MULTIPLE STREAMS

OF INCOME
How to Generate a
Lifetime of Unlimited Wealth
ROBERT G. ALLEN

ROBERT ALLEN teaches people how to accumulate wealth through seminars, books and audio programs.
He is the author of Nothing Down and Creating Wealth, both of which were New York Times #1 bestsellers.
Mr. Allen is also a regular guest on Larry King Live and Good Morning America. He has been featured in the
Wall Street Journal, Barron‟s, Parade, People and Reader‟s Digest. Mr. Allen is a graduate of Brigham Young
University, where he earned an MBA. His Web site is at www.multiplestreamsofincome.com.

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 Multiple Streams Of Income - Page 1

MAIN IDEA
To achieve financial independence (however you may personally define it), learn and apply the seven essential money skills:

#1 – Value it
#4 – Invest it #6 – Shield it
#2 – Control it
#5 – Make it #7 – Share it
#3 – Save it
Phase 1 – Starting Out Phase 2 – Accumulate Phase 3 – Legacy
Learn how to control your Develop and grow a portfolio Learn and then apply the
personal cashflow and develop of income streams from varied strategies by which wealth can
good habits for handling it and sources – providing security be retained and passed on as a
investing it effectively. and flexibility in results. legacy in the future.

“What will all of this get for you? A lifestyle that gives you the freedom to do what you want, when you want, with whomever you want.
There is a Spanish saying that captures the essence of this lifestyle: „Salud, Dinero y Amor y Tiempo para disfrutarlo‟ – health, money
and love, and the time to enjoy them. Some of life‟s greatest enjoyments and most of life‟s greatest disappointments stem from your
decisions about money. Whether you experience great piece of mind or constant anxiety will depend on getting your finances under
control.”
– Robert Allen

Phase 1 – Starting Out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 2

The first three money skills lay a foundation for all future financial success.
#1 – Value it Until you value money, you won’t make any serious effort to control it.
#2 – Control it If you can’t control your money, you’ll never be able to save and invest it.
#3 – Save it And unless you develop saving habits, you’ll never have surplus funds to invest.

Phase 2 – Accumulate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pages 3 - 7

You accumulate wealth by developing the making money and investing money skills. In previous
generations, families could survive on one stream of income – a salary, for example. Today, almost every
family needs to be a two income family to survive. In the future, a portfolio of separate income streams will
be required – meaning that if income from one source runs out for any reason, there will be time to adjust.
10 separate streams of income are:

1 Invest in the stock market

#4 – Invest it
#5 – Make it 2 Accelerate stock market returns
3 Multiply your investment dollars
4 Buy and hold real estate
5 Use foreclosures and purchase offers
6 Buy tax lien certificates
7 Use network marketing

8 Become an “Infopreneur”

9 License your intellectual property

10 Build an Internet business

Phase 3 – Legacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 8

The last two money skills address your complete financial objectives.
#6 – Shield it Once you’ve succeeded in accumulating wealth, you need to understand how to
#7 – Share it shield your wealth and use it to create a legacy.

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 Multiple Streams Of Income - Page 2

Phase 1 – Starting Out Now, assuming you’re managing to increase the amount of cash
Main Idea you have available to save and invest, there is an order in which
#1 – Value it you should move forward:
#2 – Control it When first starting out:
#3 – Save it

The first three money skills lay a foundation for all future financial
success. Until you value money, you won’t make any serious
effort to control it. If you can’t control your money, you’ll never be Savings and investments
able to save and invest it. And unless you develop saving habits,
you’ll never have surplus funds to invest. 10% 90%
Supporting Ideas
The process of accumulating wealth and achievement of
financial freedom is always built on a foundation of sound External retirement Emergency fund
financial management skills. Until those skills are in place, any account (3-6 months cash)
income generated by multiple revenue streams will simply pass
through your hands with minimal benefit.
Before commencing on building multiple streams of income, get Once your emergency fund has been put in place
some perspective of where your current cashflow goes. you’re then ready to start investing:
Generally speaking, your finances will probably look something
like this:
Income

