7 Streams Of Income- You Must Have If You Want To Be A Millionaire In Your 20s

There’s an old English saying, “don’t put all your eggs in one basket.” It simply highlights the idea that one mustn’t risk everything for the success of one venture, which is what young people do when they depend on only one stream of income- SALARY.

Studies have shown that an average millionaire has seven streams of income- a combination of active and passive sources of revenue. They believe that spreading the income streams is an excellent way of earning more money, and it reduces risk even if one source of income fails.

So here’s a list of the seven streams of income that you must have in your 20s-

Earned income is the primary income stream through a job. Most of us start here, and many of us go no further. For the majority of people, earned income is very limiting. Thus, it has attracted the acronym, ’Just Over Broke!’

In simple words, you just earn enough to survive. Of course, some jobs pay exceptionally well, but these are exceptions, not the norm. 

You can earn some extra income, alongside the earned income, from the businesses you have set up. These are commonly known as your ‘side hustles’. The business income could be made up of just one source or multiple sources.

It is typically found among your balance sheets, taking the difference between profit and loss. By selling a service or product for more than they cost you is the basis of profit income. You can open a retail store, sell products online, or you can offer professional services and charge for your time.

If you have spare cash sitting in the bank account, it is losing its purchasing value since the interest rates are meagre these days. There are many alternatives that can put your money to work and earn a passive income stream. 

It is better to invest it in Mutual Funds or a savings scheme such as FD or RD and use the power of compound interest to gain an interest income. Buying government bonds is yet another safe investment that will generate interest.

Dividends are commonly known as a share of the profits. When you buy shares in a company, you become part-owner of that company and are entitled to dividend payments.

Well-timed investments in companies can generate excellent dividend income. You can split your profits into annual, quarterly or twelve-monthly dividend payments. 

Property investment is a great way of protecting your money. Once you own property, you can generate an income from rent as an added monthly income stream.

However, there are two downsides to this income stream. First, it requires a substantial investment initially, unless it is part of an investment scheme. Second, releasing the cash at times can be time-consuming and costly, so if you need the money quickly, this one is not for you.

Buying and selling assets provide you with an income known as capital gains. For instance, if you buy stocks and shares worth 500 and later sell them for 550, the capital gain is 50. 

It is generally advised to consult an accountant first about the capital gains since each country has different rules. Depending on the asset sold, the capital gains tax may wipe out all of your profit.

If you are a creative individual and are fond of producing music or photography content, it’s time that you turn your passion into an income stream. Licensing your content for specified public usage can help you create royalties as an extra stream of income.

Royalties are not likely to be significant on their own, but mass production usage of your content is expected to bring in a steady stream. 

So if you are in your twenty-somethings, it’s the right time for you to adopt the structure of 7 streams of income to fast-track your journey to becoming a millionaire. After all, the goal is to achieve financial freedom as young as possible, because what use is your millions if you are too old to enjoy them anyway?

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5 Money Mistakes To Avoid In Your 20s

Money mistakes in the 20s are inevitable. Unfortunately, schools don’t teach us financial literacy and money management like they do algebra. However, the financial decisions that you make or the spending habits that you develop in your twenties can affect your finances for the years to come.

So I am sharing a list of five common money mistakes you must avoid in your 20s, and your future self will thank you for it-

Most of the vicenarians spend each and every dime they earn. They indulge in the habit of living paycheque to paycheque- which sooner or later puts them into a precarious position-where one missed paycheque could be disastrous.

This is certainly not the position you want to find yourself in when an economic recession hits.

Therefore, PAY YOURSELF FIRST. When you have money coming in, make savings a priority rather than tackling it after every unnecessary expense is taken care of. Set a goal to first save at least 10% of your income each month for your long term priorities.

Another common money mistake that people make in their 20s is that they do not keep track of the expenses and end up spending above their means.

The simple solution is to LIVE BELOW YOUR MEANS. Remember, just because everyone else seems to be living above their means does not mean that you should too.

Track your spendings for the next 30 days. Knowing where your money goes can help you rein in your impulse spending. Also, strictly following a budget plan can help keep the spendings in line with the goals and priorities.

