The Importance of Multiple Income Streams to Build Serious Wealth – Part 1

Dr. Stephen R. Covey once said: “Strength lies in differences, not in similarities.”

Let me make one thing very clear, for me, trading is a business – not a hobby. You open your shop with the market opens and close it when the market closes (well sometimes you do the odd pre-market and after hours trading, as well).

If we are talking about business, let’s look into this a little further citing some research papers for you to do further readings. There will be number of parts to this series so stay focused…

Granted, there are numerous ways to become rich in the world today. One can take a variety of approaches to obtaining this objective, from the traditional to the more unconventional methods. The reality of the situation is that in the 21st century, the days in which an employee stays with one employer—which has a dedicated interest in his or her welfare—for numerous decades and retires with a sizable benefits package that is financially advantageous are decidedly gone. There may be a few physicians or attorneys who are able to accomplish such feats, although the instances in which they do so are becoming more and more rare. Instead, it is necessary for people to frequently leverage a multitude of different means to obtain wealth. In this regard, there is a paramount importance in leveraging multiple income streams to build serious wealth. A diversification of business interests is often required to produce such an outcome, as an analysis of wealthy entrepreneurs reveals.

Perhaps one of the best examples of this notion is found in the life and legacy of Steve Jobs – one of my business heroes.  It is critical to note that initially, Jobs began his career as a manufacturer of hardware—specifically desktop computers—when he launched Apple (Johnson et al, 2012). Apple would go on to become one of the better known companies in the world today, years after the demise of its founder and charismatic leader. However, even a cursory analysis of Apple’s diversification of business interests illustrates the fact that such versatility is essential to ultimately become rich. Whereas once the company was renowned for its computers, today it is much more better known for its iPhones and forays in the telecommunications industry. Jobs made a dedicated effort to shift the focus of his company many times, and in doing so was able to successfully diversify its business interests. Apple has substantial business ventures in hardware, software, telecommunications and the entertainment fields in the form of movies and animation (Kalla, 2012); as such, it is apparent that Jobs made a decision to diversify his business interests.

Perhaps the most cogent reason to diversify one’s business interest is that if one business fails, or one line of business fails, one can always rely on another to continue to generate wealth. Jobs choice to steer Apple into an incredible diverse array of business opportunities certainly indicates this fact. When Jobs first started with this company, desktop computers were cumbersome things that were the focus of the computing industry. However, as computers gradually became smaller and more refined, desktops gradually became obsolete. Apple was able to offset the potential losses and revenues that these computing developments created by finding different lines of business to engage in. One of the primary ways in which it was able to do so was to tap into the fledgling MP3 market with iPods (Finkle and Mallin, 2010). Prior to its advances in this line of business, CD players and those that could play MP3s were fairly dominant in this market. Under the direction of Jobs, Apple was able to revamp the marketplace by making iPods more compact and equipped to carry more songs than these other options. More importantly, the emerging market that it was able to help pioneer allowed it to shift its focus away from desktop computers and towards iPods. Currently, the company is much better known for its innovations and placements of iPods than it is for its traditional desktops, which allowed Jobs to continue to build wealth while focusing his interest from one line of business to another.

In many ways, Apple was able to achieve the same degree of versatility which kept its business from getting stagnant via its entry into the telecommunications market. In some ways, Jobs’ foray into telecommunications was related to his background in computers, since there were some components of the latter (such as operating systems) that were influential in Apple’s creation of the iPhone. Nonetheless, these gadgets that Jobs pioneered still serve a primary function as a means of communication in a manner that is much more direct and personal than that which conventional computers are able to provide. Telecommunications is a distinct industry from that of personal computer.

Therefore, even when sales of Apple’s desktops were lagging its diversified interests in both music players and iPhones were able to produce considerable revenue streams, if not help to create new additions to these respective industries (Austin, 2011). Jobs realized early on that the key to procuring personal wealth and that for his company was to simply expand and create as many different revenue streams as possible from different lines of business. He was highly successful in this endeavour.

An analysis of the business ventures of other entrepreneurs reinforces the viability of this concept as well. In some instances, there are wealthy people who have diversified their revenue streams to the point where that of some are completely unrelated to that of others. Let me give you an unlikely business example. Perhaps a salient example of this trend is found in activities of Sean “P. Diddy” Combs. Combs initially began his path to wealth and fame as an A&R at a record label, before eventually operating as an entrepreneur who founded his own record label, Bad Boy records. Although Bad Boy first started off by catering to the then-emerging market for hardcore rap, it would eventually expand its interests to include R&B and pop. Personally, Combs was able to internalize this concept and enter into a number of business ventures that were completely unrelated to music. He has acted in multiple films and has made a number of different television appearances. Additionally, although he started in the music business as an executive, he eventually became an artist and released several albums. The entrepreneurial spirit he exudes transcends entertainment (both acting and music), however. Combs has a plethora of restaurants, the most notable of which is called Justin’s. This restaurant has locations in both Atlanta and in New York City, my followers from these cities should already know the brand. What is most notable about this fact is that there is no correlation between working as a successful music executive and becoming a restaurateur, which Combs has done. These two industries are unrelated. However, it is clear that Combs engaged in both of them simply as a way to diversify his revenue streams. His forays into the fashion and clothing industry also underpin this notion. His clothing line, Sean Jean, has been featured in Macy’s for more than the past decades, and is found at other high-end retail establishments as well. Sean Jean itself is highly diverse, with numerous styles and subset clothing lines for everyone from teens (New York Daily News, 2016) to grandparents. Combs also has numerous real estate ventures. His path to attaining wealth is apparent–it is necessary to diversify one’s revenue sources so that one can have multiple means of generating income.

In summary, the true takeaway from an analysis of the sort of diversity of revenue that both Jobs and Combs were able to create is that there is a degree in autonomy in doing so. It is best for one to have such a diversification so that those revenue streams are actually independent of one another. That way, should one ever fail, one is greatly supported by the others. Additionally, the failure of one source of revenue should not impact the success of another autonomous revenue source.

In Part 2, I will go into my own experiences and discuss why I found business diversification as one of the most importanrt part of my personal and business growth. For those who would like to read further, please find below the references:

Austin, E.G. (2011). With Apple, the medium made the message. The Economist. Retrieved from
Finkle, T.A.; Mallin, M.L. (2010). Steve Jobs and Apple, Inc. Journal of the International Academy of Case Studies. 16(7). Retrieved from
Johnson, K., Li, Y.; Phan, H., Singer, J.; Trinh, H. (2012). The innovative success that is Apple, Inc. Marshall Digital Scholar. Retrieved from
Kalla, S. (2012). 10 leadership tips from Steve Jobs. Retrieved from
New York Daily News. (2016). Sean (Diddy) Combs launches new clothing collection with daughters for Sean John brand. Retrieved from