Adopt a Dynamic Concept of Income

People who are successful with their money, people who increase their incomes faster than others, look at income in a whole different way than those who are less successful. This article explores one of the most important ways in which this is true.

Think About Income in a Whole New Way

Most people live paycheck to paycheck. They have debts up to their eyeballs. One of their most unhappy expressions is, “I can't afford it.” And particularly relevant to this series of articles, their income only increases roughly proportionate to inflation, sometimes a little better, often a little worse.

If you want to be different than everyone else when it comes to money, if you want an income that increases more rapidly than others, you have to think differently than everyone else. If you don't want to think differently than everyone else, you will have to live with the same financial results they get.

For real success winners adopt a dynamic concept of income. They do not see their income as coming only from their job. Or from any single source. They learn to generate income from multiple sources and often earn more from sources other than what outsiders see as their careers.

Single Source Income is Always Limited

It is surprising that more people are not aware of the limitations of single source incomes. Even a brief consideration of the plight of others who follow that path shows many unfortunate examples of financial failure.

Many jobs are very tenuous; they may unexpectedly dissapear. Some are very public. Look at the athletes whose careers end abruptly and they have no money because they spent all they earned and developed no other income. The same with some politicians or entertainers.

Others are less public. In recent times many people have lost jobs due to economic conditions. And because all their income is from one source they are at a loss to provide for themselves and their families. Some may come back. Many never will.

But these are not the only limitations. Many career paths lead to jobs with limited income potential. They may pay well enough compared to other occupations, but whether a teacher, a pharmacist, or a postal worker, while there is income growth there is also a fairly structured cap.

Examples of Dynamic Incomes

Over the years I have watched successful people produce significant incomes as a result of adopting a dynamic view of income production. Look around and I am sure you can find some among your acquaintences although the truth is most of them are quietly developing their income without a lot of fanfare.

An example: One man I knew operated a small business in which he earned enough money to be one of the leading citizens in his small town. But unknown to most people he knew, he slowly bought up low income houses. By carefully choosing tenants and offering them free supplies for any improvements they wanted to make on the homes he vastly improved the worth of his investments. The last time I spoke with him he had over 70 of them, producing a substantial income.

Another example: A man I was associated with ran his own business quite successfully, but he incidently leveraged his success to work as a consultant to other professionals. In the course of that activity he sold personal development and sales training programs. He earned a great deal of money in this way.

Yet another: A doctor friend of mine also invested in real estate. He didn’t have time for residential management but he ended up owning numerous commercial properties. Another example of dynamic income production.

Major amounts of money were made in each of these cases in addition to regular income. Not everyone will achieve so much, perhaps, but everyone can learn to find a variety of ways to produce income. Some will want to add on what amounts to side businesses. Others will get ahead by growing their own vegetables in a garden. Many will start investing in mutual funds. The opportunities are unlimited.

Applying the Dynamic Income Principle

Dynamic means powerful, but also flexible. It does not mean everyone should have more than one career. Some careers offer unlimited income potential. And often people just want to focus all their attention on one job. Fine, but then invest a substantial amount of income in mutual funds or other income producing opportunities that are not demanding time wise.

Some people prefer to work for nonprofit and other organizations, or even businesses, that produce lower incomes. Fine, but then set aside part of your time for earning additional income elsewhere. And keep in mind that as long as you are putting a sufficient amount of money into your Roth IRA or other retirement vehicle, and choose to live within the income you have available, you do not have to earn large amounts of money to become financially successful.

Often it is possible to earn a little money from a larger number of sources. Many people hold two or three yard sales a year. A man down the road from where we lives sells lawn tractors from his front yard (one or two at a time so he doesn’t appear to be “in business.”

Conclusion

There is no one right way to apply this principle. The critical thing is to separate income from job in your mind and see that you can earn money in many ways and they all count. If you want to make most of your money from your job. OK. But keep your mind open and you may find that it is quite amazing how much you can generate in other ways as well.