How to Give Yourself a Raise by Increasing Your Income Streams

Let’s face it – most of us are not Elon Musk and can only effectively handle one full-time job.  If you’re in that group, you are likely capped in what you can make which can lead to a scarcity mindset and thinking.  However, don’t be dissuaded.  With determination and planning, outside of the W-2 you can have as many incomes from real estate as you want and you can give yourself a raise – that can lead to true abundance.

Limitations on W-2 Income

Most of us who are working our W-2 jobs have limiting beliefs when it comes to how much we can earn and how much of a pay increase we can expect to get each year.  We have only one income from our day job and raises aren’t always guaranteed.  This is an inherently unstable position to be in. Without alternatives to this situation, we can and should continue to develop ourselves in our jobs to ensure that our primary income streams will continue to grow. However, there are always factors outside of our control, even in seemingly well-performing companies, that could lead to pay cuts, furloughs or even job loss completely. If anything, Covid has shown that we are not necessarily safe from black swan events. Therefore, if one income stream doesn’t provide us the wealth and stability we desire, then one solution is to obtain more streams of income.  

7 Income Streams of Millionaires

There’s a common saying that millionaires have an average of seven streams of income. So how does one create new streams? In order to do so and build real wealth, it helps to have the mindset of a millionaire.

Time is an obvious factor in limiting how much income one can obtain.  Many people have just one income, or maybe two if they have a side hustle or a cash flowing rental property. If you add in your spouse’s income, perhaps you have up to three or four income streams. The more income streams there are, the more security there is. This is all the more reason to seek out additional cash flow streams and continue to layer them on over time. One could have their day job, their side hustle, a few rental properties, some investments in syndications, interest income or dividend-paying stocks, etc. Some streams may go away but can be replaced with others. For example, an income stream might end with a sale of property. Or you could have an underperforming rental property, which, if sold, could be replaced by one or two more efficient cash flowing properties. The goal is to keep adding streams, ideally with higher and/or more stable returns. It’s worth contemplating and taking action on ways to increase your streams of income, especially if they are passive, as passive income streams provide us not only added wealth, but greater stability too. Ultimately, seven should be the minimum number of income streams to be had, but why stop there?

Buy Your Income

If you work full-time (40 hours per week for 50 weeks), every $1 per hour raise means $2,000 more for you each year. So how can you increase your income? You could ask for a raise at work (if you don’t get one annually), work on a side hustle, or become a driver for a ride-share service, etc. But there is only so much time for these activities. 

Alternatively, you can buy your increased income. It may sound like a strange concept at first, but each additional cash flowing asset you purchase is a source of an additional income stream. Some options for creating new streams could be to invest in single family rentals or dividend stocks, to lend money, or to put money into a bank account and earn interest. 

My preference, however, is for putting money to work in syndications and essentially buy added income. For example, if you invested $25,000 into a multi-family or another type of syndication that has a preferred rate of return of 8% after an initial stabilizing period of the asset, the income would be $2,000 per year – an amount that may very well be in the ballpark of your last raise at work. The great thing is that you will get this added income year after year, just like a raise. Moreover, with annual depreciation of your real estate asset, your $2,000 from this example syndication would likely come to you tax-free, making it better than the actual raise you got which is taxed at normal rates. Essentially, you are giving yourself a tax-advantaged raise!  Read Jim Pfeifer’s blog on “The Three Tax Buckets” for a more detailed analysis.

Further, it’s important to add that with a syndication you are not limited to just the annual cash flow as there are other ways that real estate pays you. You get equity paydown as well as potential and/or forced appreciation of the asset you are invested in. For more on this, see Steve Suh’s blog titled “7 Reasons Why Investing Passively in Multifamily Syndications Is the PERFECT Investment”.

Streams become Rivers  

Another way to look at cash flow real estate investing is to look at creating stream after stream, no matter how small they are at first.  An individual income stream likely won’t move the needle or impact your life much on its own. However, with time the size and number of income streams grow until the total cash flow becomes truly cognizable. When you attain that and continue to pour that cash flow back into new producing assets, you will end up with not streams, but rivers of cash flow.  

Gregory M. Baxter is actively engaged in being a passive real estate investor while maintaining his professional W-2 job.  He has been a landlord since 2009 after renting out his first apartment, and has invested in over 10 multifamily syndications since 2012.  Greg can be reached at

Nothing on this website should be considered financial advice. Investing involves risks which you assume. It is your duty to do your own due diligence. Read all documents and agreements before signing or investing in anything. It is your duty to consult with your own legal, financial and tax advisors regarding any investment.

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