Self-Made Millionaires Have Their Eggs in Many Baskets

“Keep all your eggs in one basket, but watch that basket closely.” Warren Buffet

This is one of Warren Buffet’s most famous quotes. It is also one of the worst pieces of advice for anyone who is working on becoming rich. My father took Buffet’s advice without knowing it and in one night lost everything when his main warehouse for his business burned down. My dad had most of his wealth tied up in his business. We were considered wealthy at the time of the fire. My dad’s business was valued at around $3 million, which is north of $20 million in today’s dollars. We lived in a very nice house in Todt Hill, one of the most affluent neighborhoods on Staten Island. When my dad’s warehouse burned to the ground, all of that wealth disappeared into thin air. Our family struggled financially for the next 15 years, trying to recover from that nightmare; struggling almost daily to prevent foreclosure on our home. My dad told me later in life that he wished he had his eggs in more than one basket. That would have been the smart thing to do, he told me.

In my study of the daily habits of the rich and poor, I learned that most self-made millionaires generated their income from many baskets:

  • 65% had three streams of income
  • 45% had four streams of income and
  • 29% had five or more streams of income. Having multiple income streams makes a lot of sense.

When one stream is negatively affected by systematic economic downturns, of which you have no control, the other streams can come to the rescue and help you survive the downturn, without dramatically affecting your lifestyle.

Some famous examples of this multiple income stream principle at work include:

  • Ashton Kutcher – In 2009, Kutcher invested some of his Hollywood cash on Skype when it was valued at just $2.75 a share. Microsoft recently purchased Skype for more than $8 billion, making Ashton enormously wealthy.
  • Arnold Schwarzenegger gets most of his current income from real estate investments he made prior to becoming a famous film star.
  • Warren Buffet – Ironically, due to the diverse nature of the investment portfolio held by Berkshire Hathaway, Buffet actually is invested in 15 different industries. That’s a lot of baskets kicking off a lot of income streams.

Most people are not rich. And coincidentally, most people have one stream of income – their job. If you do not save and invest your savings in assets that generate additional streams of income, and you lose your job, you could soon find yourself living with a relative. Putting all of your eggs in one basket is simply a recipe for financial disaster. If you put all of your eggs in one basket and that basket breaks, what do you do?

How do you create multiple streams of income?

  1. Save, Save, Save – Save 10 – 20% of your net income every year.
  2. Expand Your Means – Start a side business or side career that generates additional income.
  3. Create Multiple Baskets – Invest your savings and additional income into investments that generate passive income such as: residential rental properties, commercial rental properties, TICS, triple net leases, seasonal rentals (beach areas, ski resort areas, lake front areas), equity investments (stocks, bonds, mutual funds), annuities, permanent life insurance, royalty-generating property (timber, oil and gas), boat rentals etc. If you can’t do it on your own, partner with others and keep building your portfolio of assets that generate passive income.

As I mentioned, three streams of income seems to be the magic number for the self-made millionaires in my Rich Habits study, but the more income streams you can create in life, the more secure will your financial house be.

 

Thomas C. Corley About Thomas C. Corley

Tom Corley understands the difference between being rich and poor: at age nine, his family went from being multi-millionaires to broke in just one night, due to a catastrophic fire that destroyed his Dad's thriving business. For fourteen years they struggled with poverty. There were eleven in Tom's family, and they lived in constant fear of losing their home.

Driven by the desire to unlock the secrets to success and failure, Tom spent five years studying the daily activities of 233 rich people and 128 poor people. He discovered there was an immense difference between the habits of the rich and the poor. During his research he identified over 300 daily activities that separated the “haves” from the “have nots.” Tom decided to write a book to share what he learned. That book, Rich Habits: The Daily Success Habits of Wealthy Individuals (1st Edition), went on to become an Amazon Bestseller in the United States forty times over a three year period. To give you some perspective, in order to be a true Amazon Bestseller in the United States, where you actually receive a specific Bestseller designation from Amazon, you need to be in the top 100 of all books sold by Amazon in the United States in a given day. Rich Habits did that for nearly thirty straight days, rising as high as #7, eclipsing such Bestselling authors such as Stephen Covey, Robert Kiyosaki and J.K. Rowlings. Imagine that - an unknown, first-time, self-published author selling more books than J.K. Rowlings!

Tom now travels the world, sharing his Rich Habits and motivating audiences at industry conferences, corporate events, universities, multi-level marketing group events, and global sales organizations’ presentations and finance conferences. He has even spoken on the same stage with famous entrepreneurs and personal development experts, such as Sir Richard Branson, Robin Sharma, Dr. Daniel Amen, and many others.

Tom has shared his insights on various national and international network, cable, and Internet television programs such as CBS Evening News, NBC News, Yahoo Financially Fit, Money.com, India TV, News.com Australia, and a host of others. He has been interviewed on many prestigious nationally syndicated radio shows, including the Dave Ramsey Show, Marketplace Money, and WABC.

Tom has been featured in numerous print magazines—such as Money magazine, Inc. Magazine, SUCCESS Magazine, Entrepreneur magazine, Fast Company magazine, More magazine, Epoca Magazine (Brazil’s largest weekly) and Kiplinger’s Personal Finance magazine—and various online publications, including USA Today, CNN, MSN Money, SUCCESS.com, Inc.com, and the Huffington Post. Tom is a frequent contributor to Business Insider, Credit.com, Bankrate.com and a few other media outlets.

National publicity has garnered international media attention for Tom and his Rich Habits research spanning 23 countries. Broadcast media, online publications, and television throughout Asia, the South Pacific, Europe, the United Kingdom, and Central and South America have shared his powerful message.

In an effort to help parents, grandparents, teachers and adults become success mentors to the younger generation, Tom released his second book, Rich Kids: How to Raise Our Children to be Happy and Successful in Life in 2014. This book was the self-help category winner of the 2015 New York Book Festival and Runner-up in the prestigious 2015 Writer’s Digest Self-Published Book Awards Contest. In 2016 Tom released his third book, Change Your Habits, Change Your Life. This book provides the latest science on habit change as well as more of Tom's unique research on the specific habits that helped transform 177 ordinary individuals into self-made millionaires.

Besides being an author, Tom is also a CPA, CFP, and hold a master’s degree in taxation. As president of Cerefice and Company, CPAs, Tom heads one of the premier financial firms in New Jersey.
 
Phone Number: 732-382-3800 Ext. 103.
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