Savings and investments

10% 90%
Cash Flow

External retirement Investment

account programs

Taxes Auto Insurance Household Housing

50%
Conservative,
Savings Repay Church Business Fun long-term investments
Investments Debts Charity Expenses
30%
Moderately aggressive,
medium-term investments
At the very least, before starting on a wealth accumulation
program, develop your own system for tracking and identifying 20%
Highly aggressive,
where your cash currently goes. Until you can do that
short-term investments
consistently, you’ll never be able to move ahead.
The objective of developing multiple streams of income is to
have not just one, but a number of lifetime income streams
flowing into your cashflow pool. Ideally, you want to get to the From this point on, your focus becomes increasing the amount of
stage where you have 10 separate streams flowing in all the time
cash that flows into your personal cash flow pool – not by making
– but that will more than likely be a long-term plan. In the more
more at what you’re already doing but by starting separate and
immediate future, you should try and add one new stream of
distinct income streams. The nine characteristics of the ideal
income each year for the next 10 years.
income stream are summed up in the formula MONEY TREE:
Keep in mind, however, the general view that accumulation of M – Multiple income streams – for security.
wealth will only occur if you channel more of your cashflow into O – Outstanding – offer high quality products and services.
the “Savings and Investments” stream. In other words, even N – Nothing down – build businesses with little ingoing capital.
when you have up to 10 income streams flowing into your E – Employee resistant – out-source rather than hire employees.
cashflow pool, you still want to keep the outflow from all other Y – Yield – generate cash flows that are highly profitable.
areas where they now are, or even lower than they are at T – Trends – get in front of trends and work with them.
present. If the money flowing out of the cashflow pool into other R – Residual – income without ongoing work required.
areas of your life increases as your income rises, you’ll be no E – Essential – products and services that everyone needs.

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further ahead in accumulating wealth – you’ll just have a lifestyle E – Enthusiasm – sell what you love with a passion.
that consumes more cash.
 Multiple Streams Of Income - Page 3

