The yin and yang of multiple streams of income

April 3, 2017 by
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Multiple streams of income sounds appealing, doesn’t it? If one source of income is lagging, it’s nice to know you have others. If one source takes off, you might be able to reduce or eliminate sources that require too much time or overhead.

But it’s difficult enough to build one business (practice), let alone simultaneously build two. We only have so many hours in a day, so much energy and enthusiasm, and so much capital. That’s why Mark Twain said, “Put all of your eggs in one basket and watch that basket”.

Another consideration is that if you start another business, you might frighten or confuse your clients. They may think you are struggling in your practice and wonder why. They may question your ability to continue serving them.

Nevertheless, at some point in our careers, we are all tempted by the notion of creating multiple streams of income. Before yielding to that temptation, here are some things to consider:

  • Unless you’re looking for an exit strategy, don’t even think of starting another business until you are secure in your main business. Make sure your practice is well established and successful and you have experienced staff in place to take care of most of the work while you explore your new venture.
  • Before looking outside your practice, look for ways to generate new sources of income inside of your practice. You might start new practice areas (by hiring new attorneys or outsourcing), offer the services of other professionals or businesses via joint ventures or as an affiliate, or produce books and courses or consult with other lawyers who want to learn your systems and methods.
  • Opening a second office for your practice will be easier to set up and run than any other new business. There’s also much less risk because you are duplicating what you know works.
  • Since most traditional businesses require a lot of time and/or capital, consider buying a franchise or starting a network marketing business. By leveraging the company’s existing systems, infrastructure, and tools, you won’t have to create them from scratch. You can also run your new business part time.
  • Consider buying a business instead of starting one. An existing business with a proven track record and an established management team and customer base will (theoretically) allow you to turn a profit sooner and with less risk.
  • If you have capital but not a lot of time, consider investing in an established business that is run by others, or in rental property.
  • If you want to start a business from scratch, you’ll be better off doing something law-related where you can use your knowledge, reputation, and contacts to get your business up and running more quickly.
  • Favor passive income businesses or investments. Get a business up and running and producing passive income, so you can then (a) start another business, (b), spend more time in your practice, or (c) retire.

It is definitely possible to create multiple streams of income. I’ve done it and so have many others. My advice? Be careful, be patient, and be open to learning and doing things you have never done before.

If you’re interested in starting a network marketing business, check out my books

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Keeping the main thing the main thing

August 25, 2016 by
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Yesterday, I talked about investing for a future when you might not be able to work or you may want to retire. I mentioned the option of starting a side business that has the potential to create passive income and pointed out that this is what I did.

I should have added a proviso about being careful about remembering your priorities, lest your Plan B tempt you to put more time and energy into it, to the detriment of your Plan A.

It’s difficult to build two businesses at the same time. Some say that at best you’ll have mediocre results in both and never achieve excellence in either. Speaking about the risks of diversification, Mark Twain said, “Put all of your eggs in one basket and WATCH THAT BASKET.”

But I think that if you’re careful, you can be successful in both your main business and your Plan B.

First, choose a Plan B that harmonizes with your Plan A. Choose something that allows you to leverage your knowledge and reputation and contacts to help you build your side business. Choose something that, when your clients and contacts find out about it, they say, “That sounds like a good investment,” instead of, “It sounds like he’s giving up his practice.”

Second, be mindful about timing. Put most of your time and effort into building your practice or primary business, until you get to the point where you can safely peel off some time and money to invest in something new.

If you’re smart about it, you can have the best of both of both worlds. Your practice will provide you with cash flow to raise your kids and have a good life, and your Plan B will provide you with passive income to fund retirement or the next phase of your life.

Since there are only so many hours in a day, and you only have so many years to live, you’ve got to keep the main thing the main thing. But that doesn’t mean it’s the only thing you can ever do.

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How much do you earn when you’re not working?

August 24, 2016 by
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I have to visit the doctor today. It’s nothing serious but it made me think, “What if it was?” “What if I was truly ill and had to stop working?”

Fortunately, I don’t have to work. I have enough passive income coming in to take care of the essentials.

How about you?

What would you do if you got sick and had to stop working? What if you want to retire?

Most lawyers trade their time for dollars. Even if they don’t bill by the hour, their income is tied to the amount of work they do.

More work (more time) means more income. No work means no income.

Even if you’re a partner or you have staff that does most of the work, you still have to show up, make decisions, and supervise.

You may be extraordinarily well paid, but how much will you earn if you don’t work?

If you’ve been good about saving and investing and have assets that provide passive income (interest, dividends, rents, royalties, etc.), or you own a business with partners or a management team in place and it doesn’t require your active participation, you may be good. If you don’t, what will you do?

I don’t mean to be an alarmist, but you have to admit that this is something you have to think about.

Start a savings plan. Study investing. Find a side business that doesn’t require a lot of time. (That’s what I did.)

But don’t put it off.

“The best time to plant a tree was twenty years ago,” says the Chinese proverb. “The second best time is now.”