Money management is a lifelong journey, with lessons learnt at each junction. When unexpected life events occur, such as COVID-19, an emergency fund acts as an insurance policy.

Establish a conservative savings goal to allot at least 5% of your monthly paycheque to your emergency fund for six to twelve months. Then, to build it over time, increase the amount by 1% to 2% at regular intervals.

Building an emergency fund is like having an EXTRA CUSHION OF SAVINGS. It helps you feel secure, eases your financial stress and prevents you from dipping into your savings or getting into debt.

There’s always a reason to put off investing. It could be because you think stocks are overpriced or you are worried about another stock market crash, or perhaps you’re waiting until you’re on a better financial footing to get started. 

There is a significant risk in not taking any risk. Period. If you are not investing, your money is losing its purchasing power since the interest that it is earning in the bank is way too little to keep up with the inflation. 

Investing sooner always wins out over putting it off, as the saying goes – THE RIGHT TIME TO INVEST IS NOW! 

Many of us tend to develop costly habits like eating out too much, shopping for expensive products, partying, gambling, spending millions on an engagement or a wedding function, purchasing fancy cars, etc., in order to ”keep up with the Joneses”.

While it can be challenging to break bad financial habits, changing your environment or surrounding yourself with people who support your financial goals can make a significant impact in helping you break them.

Your twenties are a tumultuous time. From education to courtship, there’s a constant temptation to shell out hefty sums. But just because you have enough money does not mean that you need to spend it carelessly. Instead of spending millions on a luxury car in your early years or on a wedding function, be wise with your money and invest it in long-term goals.

I hope you’ll try and avoid these five money mistakes in your twenty-somethings and smoothly sail into your next decade, being financially sound and secure.

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How I Saved 1,00,000 Bucks in a Year

”The pandemic created a tale of two economies-

For some drowned in murky waters,

The others found themselves flooded with cash.”

The pandemic situation has been a scary wake-up call about how lives can be overturned with minimal warning. It caused many of us to re-evaluate the importance of saving and acknowledging the age-old thumb rule- to have 6 to 12 months of expenses saved as an emergency fund.

This lockdown experience is perhaps something none of us would want to relive. Nevertheless, if I had to take one positive out of it, that would be- that it made me monitor my costs and motivated me to set manageable short- and long-term financial goals that helped me save more than ₹1,00,000 in a year by cutting down the unnecessary expenses. 

Before the lockdown was announced, I used to order food online or dine out almost every weekend and alternate weekdays. When I reviewed my past bills, I spent around ₹350-400 on food each weekday and double or even quadruple the amount on weekends, which meant somewhere between ₹65,000-80,000 a year.

I have downplayed the numbers not to scare you away, but trust me, pull out your receipts, and you’ll be SHOCKED at how much you’ve been spending! NUMBERS DO NOT LIE!!!

When I first came across that figure, I was shocked because I thought I was ”living a normal life” until I realised how much money I wasted.

The lockdown helped me take a break from all that. Although I do treat myself with my favourite Penne Alfredo or Blueberry Cheese Cake once every two weeks or a month, I now have uninstalled all the online food apps and relish the homecooked food more.

I highly recommend you to review your food costs to see how much you’re spending! Remember, NUMBERS DO NOT LIE! 

Netflix, Amazon Prime, Disney Plus Hotstar, Zee 5… You name it, I had a subscription to it. During the first phase of lockdown, I binge-watched my favourite shows and movies for hours on a stretch which led me to feel sluggish and unaccomplished for the entire day!

It somehow made me question myself-

Do I really need to subscribe to 4-5 online subscription services simultaneously? Are they really adding to my productivity?

Of course, they put up exciting shows and movies, but if you have subscribed to a service for those ONE or TWO shows or movies, let me tell you, it isn’t worth your money. Subscription services might be a boon with the ’Auto Payment’ feature setup, but that is where the problem lies. You don’t realise when the money goes out of your account, and before you know it, your wallet is already begging for mercy at the end of the month.

