Money Sprout Income Stream Characteristics
The Money Sprout Blueprint is a set of guidelines created to help guide you through the process of building multiple income streams. The objective is to create a manageable number of side income streams that can help give you the financial freedom you are looking for.
Money Sprout income streams should have the following characteristics (explained in further detail below) –
- Low Maintenance
- Location Independent
- Cash Flow Positive
We want to create sustainable income streams whenever possible. If we are going to invest a lot of up front time creating a new source of income, then it needs to be sustainable.
For example, I have a goal to earn $500 per month as a freelance writer. I calculated that I would need to spend 1 hour each night of the week (Monday – Friday) to reach that goal. Based on my weekly schedule, that is a sustainable income stream provided I have clients to write for.
Now lets say I want to bump up my freelance writing income to $1,000 a month. If I keep the same rate, I would need to spend 2 hours each night instead or 1. As soon as I double my time investment into this income stream, freelance writing becomes unsustainable for my current situation. I could probably manage to spend 2 hours a night at the beginning but overtime it would not work and I would get burnt out.
One important note is that while 2 hours an evening dedicated to freelance writing right now is not sustainable – it could change in the future. Let’s say I free up some extra time in my day. Then maybe I can devote 2 hours or even 3 to this source of income.
Low Maintenance Income
Money Sprout income streams should be low maintenance over time. This is not to say you shouldn’t be spending any time on them. However, a Money Sprout income stream should become low maintenance overtime. Maybe that means hiring staff to manage the income stream or automating the process as much as possible?
A good example is earning dividend income from stocks. I currently own several dividend stocks that combined generate income every month. While I do spend time researching stocks and managing my portfolio, that time is limited. I am not spending 2 or 3 hours each day managing these stocks but maybe 2 hours a week instead. The point is that in order to manage and grow multiple sources of income – collectively they need to be as low maintenance as possible.
The whole philosophy around The Money Sprout is to diversify your income. You always hear people say to diversify your investments – well I believe you need to diversify your income too!
You shouldn’t put your financial security in jeopardy by relying solely on your job, the stock market, or anything else. Instead, create multiple sources of income that can support your needs in any economic climate. That way, if one income source dries up you should be able to rely on the many other sources to get you by.
Technology has made this possible for us. A Money Sprout income stream should be built such that it doesn’t rely on you being at a specific location.
You need to enjoy, or at least tolerate, working on the income streams you create. Even though we want to make them as low maintenance as possible, you still need to be able to tolerate managing the income stream. For example, if you hate to write – then starting a freelance writing service is probably not for you. If you don’t enjoy it, then at some point you are going to give up.
Cash Flow Positive
This should be obvious, but your income streams should be cash flow positive. There are obviously cases where you may need to invest some money to get a income stream up and running. For example, I spent about $50 on a new domain name and hosting package for my freelance writing business. However, in the first month of writing I earned that money back and am now cash flow positive.
Another example may be a real estate investment. If you are consistently spending more money maintaining a property than the rent coming in – you are wasting your time and money.