Do you have multiple streams of income? More importantly do you have multiple streams of passive income?

At this site, I stress the three actions most people can do in their lives to increase their wealth over a lifetime. However, I also talk about the options market too because that is something I consider to be one of my other streams of income.

I’ve been using options to create extra income since 1999. It’s not an easy game to figure out and play. It does take time and energy to do.

You need startup money. You need patience. Sometimes a stomach made of steel. Some of it can be “outsourced” to others. Like what options to pick. There are services out there that provide better options selections than I could select. So for that service I pay a fee.

Multiple streams of passive income are streams of income you create and at some point that stream generates income so you don’t have to do too much to keep it going – at some point.

Examples include:

• Writing and selling a hit song
• Recording a hit song and selling a million copies
• Writing a book and selling millions of copies
• Playing the options market and actually making money in the long term
• Writing a blog that is so popular it makes you money while you sleep
• Selling a product or service that you don’t have to actively be involved with and again, makes money while you sleep
• Owning Rental Property
• You fill in the rest…

Now, the hard part is finding that stream of passive income that fits into your life. Maybe it’s something that takes a long time to implement or maybe it’s something that you could get other people to implement for you – for a fee of course.

Whatever it is, multiple streams of passive income are definitely something that makes your financial life better but your personal life could temporarily suffer or suffer for a long time as you work towards a lofty and meaningful goal.

A Story

When I was going to college about 30 years ago, I used to work in a pizza and sandwich shop, a liquor store, as well as being a musician on various nights of the week and weekends.

At one music job, I met an older gentlemen in the hallway outside of the hotel ballroom my band was playing at. He asked me what I did and eventually got around to asking me what I planned on doing with the rest of my life.

This caught me off guard since I was young and didn’t think too far ahead into the future. It did get me thinking and I’ll never forget the conversation either.

He just happened to be the speaker that night for the engagement I was providing the music for. He was a Tony Robbins type speaker who energized people with his presentations.

During our conversation he mentioned that he planned on trying one career every 10 years to keep his life interesting. I was twenty years old and looking at a future of one career forever. I never really thought that far in advance to plan like that.

Another tidbit of wisdom he shared with me was, always have a project to come home to at the end of the day that inspires you. Whatever it is.

This guy worked a regular day job for many years while trying to become a motivational speaker and in the evenings he would spend hours building an airplane. That’s right, an airplane.

He would do this after he came home from his day job to his wife and two boys, have dinner, spend some time with the family, then go to the garage and start working on his airplane.

After 2 or 3 years of doing this he finished his plane and flew it. WOW!! Now if someone can take that time to figure out how to build an airplane, do it and fly it, then most of us can strive to do what we want to do over the course of a life time.

That man’s name is Raymond Lemke and I met up with him last year, 2006. I told him the story about how I met him 30 years ago and the conversation we had as well as what he said to me that evening and how I never forgot it.

Although he said he didn’t remember it, he was very happy I came up and I told him about the impression he made 30 years ago.

You can listen to a sample of him here. Here’s his book Yes, You Can!: An Innovative Approach to Happiness

1. The people who get on in this world are the people who get up and look for the circumstances they want, and if they can’t find them, make them.
~George Bernard Shaw, Mrs. Warren’s Profession, 1893

2. I know of no more encouraging fact than the unquestionable ability of man to elevate his life by a conscious endeavor.
~Henry David Thoreau, Walden, 1854

3. When written in Chinese, the word crisis is composed of two characters. One represents danger and the other represnets opportunity.
~John F. Kennedy, speech, April 12, 1959

4. The optimist proclaims that we live in the best of all possible worlds; and the pessimist fears this is true.
~James Branch Cabell, The Silver Stallion, 1926

5. Wisdom consists of the anticipation of consequences.
~Norman Cousins, Saturday Review, April 15, 1978

6. Very few people are ambitious in the sense of having a specific image of what they want to achieve. Most people’s sights are only toward the next run, the next increment of money.
~Judith Bardwick, The Plateauing Trap, 1988

7. Change is inevitable in a progressive society. Change is constant.
~Benjamin Disraeli, speech, October 20, 1967

8. A wise man turns chance into good fortune.
~Thomas Fuller, Gnomologia, 1732

9. Decision making isn’t a matter of arriving at a right or wrong answer; it’s a matter of selecting the most effective course of action from among less effective courses of action.
~Philip Marvini, Developing Decisions for Action, 1971

10. Happiness, wealth, and success are byproducts of goal setting; they cannot be the goals themselves.
~Denis Waitley and Remi L. Witt, The Joy of Working, 1985

On Wednesday, I wrote about the ups and downs of the market and how that affects the way you invest, sleep and keep your sanity. Well, everyone is being tested after today with the DOW closing down -311.50. WOW!!

