"Multiple Streams of Income" by Robert Allen 

Buy This Book


We used to be able to survive on one stream of income.  Today, it’s becoming difficult to survive on two. In the future, the volatile nature of a free market economy means you’d be wise to have multiple streams of income. Not one or two, but many streams from completely different and diversified sources.  

Prosperous people have always known this.  If one stream dries up, they have many more to support them. Ordinary people are much more vulnerable. If they lose one of their streams, it wipes them out and it takes them years to recover. 

A job does not give you security; it only provides a feeling of security. Assets and passive streams of income are what give you true security.  Working fore someone else is like trying to go up the “down’ escalator. The more you make, the more you’re taxed, so the more you have to earn to make up the difference and the more you are taxed. 

Even as an employee, you must learn to think of yourself as a free agent. You must become a one-person consulting business, leasing your services out to the highest-bidding team on a short-term contract basis.  You financial stability will come from investing 10 percent of your earnings on the side.  For that, you need to think like an entrepreneurial businessperson. 


The real key is to keep socking away the money.  Consistency, day in, day out.  Save. Invest.  Save. Invest.  It might be boring, it might be dull.  It might be hard to do.  No matter.  Just do it. How much you invest is not as important as consistently investing that amount over a long period of time.  

Setting Some Specific and Realistic Financial Goals 

First of all, you have five decisions to make about your money: 

Target:  How much money would you like to accumulate?

Amount: How many dollars a day can you squeeze out of your life?

Rate:  What interest rate can you earn on your invested dollars?

Purpose: What is your financial purpose? 

Ask yourself, “Why do I really want this money?  What is my ultimate purpose?”  Your moneymaking will be much more successful and meaningful if you have a clear purpose.  If it’s just “to make a lot of money,” you may find yourself one day with a lot of money, wondering, “Is this all there is?” 


Financial Target Worksheet 

What is my target investment goal?         $_________________ 

How much can I invest per day?             $__________per day 

How long am I willing to invest?             $___________years 

What is my target interest rate?            ?___________% 

Why is it important to me to achieve this goal?    _______________


The sooner you start, the richer you are immediately! If a few dollars a day can make you a millionaire, why aren’t all of us millionaires?  It’s because we lack the simple discipline to make small daily deposits over long periods of time, and because we procrastinate on starting. 

Waiting one year to invest a dollar a day will cost you $116,000 after 20 years. If you choose to purchase a new car instead of continuing to invest in your financial freedom account, 20 years from now you will have a very old car and $116, 000 less to show for it. 


Habits of the Rich 

  1. They plan their purchases in advance. As with airline tickets, the longer the planning horizon, the cheaper the purchase.
  2. They expect, ask for and often get a discount.
  3. They expect, ask for, and always get a receipt.
  4. They always examine the receipt for errors.
  5. They immediately write on their receipt a category number.
  6. They balance their accounts to the penny.
  7. They file the receipt as soon as they get home.


Setting up your filing system is simple.  Get 10 manila folders and number them from 1 to 10. At the end of the day, quickly file your categorized receipts into one of the 10 manila folders.  

  1. Giving
  2. Savings, Investments
  3. Taxes
  4. Shelter
  5. Household
  6. Auto
  7. Fun
  8. Insurance
  9. Debt, miscellaneous
  10. Business Expenses


The average millionaire spends a few moments more on each transaction, but saves 10 to 20 percent through careful shopping. Every receipt they collect and put against their deductions is worth an immediate 30 percent return on their money! 

The rich have a “Wholesale Mentality.” They buy in the off-season when the prices are much better and if it makes sense to buy in bulk, they do. They schedule their buying for the cheapest time. The rich capture the money they save.  

Eliminating your credit cards will automatically and almost effortlessly cut your living expenses by an average of 30% over the next 12 months. Why?  Because credit cards provide easy access to purchasing power. If you remove the easy access, you remove the temptation to spend.  Thus, your overall spending will automatically decline. 

They put it into an account that goes towards something specific rather than just spending on something else without thinking about it.


Fiscal Fitness Checkup Worksheet 

1.      What is your approximate monthly income?

  1. One a scale of 1 – 10, how stable is it?
  2. How much money do you save monthly?
  3. Did you contribute to a retirement plan last year?
  4. Do you reconcile your checkbook at least monthly?
  5. Do you categorize and track your expenses monthly?
  6. Have you paid any late charges in the past 90 days?
  7. What is the estimated value of everything you own?
  8. What is the total amount of all the money you owe?
  9. Do you own more than you owe?
  10. What % of your debt is for investment assets?
  11. What % of your debt is for consumer goods?
  12. Does credit card debt exceed 10% of your total debt?
  13. Do you have liquid cash equal to 3 months living expenses?
  14. Do you pay your credit card balance off every month?


