams of income are not the answer to getting your first six figures in the bank, when should you think of them? Well, after you make your first six figures. That's a pretty good rule of thumb. Once any of those categories get you into a position where you can get six figures constantly each year, then you can start thinking of adding additional income streams.

But there's one very important thing you need to do first: you need to automate your initial income stream. There's no point in starting new ones if the first one still eats eight to ten hours of your day. You need to find a way to maintain your initial income stream with a decrease in your involvement. Can it still run without you being there? For a job, that's a bit more difficult, although we've seen people automate their jobs without their bosses even knowing. That's a different story for a different time.

But as for being an independent contractor, that means hiring more people and getting more clients. And as for being a business owner, you need to build up a team that can take care of things internally as you go out and build new income streams, either within the business through different products and services or through another business. The important thing to remember here is that if you cannot automate your initial income stream first, starting a new one might not be the best call. Automate the first income stream and then build the next one after.

Now before we move forward with the video, we want to give you a special offer for Black Friday. We want each and every one of you to find yourself in a better place next year. To help you get there, this Black Friday, there are three bundles available at a special price: Goal Mastery plus one of your favorite Alux courses for only $5.99 instead of $750. Even better, and this will only work until Cyber Monday. Use the promo code EXTRA100, and you'll get an extra $100 off the already discounted Black Friday bundle deal. We're limiting this to 100 people only. Basically, you get Goal Mastery plus the course of your choice for free. You're welcome, Aluxer. Use it wisely.

Now, obviously, this is not an absolute rule since nothing is ever black and white, but it's a really reliable framework to base your financial future on. Now there's an important caveat to mention here. Some people manage to couple those three categories together to have multiple income streams, and the most common combo is having a job and being an independent contractor. This is what people refer to as having a side hustle.

Now, the reason they do this is to transfer the main income from the job to their independent work. They're doing this because it's easier to scale as a freelancer than to get promoted as an executive director in a corporation. So this is how you actually build an income stream, and it's the same way with your third, fourth, and so on. The only exception to this rule is real estate. You come up with a down payment, you get a place, you charge rent. It doesn't involve you being there after that purchase is made, but it can take years until that place will pay for itself. It's an investment first and an income stream later.

And speaking of investments, are they considered an income stream? Well, it's a little bit more complicated than that. Investing is a stream of income when you have a considerable amount of two things: money and time. The average annual return on stocks is 13.8 percent. That is if nothing catches fire. For example, if you were to sell stocks today, you would be losing money because we're at the verge of a recession, and most stocks go down big time. As a matter of fact, we did a video on major stocks that are down more than 50 percent. You should check it out after this video.

But back to the point. Let's imagine all things go well, and you get an average 13.8 percent return on whatever you invest. 13.8 percent return on one thousand dollars is one hundred and thirty-eight dollars, and you ain't retiring with 138 bucks. So for starters, you need a fairly decent amount of money to begin with so that returns add up to anything worth mentioning. And on top of that, you need time. You see, you can get 13.8 percent this year and negative forty percent next year. If you need cash right away, you're in tough luck, my friend. You need to afford enough time so that positive returns can compound on each other. We're talking like ten years plus.

So should you disconsider investments altogether? Well, of course not. After all, it's free money. And on top of that, there is another reason why financially educated individuals invest their hard-earned cash, and that is to safeguard those dollars and protect them for the future. This year, the U.S. saw one of its worst cases of inflation, and other countries are even more hard up. Things are not looking very pretty out there. So what financially smart individuals are doing is acquiring assets that are recession-proof. And one such asset is art.

We're talking blue-chip art here, not what your kid draws on the fridge. Now blue-chip art means high-value art that's expected to increase in value regardless of economic ups and downs. The only problem is, unless you're a millionaire, investing in art has been nearly impossible. And this is where our partners at Masterworks come in. With Masterworks, you can invest in artists like Banksy and Picasso for a fraction of the full cost because Masterworks qualifies their paintings with the SEC, breaking them into shares so you can get a potential profit when they resell.

Masterworks' results speak for themselves. Five sales this year alone, with their last three returning 17, 21, and 33 percent net to their investors. With nearly 600,000 members, Masterworks has had paintings sell out in minutes and are constantly releasing more to meet demand. You can skip the waiting list by going to masterworks.art/alux or by clicking the link in the description.

Okay, so with all this being said, what's our advice? Find your thing and stick to it. You need to cover your minimum requirements first. You have a limited mental energy, and realistically speaking, you can't juggle too many important things all at once. It's just not sustainable. But after you find your thing and that thing starts to cover your daily living and you free up some mental space, then you can start thinking of building a secondary income stream.

You need to dedicate as much time and energy for this second income stream as you did for the first one. We've built multiple income streams, but we always stick to this formula: figure out the first one, then start another. If you spread yourself too thin, you're going to eventually half-ass everything you do because you just don't have enough time and energy. And we ourselves have fallen into this trap too. Back in the day, we started too many side projects at the same time, only to find ourselves trapped in a never-ending list of chores and maintenance just to keep things afloat.

What's your thing? We'll see you back here tomorrow for the Sunday motivational video. [Music]