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- The Average Millionaire Has 7 Streams Of Income - True Or False?
The Average Millionaire Has 7 Streams Of Income - True Or False?
Join us on the journey to financial independence.
Renaissance Man
August 18, 2023
Read time 5 minutes
Welcome back to another week with Renaissance. The newsletter equivalent of the piggy bank from Toy Story: “Hamm is a wise-cracking plastic piggy bank.“ That’s basically my tombstone epitaph right there. 💡
And just like Hamm…this week…we’re going ham! 🔥
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Today at a Glance:
The Average Millionaire Has 7 Streams Of Income - True Or False?Crypto TVL Explained & Our Trade This WeekStoozing - Free Cash From 0% Credit Cards- And remember guys we don’t do this all for free…..well we do, but still. Honour our gentlemen’s agreement and refer a friend. 🤝
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The Board
The Renaissance Over-Under
Business, Money Markets & Financial News
“The Average Millionaire Has 7 Streams Of Income” - True Or False?
That’s a lot of plates to spin……..
- “The average MiLlioNaiRe haS 7 StReaMs of InCoMe.” - how many god damn times have we all heard this and not once have I seen this being true!
- From my experience millionaires get wealthy through the Buffett principle - concentrated wealth through one income - and it’s usually their business or a single investment holding/index. As it goes - concentrate to build wealth, diversify to keep it!
- So I thought I’d put an end to this myth and set about finding the truth……so I put our interns on it. And this is the summary of what they found……with dramatic flare from us of course. 👀
- We don’t cite our sources (we’re not rats) - but this is a breakdown of millionaires from a few years back:
65% of millionaires had 3 streams of income/schmeckles/statinkies/whatever term you like
45% of millionaires have four streams of income
29% of millionaires have five or more sources!
The average net worth of a millionaire in the U.S. is $2.2 million
20% make their first million in their mid 30s, and they do it the safe way frugally investing in safe bets outside of their jobs
More than 30% become millionaires by climbing the corporate ladder and entering the C-suite
28% get wealthy by high risk high reward pursuits like trading, investing, start-ups etc, and their average wealth is $7.5M (compared to $2.2M that’s a jumpppp!)
EARNED ⚡
- Most people only have 1 source - their job. The 9 to 5. The Dolly Parton. And maybe the odd $50 slipped into your hand by your grandmother on family occasions (undeclared income hustles 🤙). So the average millionaire has a 3X lead on you already!
- But, the chances are if you’re reading this you’ve started a business, or you’re investing, or you’re just looking for more and this dog just ain’t gonna hunt! If you’re really not creative just go the over-employed route and get 2 jobs and give your time away for money. Good trade……the art of the deal.
- I’m afraid the majority of earned income millionaires are executives of large companies, and they’ve pretty much worked in the job for decades!
REAL ESTATE / RENTAL ⚡
- Channel your inner Grant Cardone. Get a whiteboard and just scream ‘cash flow’ ‘til you’re wealthy.
- Look, it always has been true and still is - the majority of millionaires come from property! If you don’t want to rock the boat do real estate on repeat. Buy, flip, wholesale, fix em up, Airbnb - it’s simple but it ain’t easy! But you can get started creatively.
- On average, a millionaire has 40% built or preserved in real estate assets!
- This is as passive as it gets, and your property appreciates over time. At Renaissance we do like some high end rentals and Airbnbs! 🏘
- But everyone’s at different stages and different levels of sophistication, and more than anything watch out for the overheads of these interest rates……they’ll get ya. But if you have dry powder get in there and get a deal on some delinquent broke ass. 👀
- Rule of thumb is on average it’ll take 10 rentals to be a millionaire, or less if you’re operating strong Airbnbs!
INDEX INVESTING ⚡ (I’ll include dividends here too)
- Alright, this is a biggy - a lot of the millionaires consolidate wealth into index funds as a wealth preservation tool!
- The classic rule is that you can draw down 4% of your total index fund investment every year and still have it grow! Which is great for keeping the majority of your wealth safe.