Phase 2 – Accumulate 2 Accelerate stock market returns

Main Idea
#4 – Invest it
Assuming you have your conservative index funds investment
#5 – Make it
program in place, you can now allocate 30-percent of your
savings to moderately aggressive medium-term stock market
You accumulate wealth by developing the making money and investments.
investing money skills. In previous generations, families could
survive on one stream of income – a salary, for example. Today, With these funds, you can:
almost every family needs to be a two income family to survive. 1. Invest in Warren Buffet‟s expertise – by buying shares in
In the future, a portfolio of separate income streams will be Berkshire Hathaway or Berkshire Hathaway B.
required – meaning that if income from one source runs out for He’s proven himself to be the most successful investor of all
any reason, there will be time to adjust. time, so let him manage your investment funds for you.
10 Income Streams 2. Invest in the mutual funds with the longest track records.
Whichever fund has been the most successful over the
1 Invest in the stock market longer term (at least 10 years) is obviously doing something
right. Therefore, they will probably continue to win in the
Over the long term, stocks gain in value faster than any other future, so the odds are stacked in their favor. Get in with
type of investment. Therefore, they should be an essential part them.
of your own personal wealth building programs. 3. Invest in stock market recommendations made by financial
To benefit from stock market investments, you need to: advisors with the longest track records.
1. Plan on holding your investments for 20- to 25-years. The Hulbert Financial Digest (www.hulbertdigest.com)
With stocks, the longer you invest, the lower your risks. If you tracks the performance of the top financial advisors over
try and time your purchases and sales to the ebbs and flows 15-year, 10-year, 8-year and 5-year periods. Follow the
of the marketplace, you’ll be lucky to break even. By contrast, advice of those who have the best long term records and
if you buy and hold for at least 10 years and ideally 25 years, ignore everything else.
you’ll have time to ride out any years where the market goes 4. Invest in the lowest performing stocks that are part of the
down. Dow Jones Industrial Average.
2. Buy index funds made up of all the stocks in the market. The Dow Jones is made up of 30 stocks. Find the five that
By investing in index funds, you’re automatically diversifying have the highest yield and the lowest closing prices, and
your risk and spreading it over the entire market rather than invest in those stocks. (Or see www.dogsofthedow.com for
being limited to the performance of just a few stocks. the current list of the Dow stocks which meet these criteria.)
Investing in index funds is effectively betting the market as a Most years, those five stocks will outperform the Dow as a
whole will go up – which is quite a safe bet because since whole.
1950, the market has gone up for 40 of those years and gone 5. Consider investing in enhanced index funds.
down in only 10 of those years. Enhanced index funds are mutual funds that invest in an
3. Invest a little more each and every month. attempt to earn multiples of the indexes they track. For
Clearly, the sooner you invest, the longer your money works example, some try to earn 1.5 times the return of the S&P
for you and the better your returns. Most people don’t have 500 Composite Index. By investing in these funds, you are
lump sums to invest, and if they wait until they have a lump positioned to amplify benefits to portfolio.
sum put together, they may never get started. Therefore, a 6. Consider investing in stock sector funds.
better idea is to invest a fixed amount every month. The stock market is split into 196 industry groups or sectors.
As well as gradually accumulating capital, this approach also Sector funds build a portfolio in single sectors of the best
benefits from the effect of “dollar cost averaging ” – where if stocks. By investing in the funds targeting a “hot” sector of
the market goes down temporarily, that’s an opportunity for the economy, greater than normal gains can be made. Or
you to buy more at a cheaper price. Naturally, the benefits of alternatively, there are also mutual funds which do all the
dollar cost averaging only come into effect if you continue to work for you – such as The Diversified Sector Fund Power
invest on a regular basis. Portfolio or the Targeted Sector Fund Power Portfolio offered
by Fidelity Select Portfolios. (See www.donaghue.com)
In practice, around 50-percent of your savings capital each
month should be invested in this type of long-term investment. Overall, your second income stream is intended to assume a
Your aim here is to develop a conservative base for your little more risk than Stream 1, and hopefully that risk will translate
investment portfolio, and to generate future wealth. into better rewards. Your target with this part of your savings and
investment stream is to generate returns in the 20- to
There is an overwhelming amount of information available about
100-percent per year region.
stock market investing. By and large, you should ignore most of
it, since you’re not trying to time your entry to and exit from the While your first revenue stream rides the market, this second
market. You’re there for the long haul – so it doesn’t really matter revenue stream tries to beat the market . Consequently, this
what the current hot stocks are or what the experts are saying. second stream requires a little more study and more time to
Don’t worry when you hear about spectacular gains being made succeed. Nobody can best the market year-in and year-out, but
in some area or another – that’s just part of the normal ebb and with a little luck you might do a little better than average for a few

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flow of business. Instead, your focus should be on buying more years.
stock, and holding it for as long as possible.
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3 Multiply your investment dollars 4 Buy and hold real estate