Working From Home 

If you’re going to become a home-based entrepreneur, you’d better learn which businesses have the potential for creating lifetime streams of income and which ones are just dead-end ways to make a few extra bucks before they fizzle out and die.  Make sure your business is leading the trend, not following it. 

Don’t ever consider a business that doesn’t have expansion potential for addition streams of income.  If your product, service, or information isn’t distinguishably excellent or unique it will eventually become a casualty of competition. When times get tough, people gravitate to either price or quality.  Don’t get stuck in the middle.  That’s a sure formula for disaster.  And don’t compete with the rest of the world on price. Make sure the quality of your produce is outstanding…the best you can offer at a fair price.  This will give you a good chance of succeeding in the long term.  The more people who need it and the more often they need it, the more successful your business can become.  

You need to love what you do.  If you hate what you sell, you’ll never be any good at it. Likewise, if you hate selling, stay out of sales. 

When it comes to employees, hire slow and fire fast. 



Are you good at influencing others?  Do people take your advice easily?  Do you like to give recommendations to others? Would you be a good spokesperson for a specific product or service that you really believed in? Do you feel your ideas have enough value that someone should pay you for them?  Do you enjoy selling?  If so, you’ll probably be most suited as an intrapreneur. 

Do you see yourself as an artist?  Do you enjoy creating?  Do you like to entertain?  Are you good at creating solutions to problems? If you would probably be great as an extrapraneur. 

Do you enjoy organizing and simplifying information? Do you enjoy teaching?  Can you explain complicated subjects easily? Is it important to you to help others improve the quality of their lives?  Would you consider yourself to be an idea person, good at brainstorming solutions to problems?  Do you like to write?  Are you a good communicator?  Do you like to read?  If so, you are likely an infopreneur

Are you a good saver?  Do you like to squeeze the last ounce of benefit from every situation? Do you enjoy seeing your money grow while you sleep? Do you like to analyze numbers? Do you like to make deals?  Do you enjoy finding bargains?  Are you good at comparing differing projects to make a decision? Are you good at putting people or properties together? Do you like to turn a sow’s ear into a silk purse? Do you like to improve a deteriorated situation? Do you like to own things?  If so, you would be a good autopreneur.


Intrapreneur Skills: To Influence, to Persuade, to Lead 

An intrapreneur remains inside a corporation, not as an employee but as a consultant, commissioned salesperson, or part owner. For those who like the feeling of planning on a team, this is an ideal choice.

  • Insurance agents get residual business.
  • Securities agents get residual sales.
  • Network marketers get residual commissions.
  • Corporate managers get stock options.


Extrapreneur Skills: To Be Creative, to Entertain 

  • Songwriters earn royalties.
  • Actors get a piece of the action.
  • Singers and artists get royalties.
  • Game designers get royalties.
  • Celebrity endorsers get a gross percentage of profits.
  • Inventors get royalties.


Infopreneur Skills: To Organize, to Simplify, to Teach 

An infopreneur is a person who makes money selling information. The primary product is data, knowledge, skill, or specialized information.  This is where you turn your ideas, knowledge and experience into cash. 

  • Authors earn royalties from their books and tapes.
  • Marketing consultants get a percentage of profit or gross revenue.
  • Franchisors get franchising fees.
  • Software creators get royalties.
  • Internet content providers get advertising revenues and royalties.


Autopreneur Skills: To Analyze, to See Hidden Value, to Invest 

Unlike traditional entrepreneurs who create business that sell (as one of my associates calls them) “hard, lumpy objects,” the autopreneur is looking for ownership of automatic streams of income without hassle. 

  • Entrepreneurs generate business profits.
  • Saving account owners earn interest.
  • Investors get dividends, interest and appreciation.
  • Discount mortgagors earn interest.
  • Tax lien certificate holders earn interest penalties.
  • Mailing-list owners get rental fees.
  • Company pension plans offer income flow.
  • Venture partners get a percentage of profits.
  • Real estate owners can get cash-flow profits.

You don’t need to know 100% of the facts about money. You need to know only the 20% of the facts that will give you 80% of your results.  Focusing on a few critical activities will give you enormous leverage. Your goal is to be confident enough to launch at least one new income stream a year.  By doing this, you’ll generate amazing results even if others around you are drowning in details or paralyzed with fear. 