Well, this is what happens sometimes. The markets have been going crazy all year long and everyone kind of knew something like this would happen and more could be coming, we’ll see.

But not to worry. If you’re a new saver and mutual fund investor, then this is part of the show. This is where you start looking at what mutual funds lose the least in times like this but make the most in the up times.

If your a trader or someone who buys and sells stocks for the long haul or short term, there will most likely be some stocks you’ll be able to get into cheap that you’ve been waiting for.

If you’re an options trader and you watch the volatility jump all over the place because of all this and the swings that are most likely to follow, then there will be nice opportunities to grab some profits from both Calls and Puts.

Talking about Puts, wouldn’t it have been great to be in some of those today? Puts allow you to make money as stocks go down. You heard me right. Again, I need to put an Options definition page up soon.

No matter how you look at it, things are sure exciting to watch.

I hope you can stomach all this and stand strong for the long-haul.

Here are some quotes on perseverance to keep you going:

“Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time.“ – Thomas A. Edison

“Perseverance is a great element of success. If you only knock long enough and loud enough at the gate, you’re bound to wake up somebody!” – Henry Wadsworth Longfellow

“A diamond is a lump of coal that stuck with it.” – Unknown

“Take time to deliberate, but when the time for action has arrived, stop thinking and go in.” – Napoleon Bonaparte

“The wise man bridges the gap by laying out the path by means of which he can get from where he is to where he wants to go.” – John Pierpont Morgan

“Buy when everyone else is selling and hold until everyone else is buying. That’snot just a catchy slogan. It’s the very essence of successful investing.” – J. Paul Getty

And on a lighter note…

“Getting on a plane, I told the ticket lady, “Send one of my bags to New York, send one to Los Angeles, and send one to Miami.” She said, “We can’t do that!” I told her, “You did it last week!” – Henny Youngman

“I told the doctor I broke my leg in two places. He told me to quit going to those places.” – Henny Youngman

“What’s the use of happiness? It can’t buy you money.” – Henny Youngman

“For my birthday I got a humidifier and a de-humidifier… I put them in the same room and let them fight it out.” – Steven Wright

“I went to a general store but they wouldn’t let me buy anything specific.” – Steven Wright

“What happens if you put a slinky on an escalator?” – Steve Wright

Can you stomach this market? The DOW took a dive today to the tune of -226 points. How does that make you feel?

Will you sleep okay tonight or be miserable about what investments you’re in and how they dropped along with the market?

Does this remind you of earlier this decade when the likes of Enron and Level Three were near or at triple digits and ultimately ended up, well you heard about Enron and Level Three (LVLT) closed at $5.82 a share today. I guess it’s time to jump into LVLT. Just kidding.

Well if you’re a smart saver and investor, you don’t care what happened today. That’s right. Today is one day in many that you’ll experience a big down turn in the market.

You don’t need to track the markets on a day-to-day basis. That will make you sick. Of course, it’s hard to ignore when it’s plastered everyone in the media. But I’d rather view it as a time to do my normal, every day routine or don’t even bother watching market news.

However, if you’re an investor, you might be thinking about getting in something that’s now cheap enough to get into. If you play the Options market and you were “guessing” the markets and/or your favorite stocks were heading south, you could have bought Puts to make some money. Yes, you can make money on stocks when they go down. But that’s for another Funny Money Friday post about Options and this site promotes owning mutual funds for us smart savers and investors.

Long-Term

You want to focus on the long-term. The 10, 20, 30 years out that we’re investing for our retirement and more. You have to ride the roller coaster called the markets.