Assuming you’ve put 50-percent of your investment dollars into
Stream 1 conservative investments and 30-percent into Stream Everyone knows that real estate goes up in value over time,
2 medium-term investments, the remaining 20-percent can now despite some occasional short-term corrections. Creating a
be allocated to aggressive short-term investments where you revenue stream from real estate investments is quite
attempt to double your money each year. straightforward, and consists of three key activities:
To achieve that, you’re going to use: 1. Finding highly motivated sellers.
• Leverage – by borrowing money to buy more stock. People become motivated sellers for a variety of business or
• Options – contracts to buy stock in the future. personal reasons. To find these people, you should be:
Some more aggressive investment strategies are: • Watching the classified ads in newspapers.
1. Write covered calls. • Talking to realtors and real estate agents.
On any stock you own, you can sell call options – which are • Keeping watch in your everyday contacts.
options to buy your stock which can be exercised on a • Driving around the neighborhoods where you’d like to buy.
specified date at a specified price. The options either: • Talking to bank employees who handle foreclosures.
• Are exercised – locking in your gains. • Joining real estate clubs, associations and groups.
• Or expire – meaning you pocket the cost of the options. If you can find people who are highly motivated to sell – the
By selling call options, you can increase the short-term return “don’t wanters” – you increase your chances of buying the
generated on your stock. At the very least, if your stock property at a favorable price and being able to structure a
appreciates in value and the option is exercised, you have creative purchase transaction.
guaranteed the price you will be paid to buy your stock. If the 2. Financing bargain properties creatively.
option to buy your shares is not exercised, you’ve generated Once you find someone who wants to sell their property, the
a cash return on your stock, which will boost the returns challenge becomes to structure a financing deal with low
beyond the increase in market value achieved. ingoing for you that the buyer agrees to. In practice, that
The largest market for listed options is the Chicago Board usually means:
Options Exchange. Their Web site is at www.cboe.com. • Offering them paper securities like mortgages or notes.
Note that all options expire on the third Friday of the specified • Offering a rent with an option to buy arrangement.
month and that each contract is for 100 shares. Around • Offering other products or services as part of the deposit.
80-percent of all options expire without being exercised. • Using security deposits, personal loans or credit cards.
• Bringing in partners who provide the deposit.
2. Buy and sell call options.
Once you develop some confidence in selling call options, Most frequently, the key to structuring a real estate purchase
you can move on to buying and selling call options. These transaction will be to act as a problem solver. If the seller
contracts themselves can be brought and sold or exercised trusts you and if you understand their needs and
at the option of the contract holder. requirements accurately, you then want to structure
something that creates a win-win outcome. If you work
Since this is fairly specialized investments, you’ll need to do towards an arrangement that they accept is fair, equitable
some study about options before attempting to make money and meets their most pressing needs, you’ll be increasing
this way. The Chicago Board Options Exchange has some your chances of success.
excellent educational tutorials at www.cboe.com.
Keep in mind the fact that creative financing cannot make a
Again, note these strategies are restricted to just 20-percent of bad deal good – it can only be used to make a good deal
your investment cashflow, and are strictly attempts to generate great. If it’s a bad deal – by which is meant there is no profit
exceptional short-term results. They should never be your entire potential – it’s not worth buying, even if you pay nothing
investment strategy. down. Don’t ever get locked into a transaction that soaks up
The six rules which apply to these types of investments are: your valuable cash in the hope that somehow, somewhere,
 Start trading with a paper portfolio before committing actual something will change. It won’t.
money to your investments. Establish a track record of 3. Generating profits either from cash-flow or increase in value.
success on paper first. Once you’ve managed to buy a property, you then generate
 Don’t invest any money you can’t afford to lose. This is a revenue stream for yourself by:
high-risk, high-return or high-loss territory. • Staying on as landlord and renting the property out.
• Reselling the property at a profit.
 Study everything you can first before getting into these types
of investments. In a buy-and-hold strategy, you’ll be focusing on cash flow
profits. In other words, the property remains part of your
 Try and get a mentor – someone who knows the ropes. Pay
long-term portfolio, and you rent it out. The rental payments
them to teach you what to do.
cover the mortgage and all other ownership costs, so in
 Don’t over commit to any single trade. Set a limit – that no effect you have an asset that appreciates in value and which
more than 5- to 20-percent of your investments funds will be gradually but steadily pays itself off.
committed to any single trade. And stick to it.
Ideally, what you want to be attempting to do is to buy one
 Keep in mind that anyone can look good in a bull market. property per year for generating cash-flow properties as a
Therefore, in a bear market, go back to the sidelines and work landlord and your long-term net worth, and one property a year

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on paper rather than continuing to lose money. that can be resold for equity profits within the following 12- to
18-months.
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5 Use foreclosures & purchase offers 6 Buy tax lien certificates