A machine in a factory broke down and an expert was called in to fix it. He took a few minutes to assess the problem, took out his hammer, and tapped twice.  The machine started up again immediately. He turned to the supervisor and said, “That’ll be $500 please.”  The supervisor, furious with such a high bill for so little work, demanded an itemized statement. The bill arrived the next day. It read as follows: 

Tapping with a hammer:           $     1.00

Knowing where to tap:    $ 499.00 

Total                              $ 500.00


Come, let me show you where to tap…. 



Strategy 1:  Riding the coattails of a single time-tested brilliant investor, the legendary Warren Buffet. 

Strategy 2:  Relying on the management of mutual funds with the best long-term track records. 

Strategy 3:  Relying on the financial advisors with the best long-term track records. 

Strategy 4:  Buying the lowest-price, high-yielding Dogs of the Dow.


The shorter your investment time, the greater your risk. On a short-term basis, you have about a 22 percent chance of losing all or part of your money.  If you’re going to be in, you’d better be in for the long term. Five years will lower your risk of loss to about 15 percent. A 25-year holding period has been shown to give you a zero risk situation. 

The time to sell is when the market is booming and everyone is investing. This should be somewhere between 10 to 25 years from when you first invested. 



In the past 10 years, out of 6,000-plus professionally managed mutual funds, only about 20 were able to beat the 10-year performance of the S & P 500 after fees and expenses.  That’s just one-third of a percent!  Now you know why they say a monkey has better odds than the experts. 

If you can’t beat the market, then buy the whole market – the mutual fund made up of all 500 stocks in the S & P 500.



Buy an index fund made up of all the stocks in the market. Odds are, with this approach you’ll do just as well as the vast majority of professional fund managers and perhaps much better. You don’t have to agonize for months over which stocks to buy and when.  Just choose one from the following list and forget about it for 10 to 25 years. 

The sooner you buy, the longer you have your money at work and the more money you have to compound.  Take 50 percent of your monthly savings and sock it away into your chosen index funds. Do this every month without fail for the rest of your life. Dollar cost averaging works only if you continue buying-especially during the bad times-and hold on until good times return.  If you stop buying during the bad times, you lose your advantage when things rebound. 

With dollar cost averaging, you don’t have to be smart. You can be a total idiot and still win. You just buy every month, month after month. You buy during the good times. You buy during the bad times. You don’t care what the headlines are saying. You ignore the experts on TV. You don’t get jealous when you hear that one stock (out of 10,000!) tripled in price that day. A lot of other investors also bought the one that dropped by two-thirds on the very same day.  You just blindly and ignorantly do what you have always done-buy, buy, buy! 

If you do this – even if you do nothing else described in this book – then in due time the floodgates of prosperity will pour into your life. The goal of this book is to open those floodgates much sooner. But if all of your short-term “hare-brained” schemes come to naught, this “tortoise” strategy will have you slowly giggling yourself toward a prosperous future. 



Put a firewall between each of your investment basins. Never dip into your long-term investments to fund a shortfall in your short-term investments and vice versa. Each is sacred, designed for a specific use. 

Just for fun, stop reading, fire up your computer, and log on to www.morningstar.com. Morningstar is one of the top performance-tracking services for mutual funds and stocks.  Best of all, it’s free.  ON the main page, scroll down to Tool Box and click on Fund Selector. When prompted, you want to scan All Funds for one-year returns. The top fund boasts a one-year total return of over 400%! The last fund on the list is over 100%. If you had picked any of these 20 funds, you would have more than doubled your money in that year.  Wow! But 20 funds out of a universe of over 9,000 funds is only one-fifth of 1 percent.  That’s like betting on a horse with odds of 500 to 1. Would you risk the rent money for that? It seems tempting though, doesn’t it? 

Choosing a fund based on a short-term track record simply doesn’t work. I fact, it might even be an indicator that this is the last fund you should be putting your money into. Excellent short-term results may be the clue that you should run for cover. 

EXPENSE RATIOS – All things being equal, the fund on the list with the lowest expense ration will probably have an edge in the long run. For exhaustive proof of this point, read Common Sense on Mutual Funds by John Bogle. 

INDUSTRY GROUP PERFORMANCE –All things being equal, the fund that has consistently performed in the top quartile compared to al other funds in the same market segment will probably have an edge over the next 10 years. 



Chasing the hottest advisors’ previous portfolios produces huge losses. When focusing on one-year returns, it’s virtually impossible to tell the difference between an adviser whose return was the result of genuine ability and one who merely was lucky. Before spending any money on an advisory service, look up www.hulbertdigest.com.  