After cancelling all these subscriptions, I was able to save approximately ₹12,000 a year. So, I’ll suggest you review all your subscriptions and cancel the ones that you use less frequently or not at all. There is absolutely no point in keeping it around for something that you MIGHT watch when you are free the next time around.

Find something productive to do during your free time rather than Binge-watching (I started Blogging), this way you’ll save money, you’ll earn more money, and you won’t miss your favourite shows at all! Also, If you can’t resist, you can always contribute and share a subscription with your friends.

As work from home became the new normal, there was no point in splurging on expensive foundation, concealer, highlighter, eyeshadow pallets or lipsticks. Therefore, I consciously decided to cut out on all the expensive makeup and other products from high-end department stores to save money.

I bought less and less of the beauty products by only sticking to a few essential ones- like a good sunscreen, a moisturiser, lip balm and mascara. 

I still look the same and never felt any prettier by applying or buying more makeup. The only difference is that I saved almost ₹10,000-15,000 by being more mindful and intentional with what I buy.

Last year I completed a Quarter of a Century, but the pandemic situation and the lockdown ruined all my plans of a ’Grand 25th Birthday Party Celebrations’. So it was a small cake cutting ceremony with just my parents and my best friend.

Everything was Home Made with Love. And, this helped me save a great deal of money.

My best friend baked me a cake, while my parents were in charge of snacks and drinks. So, I saved approximately ₹15,000-18,000, as there were no cake payment, no birthday outfit, no decoration charges, and no food expenses!

Just happy moments and togetherness! 🙂

During the pre-COVID era, I would walk into the store with no plan and buy on impulse most days. Which I later realised was a BAD MOVE!

It's those ”cute” random objects (ornaments, stationery, gifts etc.) that stops us from saving money!

If you’ve been at the Miniso Store or the Forever 21 checkout aisle, you’ll know exactly what I mean! Yes… they’re irresistibly cute, but let me tell you one thing… Being broke ain’t cute!

So when I went through a de-cluttering phase during the lockdown, I was surprised at how much money I wasted! A few bucks here and there adds up to a bunch of crap that doesn’t add any value to my life.

I could’ve saved that for an emergency fund, a nice vacation, or perhaps a contribution to my investment account. But as they say “Better late than never!”

I put up most of the stuff on a ’garage sale’ and managed to earn ₹11,500.

So, in total I saved-

65,000 + 12,000 + 10,000 + 15,000 + 11,500

₹1,13,500

(I’ve just taken the lower limits here).

Treat every penny you save and invest as a "worker" to grow into more "workers". The trick is to let the money make money for you, and you can just sit back and watch your savings grow without having to lift a finger. That's the power of being financially aware and saving money, for that's how people become a millionaire from nothing.

As we advance, when you’re about to buy knick-knacks the next time- that cost ₹99 or ₹199, ask yourself whether you’re willing to give up 99 or 199 ”workers” who could potentially create more workers for you.

This process compounds into something BIG and could leave you with a ton of money saved (without you even realising)!

I have been slowly saving and investing my money for more than a year now. As a result, my savings and investments have grown exponentially to more than what I could have imagined!

So my dear readers, before you buy anything, do yourself a favour and ask: ”Does this add any value to my life?” If not, don’t buy it, and you’ll save a ton of money!

Remember, each penny you save and invest is a ”worker” you keep. That ”worker” can magically make money for you. 🙂

Click here to download my fail-proof budget printables that can help you save money like a pro!

Last year I read many blogs related to the importance of saving and money makeover, and that is how I learned to create a budget strategy for myself. I then followed that budgeting strategy religiously, and that’s how I was able to build wealth and save over six figures.

To help you master your savings, I have created my version of a fail-proof budget plan-

The Budget kit includes printable ’monthly savings' and ’monthly budget’ tracker that keeps track of all your income sources plus expenses.

I’ve also made free printable ’weekly spendings’ that will keep your budget and savings on track and give you instant results to boost your confidence in your financial journey.

THE BUDGET KIT IS EXCLUSIVE TO MY READERS AND SUBSCRIBERS, SO GRAB YOUR FREE COPY HERE!

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