Since real estate is not a liquid investment, from time to time It’s possible to generate an income stream earning 18- to
people get into tight financial situations. When that happens, 50-percent interest – with the returns guaranteed by the
short-term bargains can materialize which can form the basis for government – by buying tax lien certificates.
an additional income stream. Tax lien certificates are issued by the 3,300 separate counties
The two short-term real estate bargains are: and local governments throughout the United States. They are
1. Foreclosures secured by the overdue and outstanding taxes owed by property
Around 33,500 homes go into foreclosure every month in owners. Since local governments require funds to pay for
America. If you can buy and sell just one of these each year, essential services, they create and sell tax lien certificates. That
you could realistically generate an income stream that way, the government gets the cash they need, while the tax lien
exceeds your normal annual salary. And every once in a certificate holder gets the interest paid in the form of late fees
while, you may even come across a bargain that’s good and penalties.
enough to set you up for life. In effect, tax lien certificates are comparable to municipal bonds
Foreclosures can be purchased: and Treasury bills. As an investor, you buy the certificates and
• Before the default notice has been filed at the courthouse. when the government collects the past-due taxes, it sends you a
• Once the foreclosure notice becomes public knowledge. guaranteed government check for your investment plus the
• At the formal foreclosure sale. interest.
• After a foreclosure sale. Tax lien certificates come in almost any size, from $10 to more
Each phase has its advantages and disadvantages, but than $1 million. The return on each is mandated by law, and
generally speaking, the greatest flexibility occurs if you wait varies from state to state and county to county. These
until after the foreclosure sale has taken place. At that point, certificates are sold at public auctions, so you don’t have to
mortgage holders become very keen to move the item off become a licensed dealer to purchase them.
their books. The only problem is that if you wait that long on In some states, tax lien certificates are called tax deeds. The
most properties, someone else will snap them up. only difference is that with tax deeds, the property owner’s real
Keep in mind the fact that the more desperate anyone estate is actually transferred to the deed purchaser free and
becomes, the quicker they will need to move and therefore clear of any mortgages or other liens. That means the tax deed
the more flexible they’re likely to be. They really only have purchaser has to sell the real estate to generate their return. That
two options: shouldn’t be too difficult, however, since any property acquired
• Drop their price until a buyer commits. this way would have been purchased for pennies on the dollar.
• Come up with better financial terms. In short, tax lien certificates or tax deeds offer an outstanding
In short, foreclosures are exceptionally fertile territory for opportunity to establish another income stream because:
outstanding real estate bargains. Start cultivating your own  You can get started with a small amount of money.
information sources on the types of local opportunities that  You can succeed regardless of what your credit rating or past
are available with foreclosures, and get actively involved. business history is.
2. Purchase Offers  You can earn passive, government guaranteed interest rates
Any property owner can, at any time, enter into a legally of 22-percent or greater.
binding agreement to sell you their real estate at an agreed
upon price on an agreed upon date. This is called an offer to  You have at least a small chance of being able to purchase
purchase. real estate for pennies on the dollar. You can then sell your
real estate to generate an immediate and impressive capital
So long as when you enter into the agreement, you specify gain, or rent your property out to generate an ongoing
that it may be executed by yourself or by someone you revenue stream for yourself.
assign it to, you can actually generate income by selling your
option to someone else. (You legally allow for this by adding  You can enjoy tax deductible travel to tax lien auctions held all
the words “and/or assigns” after your name on the offer to around the United States.
purchase agreement).  The government does all the work in collecting the unpaid
In essence, you can earn a nice finder’s fee for yourself by taxes and paying you your return on investment.
using purchase offers. All you need to do is ramp up your  You need no experience, special skills, qualifications,
marketing program and get out and find people who are licenses, training or certification to participate.
willing to take over your position and complete the purchase.  You’ll know, going in, exactly what your return will be on every
There are a vast number of ways these transactions can be tax lien certificate or tax deed you purchase.
structured so they end up being win-win situations for
 You’ll come to understand why this has been described as the
everyone involved.
best-kept secret in America, and why those “in the know”
In summary, most people think of real estate as being a have previously been limited to a select few of the nation’s
long-term investment which will gradually but steadily increase wealthiest and smartest investors.
in value. It’s true that’s one way to invest in real estate, but it isn’t In addition to being fun, tax lien certificates and tax deeds

the only way. Foreclosures and purchase offers represent viable genuinely and legitimately make money.

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ways short-term revenue streams can be generated from real
estate.
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7 Use network marketing 8 Become an “infopreneur”