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How to create passive income in your law practice

September 15, 2015 by
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I love passive income. You hear me talk about it all the time. Passive income allowed me to retire from the practice of law. Passive income allows me to do what I want with my time because the income comes in whether I work or not.

I enjoy consulting but don’t do much anymore because there’s nothing passive about it. Instead of spending hours each week speaking with lawyers and getting paid once, I’d rather invest my time in creating more passive income.

I built a business years ago that provides me with passive income. It still pays me, month after month, year after year. I also get passive income from my books and courses.

Why earn $500 from consulting when I could spend that time creating a new book or course that pays me $500 per month, every month?

Do it once, get paid over and over again.

Set it and forget it.

Okay, so hurray for me. What about you?

Well, you could create passive income by building a side business like I did (contact me if you want me to show you how), and you could create books and courses or other products that sell over and over again. Or you could invest in income-producing assets.

But maybe none of that is right for you.

Can you use your law practice to build assets that provide you with passive income?

In a way, yes.

Instead of creating intellectual property, you can create relationships.

Find clients who have lots of legal work you can do, instead of one time clients. Find referral sources who can send you new business every month.

You have to spend time nurturing those relationships, and you still have to do the legal work (or supervise the people who do), but once you have a new referral source or client with ongoing work, the work will come to you without you having to do much more.

Not quite true passive income, but close. The next best thing.

Each relationship is an asset that provides cash flow. Each relationship gives you access to everyone in that person’s network.

Robert Kiyosaki said, “The richest people in the world look for and build networks; everyone else looks for work.”

This week, how will you build your network?

How to get more referrals from lawyers

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It’s better to own a law practice than to run one

September 30, 2014 by
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An article in our local newsletter featured a neighbor who recently changed careers. I don’t know what they did before but a couple of years ago, they bought a fast food franchise and they recently opened a pizza restaurant in the food court of our local mall.

The couple have two young children and my wife commented that running two restaurants sounds like a lot of work. I pointed out that running a restaurant isn’t the same thing as owning one.

As the owner, you have employees who run the day to day operations. You may check in once a day, once a week, or once in awhile, but as long as you have good people working for you, and good people supervising those people, there isn’t lot for the owner to do. And, if you get big enough, you could structure things so that you don’t have to do anything at all.

Many restaurant chains are owned by investment groups. The owner-investors are not involved in the daily operations.

Most small businesses, and that includes most small law practices, aren’t there, however. The owner, or the partners, are still very much involved in running the business, and running a business is a lot of work.

Would that it could be otherwise.

What if you didn’t have to go to the office today, or for the next six months? What if the practice ran without you?

That would be nice, wouldn’t it? Scary, but you could get used to it, right?

Granted, a law firm isn’t a restaurant. Lawyers have more rules to follow with respect to supervising employees and such, and great penalties if they don’t, so you might never be able to go home and be a passive investor.  But you can come close.

And you should.

Because then, you could use your time any way you want to, to do anything you want to. You could even go to work if you want to, but because you want to, not because you must.

I encourage you to work towards this ideal. Work towards the point where other people do most of what needs to be done. You can (eventually) hire all the lawyers and legal assistants and other employees you need, and people to supervise them.

Seriously, put this on your list of goals. Because it’s better to own a law practice than run one.

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“Recruit and Grow Rich” ebook just released on Kindle

July 10, 2014 by
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How many ways can a lawyer create passive income? I’ll give you a minute. . .

The answer is not many. That’s the conclusion I came to over a decade ago when I was contemplating the concept of retirement. I realized that I would have to save or invest several million dollars to be able to retire and live off the interest or cash flow that those assets produced, and I knew that wasn’t going to happen.

Even if you earn hundreds of thousands of dollars every year, after taxes and expenses, most attorneys aren’t going to arrive at their retirement years with a big bucket of cash or a steady stream of cash flow.

When I admitted this to myself, I knew I had to find a plan b.

I started a network marketing business and began earning passive income. That income grew to over six-figures a year, which provided me with the retirement income I sought but had never achieved in over twenty years of practicing law.

I’ve written a book about it and it’s now available on Kindle.

It’s part “my story” but it is mostly training. It presents the system I’ve used to recruit hundreds of people (mostly lawyers) who wanted the same thing I wanted. It’s called “Recruit and Grow Rich” and it shows you how to work smarter in your network marketing business, instead of merely working harder.

If you have a network marketing business, or you have been thinking about starting one, this book could shave years off of your learning curve, and help you achieve your goals quicker and with less effort.

The first review came in, from an attorney, who said, “This book is an absolute must read for any attorney considering a network marketing opportunity.” He also said, “Building a network organization is counter-intuitive to the way attorneys have been taught to think and act.” He’s right.

Of course you don’t need to be an attorney to benefit from the lessons in this book. So if you know anyone who has a network marketing business, tell them about it.

Here’s the direct link to the book in the kindle store where you can get more information.

NB: You don’t need to own a Kindle device to read Kindle books. Amazon has free apps that allow you to read Kindle books on your computer, tablet or phone.

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