Last year I wrote a post about the power of having multiple income streams. I advocated for the compound income phenomenon, which I think is very important for building wealth. If you’re not familiar with that article I recommend reading it first. So far using multiple incomes have continuously benefited my personal finances so I’m pretty confident about this theory 😉 I wonder why I haven’t seen it written about in any economic or finance book I’ve read yet.
Since my last post I have acquired yet another source of income. Rent 😀 Buying property and then renting it out is a common way to make income for many other people. So I thought hey, why not give it a try myself. Late last year as many of you know I purchased some land and rented it to a farmer. Golly! I remember being all kinds of excited when I became a landlord, especially when I received my first rental cheque in the mail. Such a wonderful feeling to receive money 😀
You said it Mr. Krabs (~_~) With the addition of a new land investment I now have a total of 5 income streams. As I’ve illustrated previously, each of my incomes benefit one another and they all feed off each other’s synergy to create new opportunities. The newly acquired rental income is no different. I was already aware of the vast opportunities in the agriculture industry through the research I did when I bought fertilizer and farming related stocks like Potash Corp, and John Deere. Then when I saw on the news that hedge fund managers were buying land in Saskatchewan it peaked my interest. So I did some research, most of which was just reading related articles on the internet with the help of Google. In the end I decided to buy a small parcel of land which planted the seed for my next income source 🙂 If I had not been a dividend stock investor I may not have even thought about pursuing this path and would not have any rental income today.
Below is a relative chart of my after-tax income for the last several years.
Q2 2013 is where I currently am. The last two columns to the right on the chart are only estimates. The reason why rental income is higher in the last 2 quarters of 2013 is because next month (September) I may be closing on another land deal. If it goes through as planned I will have more land and my rental income should increase (^_^) Shortly after I bought my first land last year and rented it out, I got a call from an elderly gentlemen asking if I
wanted to buy his farm was interested in a land that he wants to sell at an auction. It turns out that he is the cousin of the renter on my first farm (゜o゜) Egad, he found out from my tenant that I bought the farm, and now he wants to sell his farm 🙂 I won the auction and now we’re just finaling some paperwork to complete the transaction. The more income sources we have the more hidden opportunities we can unlock. If I had not bought the first farm, I would have never gotten the phone call which lead to me buying this second farm today. There’s also the added bonus that I don’t even have to look for another tenant because the existing renter has already agreed to rent the other farm as well. So once again we see the power of compound income at work here where one opportunity naturally leads to another 😀 The total value of multiple income is clearly greater than the sum of its parts because of all the intangible benefits 😀
Making additional money can be difficult at first, but it should get easier as we discover more and more streams of income. Most of us like myself start our adult lives with just one income, a salary. But over time we all have the ability to find new income streams. Some will only be temporary like a summer job, but others will be perpetual like rental income. We must hold on to those sustainable income sources and foster them with care, because if we do they will reward us many times over for the rest of our lives 😉