Network marketing has become more sophisticated and Information marketing is the most exciting business opportunity
powerful with the introduction of computers to track results more of the new millennium. By selling information profitably, you can
efficiently. It now represents a genuine opportunity to establish turn your passion or expertise into lifetime cash flow streams.
an income stream. The three key skills necessary to succeed in marketing
To succeed at network marketing: information profitably are:
1. Select the right company. 1. Target an area people are intensely interested in.
To choose from the hundreds of network marketing Smart infopreneurs are constantly on the outlook for ideas
programs available, look for someone that offers: that appeal to the immediate needs of large numbers of
• Products and services you personally use. people in the marketplace. Once they identify a target
• A compensation plan where you can earn ongoing income. market, they work on creating, packaging and marketing an
• A sound company and management team. immediate solution to the problem shared by the overall
There’s actually only one question you need to ask market.
specifically before deciding whether or not to join a network Actually, this is not as hard as it might appear at first glance.
company: “How many customers do I need to enroll to be Any type of expertise has market value if it is packaged
able to earn $500 a month in extra income?” The lower the properly and presented in a unique way. The main point of
number, the better. If it is relatively easy for an average focus in this step is to determine how many people place a
person to earn a steady income, everything else about the similar value on that expertise, and whether or not they could
business will fall into place. reasonably be enticed to pay for acquiring that know-how
2. Use the best marketing system. and knowledge.
Instead of trying to sell products to everyone you know, make 2. Develop irresistible ongoing marketing programs.
a list of 21 people you think may want to earn some extra To market solutions, information marketers use a broad
money. Send each of them an information kit and then follow range of lead generation systems, including:
through. Your goal should be to get one of those people to • Print – reports, newsletters, brochures, mailers
agree to join your network. • Multimedia – audio tapes, video tapes, CDs
Once you get one person aligned with you, then help that • Telemarketing
person recruit one or two people from the 21 people they • Digital – Internet Web sites
know. And so on. Think small. Build your network slowly. • In-person appeals – interviews, speeches, seminars
Don’t try and generate thousands of dollars a month right The best marketing programs are focused around just one
away, just try and earn a few hundred extra dollars each compelling competitive advantage or unique selling
month while you learn the system. proposition – which is a specific, highly motivational promise
Supplement and accelerate your team building efforts by you make to potential customers that nobody else can
running inexpensive, small classified ads in the local match. Good marketing focuses on the ease and speed of
newspaper. These ads should emphasize the opportunity to results while at the same time causing people to act.
build a low-cost, high-return home business. Send anyone 3. Establish long-term relationships with your clients.
who responds an information kit. Once customers are obtained, good information marketers
3. Use the right leadership system. then work to move each customer progressively through a
The key to long-term success in network marketing is to spectrum of allied products and services in different price
manage people effectively and develop leaders. Therefore, bands:
you need to: • Up to $20 – Tapes, videos, seminars, books
• Hold weekly training sessions for your leaders. • $21 - $100 – Manuals, newsletters, tape sets, CDS
• Hold weekly training meetings for new team members. • $101 - $500 – Live training, hotlines, teleconferencing
• Hold weekly recruiting conference calls to support the team. • $500 plus – Home study courses, interactive coaching
• $1,000 plus – Personalized hands-on intensive training
By doing these things, you build and strengthen the skills and
expertise within the group. Over time, your network By and large, the emphasis of this natural progression cycle
marketing organization can then become more self-sufficient is to maximize the lifetime value of each client, moving them
and self-sustaining. from low cost materials to the progressively more expensive
back-end products and services. By selling information in as
In essence, network marketing is an effective way to leverage many formats as possible, the profit of any one idea is
and derive benefits from word-of-mouth endorsements. It’s the maximized.
ultimate application of relationship marketing – where you can
establish a revenue stream for yourself based on the personal Information marketing is an exciting business opportunity simply
recommendations you’ve made. In addition to the leverage because intellectual property is emerging as the real wealth
created by having so many people involved in generating driver of the economy. Anyone who has a good idea, a good way
income for you, one of the key features of a good network to package their idea, a good business plan and some
marketing program is the residual nature of the revenue stream persistence can succeed in establishing a lifetime stream of
– you earn ongoing income in the future as a result of your efforts income selling information.

