How to Make More Money and Build Income Streams

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This guide is intended to provide readers with ideas, how-to tips, and resources to build multiple income streams and make more money. If you are interested in becoming less dependent on your job and earn your way to wealth, this is the guide for you. On the other hand, this guide is not about getting rich quick or making easy money.

Two Types of Income

There are many different opinion on how many types of income there are. Personally, I feel it comes down to two main types:

  1. Active Income (or Earned Income) — You are working for money. The key characteristic of active income is the cost of time. You must trade time (a limited resource) for money. If you stop, the income also stops.
  2. Passive Income (or Residual Income) — Money is working for you. This is the opposite of active income. Once you stop spending time on these income sources, the income flows don’t necessarily stop. Of course, there are varying degrees of passivity and it’s desirable to have highly passive income sources.

Here’s an illustration of active-passive income spectrum:

How to Make More Money and Build Income Streams 2

Your goal is to have more passive income, and depend less on active income as you grow older.

Seven Sources of Income

In term of sources of income, or streams of income, you want to build up as many as you can, especially the passive ones. Here are some sources of income…the exact categorization is not as important as the focus on building up many sources of income.

  1. Job Income – This includes your primary job, part-time job, second job, side gigs, etc. One important thing to note is that if your “business” requires your active participation, then it is a job. This is where you trade time for money.
  2. Business Income – This is any business that doesn’t require 100% of your active participation to generate income. If you can scale it so that you don’t always have to work for the business to make money, then it falls into this category.
  3. Investment Income – This is a huge category since there are many types of investment.
  4. Real Estate Income – This is an important investment and I think it deserves its own category.
  5. Royalties and Patents – This covers all the sales and licensing of intellectual properties and creative work.
  6. Inherited Income – If you’re one of the lucky ones that don’t have to work for your money….well, you wouldn’t be reading this blog anyway…
  7. Other Income – This is a catch-all category that includes income from Social Security, Pension, Unemployment, and anything else I can’t think of right now.

Did I leave out anything?

Your goal is to have as many sources of income as you efficiently can.

Alternative Income

Alternative income is basically a catch-all for any non-primary job income.

This phrase will make it easier for us to discuss the concept of income generation and wealth building since I don’t have to keep saying “all your income streams that are not from your primary job” — that’s a mouthful!

Most people have one job and may be a small investment portfolio and that’s it!

Having a healthy alternative income is an essential component of financial freedom…after all, you have to be able to quit your job in order to retire.

Alternative income is important because it increases your total income and accelerates your wealth building capacity.

How to Make More Money and Build Income Streams 3

As you can see from the image, addition income can be channeled into your income producing assets like investments, real estate, and business to generate even more income.

Your New Career

When most people think about career, they are thinking about their job. This is the wrong way to think. While your job is important early in your life, your career should be focus on building alternative income streams NOT building your job.


There are several advantages to having multiple income streams:

  • If you lose your job, your income disappear. If you lose an income stream, your income is lowered.
  • The higher you are on the job career ladder, the harder it is to find an equivalent paying replacement job.
  • Multiple income streams will help you reach your financial goals faster.
  • Multiple income streams give you a taste of financial freedom. For most people, financial freedom occurs when you no longer need your job to cover your living expenses.
  • Multiple income streams give you greater flexibility and leverage. You’re in a much more powerful position when you know that you are not 100% dependent on your job.

I believe that the concept of having a traditional career is dead (with a few exceptions).

It’s too risky to rely on one source of income, especially when most employers do not hesitate to cut jobs to make their numbers look good. It’s imperative for everyone to minimize their income risk by building multiple income streams.

The Time and Effort to Build Alternative Income Streams

I received several comments about time an effort it takes to build and grow alternative income streams. Why should you try to build another income stream when you could work a few extra hours at work to get the same amount?

Here are two good reasons to build an additional income stream, rather than work more hours at a job (or get a second job):

  1. Building your primary income (i.e., your job) takes a tremendous amount of time, effort, and money as well. Many jobs require a college degree and some require even more education and training. I think 4 years of college is a lot of time, effort, and money! Compare all of that time to spending 3 hours a day for a year to build an income stream that could produce $1,000 a month.
  2. Once you set up an income stream (particularly a passive one) you could shift your focus to other income ideas. For example, if you have $10,000 in a savings account earning 1% per year, you will continue to receive $100 a year even if you stop paying attention to that income stream. On the other hand, if you stop working, your paycheck will stop.

