Welcome to the Ekabo Home Financial Freedom Mastermind podcast, the podcast for those who believe that financial freedom should not be a pipe dream, but a reality that can be achieved at any age. I am your host NI Ye Ale, and today we're gonna be talking about the importance of creating multiple streams of income and how it can help you achieve your financial goals faster. Make sure you stick to the end as we're gonna be.
Through the power of compounding and how it literally can be like printing money. Let's go. First, let's start by defining what we mean by multiple streams of income. This can simply mean having multiple sources of income coming in rather than just relying on one. This can also include things like a full-time job, a side hustle, rental properties, investments, and so on. Now, why is having multiple streams of income.
For one, it helps you diversify your income and reduce your dependence on any one source. And this is important because if something were to happen to your primary source of income, you will have other sources that you can rely on. Additionally, having multiple streams of income can also help you to increase your earning potential and reach your financial goals faster. So how do you go about creating multiple streams of income?
Well, there's many ways, but some of the popular options include starting a side hustle, investing in rental properties, or starting your own business. What I personally recommend is finding adjacencies to what you currently do in your day-to-day, and utilizing some of those skills outside of work.
For example, when I worked for a Fortune 500 company, , I used to be in medical cells and what I was doing was going out and having difficult conversations with hospital leaders and, and working to get them to choose our devices over others. And so the whole sales funnel was something that I was very familiar with. And so when I started to think about, Hey, what could I do outside of work? Actually went and got my realtor license to utilize some of the sales.
as a realtor and continue growing and using that adjacency to get ahead. Furthermore, when you talk about even investing, that's something that I always knew I wanted to do. , I took majority of the income I was making, like 90% of my commissions and, and all the gross income I was making. I kept pouring back into real estate while I was working and investing in more properties so that I could build up those passive income streams.
And it allowed me to, in less than eight years, be able to walk away from the W two and move into full-time real estate. Now if you're interested in starting a side hustle, there are other many options available to you. Some of the popular choices include freelancing, starting an online business, or selling products on platforms like Etsy or Amazon.
Investing in rental properties is another great way to create passive income, as I mentioned, and this can involve buying the property yourself and renting it out, or investing in a real estate investment trust, such as a. Starting your own business is another great option for creating multiple streams of income. This could be something as simple as starting a blog or a YouTube channel or something more ambitious like opening a brick and mortar store.
Creating multiple streams of income is the key strategy for achieving financial freedom and diversifying your income increases your earning. You could reach your financial goals faster and enjoy a more secure financial feature if you are going down this pathway. Remember to always be open to new ideas and opportunities, and don't be afraid to take a calculated risk. Okay, let's talk about compound interest first. Let's start by defining what we mean by compounding.
Compounding is the process of earning interest on your. , which means that the money you earn starts to earn money on its own, and it's often referred to as the miracle of compounding. I call it the eighth wonder of the world. I think that was first Einstein that called it that. But that's, that's what stuck in my head. And if you are able to master compounding interest, you have truly unlocked a power that is great over the money. So why is compounding.
So powerful more for one, it allows your money to grow at a much faster rate than if you were just earning interest on your initial investment. And the longer you leave your money invested, the more it will grow due to compounding. If you look at some of the greats that a lot of people look up to nowadays, like the Warren Buffets of the world, you can see that he's benefited from compounding interest as well.
You can see that the true wealth, when he started hitting the billions and billions didn't happen until later in. right? He had a couple million, you know, when he was younger. He kept investing, kept investing, kept investing, and it turned into a little bit of a hockey stick to where now that he's getting older in life, it's just compounding even quicker and easier for him.
And so to give you an example, if you were to invest $10,000 at a 5% interest rate for 20 years, you would end up with 16 2 20. But if you were to leave that same 10,000 invested for 30 years, you'd end up with a little over 25 K. It's an extra close to 10 K just by leaving your money invested by an additional 10 years to continue to compound. How can you take advantage of the power of compounding? Well, the first step is to start investing as early as possible.
The earlier you can start, the more. You will be able to earn through compounding because it's more time in the market. Additionally, it's important to invest consistently and choose investments that have the potential to grow at a high rate. Another important aspect to consider is the power of compounding in real estate investment. For example, if you buy a rental property and are renting it out, the cash flow generated can be used to acquire more property.
Not to mention every year, The the cost to living goes up by X percent and you're able to raise your rents each. But the year that you buy your property is when you lock in your mortgage, and so your mortgage doesn't change, but every year you're earning more income on the property that you've purchased. And so that's why people that you know, bought houses back in 2010 or even 2015 look like geniuses today because their rents are increasing, but their mortgage stays the same.
And so they're essentially just earning more money each. Not to mention, the value of the house continues to increase each year. When you look at the long game and look at over a 10, 20, 30 year period of time, it's typically gonna be worth more than it was when you first bought it, and the mortgage is still staying the same.
And so if you look at real estate, for example, which is what I've chosen as my vehicle of choice to get to financial freedom, it has multiple different ways to assist you along the way in multiple different areas that are benefiting from compounding and from time in the. In conclusion, compounding is one of the most powerful tools that you can use to achieve financial freedom.
And by starting early investing consistently in choosing investments to have the potential to grow at a high rate, you can take advantage of the miracle of compounding and watch your money grow exponentially over time. Remember that time is your friend when it comes to compounding. And so start today and watch your wealth grow over. Thank you for tuning into the acaba Home Financial Freedom Mastermind podcast. If you have any questions or comments, please feel free to reach out to us.
Until next time, take care and stay focused on your financial goals.