In the first of the 7 streams of income series, I want to discuss the most common stream. That stream is Earned Income. Working. This is at times the only stream of income we have other than a 401k or similar fund we blindly throw money into. It is what we are groomed to do. 40 hours a week for 47-50 weeks a year. Sounds like a deal? Well, without knowing of the other streams it’s this or no income at all.
Let’s see how we can use this stream to the best of our ability. What should we choose to do? What is the ultimate goal? What is our monthly budget? What should we do with our savings? How long are we planning on utilizing this stream of income?
We are going to start at the entry into the workforce excluding high school/summer jobs. You’ve either just completed high school, completed a certification program, apprenticeship, or college degree. What do you do? The most ideal action would be to gain employment in what you know. Use your diploma, certification, or degree. Otherwise, you are starting from scratch as a worker and in a new field. One struggle is enough. Now, you are in the rat race that earned income puts you in but you are new to it so it seems fine. This gets old quick. When the honeymoon phase of earned income is over you’ll need to find your “why”. This “why” will be your plan and will help you get through the days when you want to leave for lunch permanently.
What is your ultimate goal? If the goal is to stay with this earned income stream until retirement, you need to put yourself in a position to rapidly move up the ladder. Do you need more education, more certifications, more hours, need to jump from company to company? Do it. Do all that is required. If you’d like to eventually unplug and do other unconventional things you’ll need to budget.
Budgeting is important for all. Budgeting can be very simple. You open an excel spreadsheet, place your total income at the top, and list all expenses, spending, and savings. With unplugging in mind, this means heavily slashing that spending money and maybe shaving some of that savings to all be allocated to your next venture. Whatever it may be, your earned income will be your ticket to the new stream(s).
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Earned income is not the best way to make money. This is because you are required to trade time for money. We like to think that money is infinite and in some ways it is, but your time is not. You have 24 hours in a day. You must sleep 6 without production suffering. That leaves 18. You can dedicate 12-16 hours a day to work. You’ll have 2-6 left for life. Your income is capped at what you can convince or demand someone to pay for your services.
The issue is most, if not all, jobs that pay a decent salary will not allow you to work multiple jobs. Side hustles only. The main job will take 10 hours a day or more Monday-Friday with commute and prep. You’ll need to gain the discipline required to master time management. You will get home from a bad day and just want to go to sleep. You have to tell yourself you just put in 10 hours plus for someone else’s dream, you need to give yours at least 2. This is the earned income life. No worries. It can be temporary.
In closing, there is no shame in this stream currently being your only stream. It would be a shame if you desire something different and don’t utilize this stream to set yourself up for different. Consider this stream as the 101 of income streams. It is the prerequisite to others, the easiest to obtain, and does the least when it comes to informing you about the others. It’s a step. It can be your only step or your first one. Your choice.
Food for thought…You do the dishes.
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