How to Make More Money with Multiple Income Streams

I have a simple framework that can be used to create multiple income streams. There are endless possibilities when it comes to business ideas, and you can apply this framework to many of them.

7 Key Factors to Building Successful Income Streams

Building multiple income streams is simple, but not easy. Based on my own experience, I feel that there are 7 key success factors:

  1. Passion — Do what you love.
  2. Proficiency — Focus on what you are good at.
  3. Patience — Don’t expect to see the desired results right away.
  4. Effort — Understand that some income ideas take more effort than others.
  5. Persistence — Not everything you try will be successful; keep trying.
  6. Diversify — Don’t stop at the first thing that works; keep looking for more and different ways.
  7. Little by little — Trickles of money from many streams combine to provide a decent amount of money.

For additional information, please take a look at 7 Key Factors to Build Successful Income Streams.

Become a Part-Time Entrepreneur

As we established above, it’s unwise to rely on one source of income and bet the farm on your career.

One option is to become a part-time entrepreneur. Being a part-time entrepreneur allows you to maintain your regular income plus benefits, while at the same time giving you the opportunity to explore and expand your alternative income streams.

As a part-time entrepreneur, you can afford to make mistakes and take on more risks. You can also go at your own pace as you develop your income streams.

For additional information, please take a look at Why Should You Become a Part-Time Entrepreneur.

How to Start Building a New Income Stream

If you are looking for a concrete place to start as you develop alternative income streams, here is my 4-step guide:

  1. Start with ideas related to things that you enjoy doing. Get away from the stuff that you do not like. You’ll spend a lot of time getting your business going, so you might as well do something you like.
  2. Create a proper business plan. Even if you have a very simple business, a good business plan can help keep you on the right track, providing you with direction. Small Business Administration (SBA) has some of the best resources on the web to get you started. At the very least, make sure your business is viable.
  3. Implement and execute. The best plans and ideas don’t mean a thing unless you can turn them into reality. It takes some courage and a lot of willpower to make things happen, and you need to be persistent in your efforts.
  4. Learn and improve. Even if your business fails, it’s a success if you learn something from the experience. Very few people are successful on their first attempt at starting a business, so don’t give up. Your task is to learn from past failures and turn that cumulative experience into an eventual success.

Income Ideas and Resources

To help you get started, I’ve put together a couple of list that could be a good starting point to help you zero in on idea(s) that you want to try:

What to Do With the Extra Income

Once you have extra money flowing in, it’s time to use the cash to help you achieve your financial goals. Here are some ideas:

  • Pay off debt
  • Start an emergency fund
  • Save and invest
  • Reinvest in your income streams to make them bigger and better
  • Research and start a new income stream
  • Buy a new income stream
  • Spend it and enjoy life


I’d love to hear your comments regarding this guide so that I can make it more useful.

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15 years ago

Interesting Article. I have been wanting to start something, but it takes so much time to invest in order to start. In some cases it is more time than I am willing to afford. I am more of a passive investor. I don’t have kids or a family so it makes it easier to start something. I think part of it is that I am scared of failure and how that will affect me. I know that I will hit something eventually. I know that 1/10 businesses fail, that is why I’m scared if I invest all of this time… Read more »

15 years ago

I definitely think that having multiple sources of income gives the greatest degree of real wealth. As someone currently working a full time job, a part time job and then some, I have to say that I really appreciate the slightly more passive forms of income from my investment portfolio. It still takes time to manage, but it takes less time than all the other work. I am hoping that in the future I can take the money I earn actively, and turn it into more passive forms of income. Thanks for the link to the 40+ ideas too, I… Read more »

15 years ago

Very interesting read, thanks for posting this. I too look at my bank account sometimes and wonder, “why is this balance so good when I earn minimum wage?”. Then I realise I earn money from various other sources: market researches, gifts from family/ friends and through ads on my website. It all adds up in the end.

15 years ago

Even with passion, it is a lot of work to develop other income streams. My passion is photography and I have two blogs but you know how many other photo blogs are out there. So I have them for my passion and if I am in the right place at the right time, they might develop as an income stream.

15 years ago

I am really trying to tap into the passive income section of the continuum you described and it is really turning out to be a lot of work! But I guess that is the pay-off, lots of work now for no work later.

15 years ago

Nice guide. I don’t know if having a career is dead, but you definitely don’t want to have a skill that is only good for small spectrum of jobs. Job-hopping seems to be the norm nowadays.