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in the past.
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9 License your intellectual property 10 Build an Internet business

Licensing intellectual property is big business, and an excellent Pure and simple, the commercialization of the Internet is the
way to create another stream of income. The basic concept is most influential business innovation in history. Everyone should
simple – you sell the rights to use your idea or image to someone be thinking about how they can use the Internet to derive a
else who then does all the manufacturing, marketing and long-term revenue stream for themselves.
commercialization of the product or service while sending you an The three keys to success in an Internet business are:
ongoing royalty.
1. Strategizing your launch.
The four basic approaches to licensing are: Successful online businesses are built around one of three
1. Come up with your own idea that you license to others. generic business models:
(Example: Walt Disney conceived the character Mickey • Information marketing – selling information for a fee.
Mouse from his own imagination). • Network marketing – building an organization.
2. Develop your own brand or logo, and license others to • Affiliate programs – referrals generating commissions.
manufacture products under that brand or logo. Therefore, instead of simply building an electronic version of
(Examples: Hang Ten, the NFL, the Olympics and even your existing sales materials on the Internet, develop a
Gold’s Gym generate revenues mainly from licensing others separate online business around one of those three general
to use their logo). approaches. In other words, get a strategy for what you’ll do
3. Acquire a license for someone else‟s idea and grow a on the Internet to generate revenues before plunging into it.
business around that idea. For example, a chiropractor won’t generate many more
(Example: Bill Gates acquired DOS from another company appointments by having a Web site. But he could make
and then built Microsoft around the cashflow generated by money by selling an online book targeting aging baby
licensing deals). boomers with sore backs. Or he might be able to develop and
4. Sell a license for something that will enhance someone market a “Business Success Kit for Chiropractors” to teach
else‟s products. others how to build their practices. Or he might even develop
(Example: the inventor of the small battery testers built into an online referral network to help people find a good
packages of Duracell batteries approached the company chiropractor near them.
unsolicited and sold them on the idea of building his product 2. Automating everything.
into their packaging – after being rejected by their largest Instead of paying employees to do your marketing, inventory
competitor). control, shipping, customer service and record keeping, you
To develop an income stream from a licensing idea: can automate everything via a Web site on the Internet. This
is really quite straightforward using tools like:
 Saturate your thinking with “tollgate” concepts. • Stats programs – that analyze your site traffic.
Try and come up with ways you can become the gatekeeper • E-mail templates and autoresponders.
for specific information that people want. You then just have • List servers – databases of names and e-mail addresses.
to charge a small fee to everyone who passes through that
gate. In essence, by using technology in smart and effective ways,
your Internet business doesn’t need any employees. You
 Act as if you were already a successful licensor. can use technology to do everything that’s required.
Be on the lookout for new trends and ideas. Whenever you
identify one, look at who will be well positioned to benefit from 3. Marketing for traffic.
that trend. Approach those parties, and ask whether This is the make-or-break point for Internet business
worldwide licenses are available for their products and success. To develop good marketing ideas, try thinking like
services. You’ll be pleasantly surprised by just how many your potential customers. To figure out how they would most
viable business opportunities are available. likely try and find your site:
• Go shopping using search engines.
 Spend a day at your local library or bookstore. • Immerse yourself in everything they would read.
Look through patent records or the New York Times
bestseller lists for inventors or authors who have not yet fully Supplement that perspective by talking to owners of other
exploited their ideas. Contact them directly, and ask whether Web sites and find what worked for them. You can then use
they would be willing to grant licensing rights for their all of those ideas to develop a game plan for generating
information or products. traffic to your online business. Most likely, that will entail:
• Using your Web site address in offline ads.
 Once you have a license, find a manufacturer quick. • Registering your site with every search engine.
If the idea is a good fit with their existing business and a • Joining newsgroups and posting messages.
win-win agreement can be structured, manufacturers will • Renting e-mail lists and sending out invitations.
provide all the seed capital, inventory and channels of • Taking advantage of free Internet classifieds.
distribution you need. • Using free banners, links and cross promotions.
 Grow your royalty revenue. • Using paid online advertising.
Look into other avenues and opportunities to license your • Using traditional offline direct marketing techniques.
intellectual property in other commercial areas.
It is already clear the Internet will have a major impact on the way

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Most people in business fail to fully exploit all of the licensing business is done in the future. Therefore, everyone should be
opportunities available to them. Just by spotting and filling some actively involved in developing and building an online business.
of the more obvious gaps, you can readily create an income Over time, this will come to be more and more important as an
stream that will endure around the licensing idea. income stream.
 Multiple Streams Of Income - Page 8