Just as Morningstar tracks individual stocks and funds, the Hulbert Financial Digest provides a benchmark with which to compare an advisor’s long-term track record.  Mark Hulbert has been tracking the success of newsletter services for 20 years. He’s seen a lot of flakes come and go. He currently tracks the success and/or failure of over 450 newsletter portfolios each month.  Now you can compare the hype in their mailing pieces with the cold, hard facts of reality. 

If you have a large amount of money you want to put under management, check out www.moniresearch.com. (Trial subscription for about $55). Clients who wish to use a money manager who is a market time should put their money with the hot hands and the shooting stars. Spread your money over several such managers to reduce risk. Monitor their performance on an ongoing basis. If performance deteriorates (for whatever reason), leave and move the money to another manager.  As you might expect, the managers themselves dislike this concept, but in my experience this is in the clients best interests. 



Any stock investor, using his or her stock as collateral, can borrow up to 50 percent of the value of the stock to buy more stock. 


You likely can’t move into your dream home tomorrow. You may be moving through a series of homes, making handsome profits on each one, and parlaying your growing equities into larger and larger properties…until the day arrives when you walk out of the closing office with the deed to the home of your dreams. 

While the vast majority of sellers are inflexible in their prices and terms, a small percentage of sellers are highly motivated to sell. 

I call these highly motivated sellers “Don’t-wanters.” The don’t want their property…and are willing to do seemingly irrational things to get rid of it.  The secret to buying property creatively is to look for these don’t-wanters – the 1 percent of sellers who are highly motivated. Don’t be discouraged by the other 99 percent of sellers who are not flexible.  The process is more than mere bargain hunting…It’s hunting for the right kind of seller, then trying to determine if the property is a good value.  



D ivorce

O bsolence of property – needs major fix-up

N egative cash flow

T ransfered to another location


W rong management approach

A rrears in payments

N egative location

T axes

E state situations (deaths)

R etirement


C ompetition with neighboring properties

O ut-of-area owners

N eurotic fears

D ebts

I gnorance of investment principles and market conditions

T ime constraints

I nvestment capital – needs capital for another investment

O rnery parner(s)

N eed for status symbols (a new Lexus beats an old building)

S ickness


If you scan the preceding list, you’ll see that the majority of the reasons for motivation have to do with the seller’s personal situation as opposed to problems with the property.  Your goal is to find an excellent property in the hands of a seller with personal problems.  Then you attempt to help this particular seller come up with creative solutions to solve these personal problems. 

Before you get too excited, realize this: Only one in twenty sellers is going to have a problem this severe.  Less than half of these will own properties worth buying. So the odds are slim but not impossible. It’s pretty simple, but not easy. It’s a numbers business – like diamond mining. You run a ton of gravel through your machine in order to find a sparkling diamond. 

Some people become discouraged and quit too soon.  Here’s how I stay motivated.  Suppose it takes you 100 hours of searching to find a potential real estate deal, which you then buy for $20,000 below the market. How much did you earn for every hour you worked? $200/hr.  If you’re too busy to earn $200/hr, I’d say you’re too busy! 

Here’s another way to look at it.  You make 100 calls to find one good deal worth $20,000. How much money did you earn every time you picked up the phone? A cool $200!  You might have a fear of phone calling, but if I gave you $200 every time you made a call, would it help you overcome your fear? If I gave you two $100 bills for every telephone call you made tomorrow from sunup to sundown, how long would you take for lunch?



Each MLS listing contains a section called “remarks” or “comments” or “Miscellaneous information.”  

Here are some examples of words/phrases you’re looking for: 

“Owner transferred”

“Low down”

“No down”

“OWC (owner will carry)”

“Out of state owner”

“Can trade/exchange for equity”

“Take over payments”

“Lease option”

“Rent to own”


“FSBO (for sale by owner)”

“Must sell- make an offer”


Finding a creative agent is almost like trying to find a flexible seller. Most agents do not like creative financing – especially the nothing-down kind – because they falsely assume that no cash means no commissions.  Nothing down doesn’t mean there is no cash involved. In fact, there may be a lot of cash…It’s just not your cash. 

If you can work with highly creative real estate agents, you will find the process much easier…because they will understand what you are looking for – they will be on your side and not resisting you every step of the way. Actually, I find the resistance to creative financing to be largely a matter of ignorance and not of philosophy…They simply don’t know how to do it, and therefore they claim it can’t be done. So, if you’re planning on using a real estate agent, try to find one who is very creative and avoid anyone who seems to resist your desire to find a highly motivated seller. 


Focused wandering around 

Pick an area of town which you’d like to buy your next property. Start driving around this neighborhood on a weekly basis. Stop at every “For Sale” sign and ask what the selling price is and how they arrived at that price. If possible, get a feel for their … MORE TO FOLLOW


Buy This Book