15 years ago

Agree. I once lose my job several years ago because of downsizing (courtesy of Macromedia, eventually bought by Adobe) and once thought how vulnerable anyone’s job is especially nowadays. It was then I started doing freelance web development jobs which did help me during the times I have no cash flow.

Your guide looks good,however you may want to add what to do with the “extra” money earned from multiple income streams. A discussion about savings, investing and retirement will probably make it the big deal 🙂

15 years ago

Fantastic article. I love content on multiple income streams especially focusing on passive income!

In pursuing my multiple incomes, I have created a blog which is earning a couple hundred bucks a month for me. Next, I created a second blog teaching others how to combine business and technologies such as blogging and email lists. Both blogs have very different business and monetization strategies, so I hope that through this sort of diversification, I can generate consistent income.

Thanks again for the great content. I look forward to reading more.

15 years ago

WOW! This was a great read post. I would highly recommend a book that I first read a few years ago about consulting. It gives excellent advice about using consulting as a way of generating additional income but then went into how to layer your services so that has a consultant you are also generating flows of income as a speaker, editor, writer, etc.,. . Unfortunately, I can not remember the name of the book or it’s author but I will try and locate it tonight and post the information. If I can not find my way back here tonight;… Read more »

15 years ago

#1 Passion and #3 Patience are in a constant battle with one another in my mind. I can have tons of passion for a new income stream, but giving patience at the same time, seems impossible. Any suggestions? Because you want to be consistent and not forget about it at the same time. I guess I just lack patience in general, but especially with trying to create a new business or a new income stream.

15 years ago

@Pinyo – Haven’t found the book Yet! Still searching but you are always welcome to stop by anyway. Be well!

Greener Pastures
Greener Pastures
15 years ago

I really like this article! Very pragmatic. My biggest difficulty is staying focused. There are so many things I want to do, and so little time! My blog’s been taking up a lot of my free time, lately. It was especially bad when I was first setting it up. I had to learn everything from scratch! It’s a blast, but takes time, for sure. I don’t know when the last time was I read a book that wasn’t about blogging or finance!


Anna Katherine
Anna Katherine
15 years ago

With our shaky economy, I definitely agree that having multiple fields of income is essential for stability. Relying solely on a 9 to 5 job is dangerous due to lay offs but so is subsiding only with your own business which could fall quickly with the economy. Another difficult balance comes in my opinion with starting your own side business – you want all the freedom of being your own boss but it is extremely difficult to build something from the ground up! I’ve recently found a compromise for my own life: I joined an internet marketing company called ViSalus… Read more »

Doctor S
Doctor S
15 years ago

This guide is unbelievable, I have been reading through it the last few days clicking all the links and taking down notes. I am determined to somehow find a way to generate an alternative income to help make life a little bit easier. This is the blueprint and I am not talking about HOVA. Thanks!!

15 years ago

This is a great post. I was just thinking about alternative incomes and I couldn’t have found this at a more perfect time. 🙂


Andrea Coutu
15 years ago

I think you’ve done a great job of outlining the difference between income you must actively work toward and income that continues to come in after you do the work. I also like that you indicate the value of a part time business. I run a site on becoming a consultant and I emphasize this to my readers — it’s okay to become a consultant a little at a time. Many of my readers have been able to achieve financial goals simply by running a consulting business on the side.

15 years ago

I think this article is very good! I have read Robert Allen’s Multiple Streams of Income and some other financial guides, and find that multiple streams is the way to go! I would like more information about producing income streams online however. I did find SiteBuildIt, which is a website and product that helps you to learn how to earn in ecommerce. Cheers.

doctor S
doctor S
15 years ago

Hahah HOVA is a reference to jay Z, he had an album called the blueprint!

15 years ago

Hi, I really appreciate the time you have taken to provide quality on your blog. Its rare now days..

I like what you said about

# Passion — Do what you love.
# Proficiency – Focus on what you are good at.
# Persistence — Not everything you try will be successful, just keep trying.

Its so easy to end up spreading yourself too thin and trying to cater to everyone and lose focus..


15 years ago

an alternative income is rightly a great way to provide financial freedom in the future. Debt and credit works on the basis that you are tied into a specific company or organisation for a number of years, but paying down your debts more quickly reduces your debt and gives you more freedom in the long term. Paying off a little extra now, means a saving a lot more in the future, as you pay less interest on it

How to Make More Money and Build Income Streams

by Pinyo Bhulipongsanon time to read: 7 min
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