Phase 3 – Legacy The final challenge in being able to create a legacy of wealth is to
Main Idea be as efficient as possible. To manage your time effectively, use
#6 – Shield it these strategies:
#7 – Share it  Remind yourself constantly that time is money. Always keep
in mind the opportunity cost of your time, and invest your time
The last two money skills address your complete financial wisely in areas that bring you closer to your life’s objectives.
objectives. Once you’ve succeeded in accumulating wealth, you  Use the Pareto or 80-20 principle. Every day, focus
need to understand how to shield your wealth and use it to create exclusively on the 20-percent of activities which create
a legacy. 80-percent of the results. And, be perfectly willing to
Supporting Ideas procrastinate on the 80-percent of the activities that produce
Once you’ve successfully established your multiple streams of the trivial 20-percent of the results.
income, you then have to find effective ways to shield it. In other  Throw away your “To-Do List”. Replace it with a “Power List” –
words, you have to structure your finances so your tax liability is which separates trivial items from the critical few that produce
at least minimized and ideally eliminated. 80-percent of the results. Increase the amount of time spent
Keeping in mind the fact tax codes change constantly, some on those critical activities every day.
useful general principles in this area are:  Practice positive reinforcement. In other words, when you do
 The opportunities to build wealth through retirement plans like something right, reward yourself. Since everyone in business
401(k)s, IRAs, Roth IRAs, SIMPLEs and SEPs are greater knows that whatever you measure and reward always get
now than at any other time in history. Therefore, sit down with done, you’ll be building up a track record of success.
someone who is knowledgeable in this area and discuss the  Always do whatever you fear most at the start of each day
best mix of these plans that fit your personal financial while you’re fresh. Get that out of the way and everything else
circumstances. will be easy.
 Take advantage of some new financial innovations which are  Take a few minutes every day (about 15 minutes, in fact) to
becoming available – like variable insurance which changes plan your day. Then go to work making your life conform to
its cash value in response to how and where you choose to your vision, rather than meandering along in every direction.
invest your money. Do some physical exercise every day. It will help you work

 Put together a viable plan to protect your assets should you harder and longer. You’ll also be able to think more clearly.
become the subject of litigation. Keeping in mind the fact Find ways to use waiting time productively. You’re sure to

94-percent of all lawsuits filed in the world originate in the strike it, so be prepared.
United States, you should look carefully into the use of legal
entities like:  Set specific goals for each income stream each year and then
• Nevada corporations – offering total privacy and no taxes. review those goals daily. Schedule activities aligned with
• Family limited partnerships – which limits liabilities. those goals.
• Limited liability companies – again for liability limitation.  Focus. Give 100-percent attention to anything you’re working
• Living trusts – which avoids probate. on, and then move on to something else.
 Don’t forget to address your estate planning adequately and  Learn how to delegate effectively.
thoroughly. This will be another part of the way you structure  Get into the habit of doing things immediately, while the
your finances to shield the multiple streams of income you motivation is still fresh.
generate.
 Be perfectly willing to say no to activities that don’t take you in
Assuming that you’ve managed to establish multiple streams of the right direction.
income that generate wealth throughout your lifetime, and that
 Don’t wait until everything is perfect before acting. Be
you’ve also managed to shield and protect your wealth. The
prepared to fail your way to success.
question then becomes very personal – why have you worked so
hard throughout your life? In other words, now you’ve  Take a few minutes every day to review what went well and
accumulated some wealth, what do you want to do with it? where improvements need to be made.
Some of the most successful business people in history, when  Challenge yourself to be productive at the start of every day.
faced with the same decision, have decided to become  Keep a good balance between the six important areas of life:
philanthropists. They have set up foundations and trusts that do 1. Your brain.
many good and impressive things around the world. Perhaps 2. Your physical body.
you aspire to do something similar. 3. Your spirit, soul or being.
Or maybe you would settle for simply setting up income streams 4. Your time.
that will flow onwards – producing revenue that future 5. The important people in your life.
generations of your own family can use whatever way they see 6. Your money.
fit. Work hard at striking the right balance in all six areas of your
life and you’ll be a success.
Regardless of how you decide to apply your wealth, that’s a
great position to be in.

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