The Standard & Poor’s 500 or more affectionately known as the S&P 500, which is the world-renowned index that includes 500 leading companies in leading industries of the U.S. and is the best single gauge of the U.S. equities market, has returned over 10% in the last 20 years and there’s been some tough times in the last 20 years.

You have to remind yourself of the financial goals you’ve set. You have set some financial goals, right? Well, we’ll discuss it in another post.

Risk Level

How about your risk level. Your tolerance for the markets ups and downs. Assessing your risk level will determine what type of investments you’ll select. For example, we know stocks are more aggressive and riskier than bonds which also means stocks could include higher returns than bonds. Bonds are more safe investment choices and should be looked at closely as being part of your investment portfolio as life goes forward. That was a politically correct statement that really means, as you get older.

In other words, you’ll experience wilder swings in your stock mutual funds (mutual funds that include stocks in them) than in bonds. For some it will create wilder swings in your stomach as well.

Diversification & Asset Allocation

Diversification and Asset Allocation means investing in a variety of investments in different asset classes or categories. The “don’t put your eggs in one basket” thinking. That way, when one investment does poorly, the other might be doing just fine and another might be screeching higher and higher. Here at www.smartsavinginvesting.com, that means an allocation of mutual funds that include the following:

Large Growth – 35%

Large Value – 20%

Small Growth – 20%

Small Value – 15%

International – 10%

In another post we’ll discuss a good mix of index funds as well as throwing in some bond funds for safety sake and those older folks like me that I was talking about earlier, so they can protect their assets they’ve accumulated over the years.

Using dollar cost averaging to systematically invest a fixed amount of money at regular time intervals, say monthly, you won’t have to worry about timing the market. This will help even out the effects of market volatility.

So if you want a taste of doom and gloom read the following. But read it for education purposes and being able to stomach some of the bad news. It’s okay. Really.

• Tough day on Wall Street
• Dow Takes A Nosedive
• Dow Slides More Than 200 Points
• Stocks tumble amid mortgage, earnings worries
• Housing worries clobber stocks

Do you do something repetitively every day, every week, every month that you could do without? Well there’s nothing like the present to just stop.

For instance, I had a huge addiction a few years back driving through fast food restaurants and ordering the breakfast of the day because I felt like I didn’t have the time to make my own breakfast or eat healthy, since I was young and invincible. Not only is this unhealthy, but you go through some valuable dollars that you could otherwise use to save and invest.

So that’s it, is there something you can stop that saves you money and possibly makes you healthier and happier?

Ok, here’s another confession, years ago when I was a budding programmer, our programming team at work seemed to code 20+ hours a day. It was a blast, creating new stuff that people use on a daily basis that saves the company money. Very worthwhile indeed. We all smoked cigarettes too.

One night when I was working, I thought, I’m never going to be able to kick this. It’s too convenient, I was in a job where you sit at your desk, worked long hours and the employer let you smoke at your desk. What a benefit? Well, I did kick the habit and it wasn’t easy but I did it long ago too which was good.

So there you go again. Do something that’s good for you, your health, your money, your family.

When you save and invest for the long term, you’ll want to take the time to check how the money you put into savings and investments are doing.

Saving and investing for the long term requires more than just starting  an online saving account or investing in a few mutual funds and letting them sit there hoping they grow no matter what.

Here are 3 simple actions you can do that will make you feel confident about your savings and investments:

1. Check your online savings account balance and transfers to ensure it reflects what you’ve been saving and what you’re expecting.
2. Check your retirement plan account that your have through your employer.  Don’t panic if it’s less than last quarter.  If it’s steadily gone down for the last two or three quarters, we’ll make note of that and see how it does this third quarter of 2007.  However, if it’s gone up this last quarter then great!!  Use Morningstar to check how you’re doing by comparing your funds to others like it and the indexes that are used for the benchmarks of your funds.
3. Check your Roth IRA and see how it’s doing.  The market’s have been on fire the first two quarters of 2007.  Head over to Monringstar and compare your funds by again, searching for them and comparing them to their indexes and the other funds in the same category.

That’s it!!  Hopefully that takes you less than 1 hour.  Pretty simple and helps educate you for the long term.  In another post we’ll explore what to look for when you’re comparing the funds you own with other funds.

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