There are three paths to wealth creation:
- Living Below Your Means or
- Expanding Your Means or
- Doing Both #1 and #2
Successful, wealthy individuals do not rely on one source of income. They typically have multiple streams of income. They Expand Their Means. Creating each stream requires an investment in time and money and also involves taking some risk. In time, these multiple streams begin to generate cash flow that increases your income and your wealth. Expanding your means could involve a real estate investment, side business, pursuing something you are passionate about that can eventually create cash flow or investing in equities, bonds etc. Relying on one source of income, oftentimes your earnings from your job, actually creates more risk in your life. You could get downsized, fired or stuck in a job with very little opportunity for earnings growth. Living expenses do not go down; they increase, until you near retirement. At that point it may be too late for you to accumulate enough wealth on which to retire. Expanding your means gives you a shot at multiple streams of income before you near retirement age and can produce cash flow well into your retirement years.