- But that’s a slow way to the top for a small yearly payoff. Math time: With $1M in an index fund (how long is that gonna take to get in the first place?? Hold on, where’s my Tony Robbins clip…) then 4% is only $40K a year passively. Not exactly the baller retirement you were hoping for.
- But it’s a good nest egg to compound wealth safely for retirement so at Renaissance we do advocate for this!
- Here’s the alpha⚡, get 28k and invest it in index funds, wait for all this to compound and blow over and you’ll have your $1.2M.
CAPITAL GAINS ⚡ - and no, it’s not a posh English workout, it’s investing profits. 😎
- The classic buy and hold strategy! But this comes in many shades and it’s dealers choice, that’s the beautiful thing about the wealth creation game.
- You’ve got: real estate, classic cars, collectibles, stocks, crypto, watches, fucking cash in the attic old furniture! Pick your lane.
- For us at Renaissance, we love real estate to be safe, and crypto and stocks to be risky! Everything else, including the index funds etc, all have much longer time horizons and can be done much more passively than money markets.
- But if you’re about mastering your craft and can handle a decent risk level then they are for you! There’s more money in them than the others combined, over time you’ll be as happy as a pig in shit HA. 🐖
- A little comparison: real estate will take huge amounts of money and likely a decade to achieve your millionaire goals. Same for index funds. Stocks - can be a lot less. Or…you put $27 into PEPE and walk away with millions in days, or any of the other crypto hits (both short and long term).
- All opportunities are not created equal or fair for capital gains. Choose your skillset to master and factor in your life-stage.
- Oftentimes investments cost far more than money - the sacrifice can result in burnout, lost relationships, depression, etc etc. ⚡ You want to get your rich life with as few scars as possible! ⚡ Remember that, that’s Renaissance’s mantra right there - we’re a lifestyle brand, not some flying taxi start-up grinding for 10 years. 👀
Master just one of these skills and compound, do your 10,000 hours of practice, then no amount of failures can hurt you!
BUSINESS
- By now you should understand that to get really wealthy - you need to start a business and grow it. Fucking revolutionary, I know. 👏
- A lot of sources say almost 90% of millionaires are self-made entrepreneurs in one way or another (and yessss this includes property millionaires). We know from all our previous sources this ain’t strictly true! But it is the largest section by one metric or another!
- Your business is just a function of what you can stick with, and do slightly better than other people, for a longer period of time. That’s success in a nut-shell.
- Compound your efforts like you would passive investments, and you’ll wayyyyy outperform those returns.
The Millionaire Conclusion ⚡
- Okay, after some digging - no they do not have 7 streams of income! Because that would be insanity.
- They’ve got 3, and usually 1 of them is the big main money maker! And the others are the ever-growing safer bets.
- The big 1 source depends on their chosen path: career ladder c-suite / risk taker / frugal penny pincher & index investor with an average job <$70K.
- The average age to make a million is mid-30s, but this all depends on your chosen asset classes and the type you are from the above! You want it faster, get riskier.
- You can’t stay rich very long if you stay risky, on average at any time they have 40% in real estate, and plenty in an index fund. Diversify!
LITTLE BITS 😎
We’re going dutch…….
Turns out the Sandy B classic isn’t all sunshine and rainbows…but a great investment by the Tuohy family for the NFL deal, the movie rights, and more 👀 all that and $15M hush money
Michael Burry just bought $1.6B of $SPY and $QQQ puts - or so the headlines go that you’ve probably all seen! This is bullshit. That’s the nominal value, not what you actually pay for options. It’s complicated - here’s his play and the explainer!
Buffett and Burry waiting on a crash https://markets.businessinsider.com/news/stocks/buffett-burry-big-short-kiyosaki-stock-market-outlook-crash-bargains-2023-8
NOSTALGIA OF THE DAY
Crypto Market & NFT News
New Chains And Analysing Their Value : The Total Value Locked (TVL) Death Trap
- There’s plenty of new chains these days, they’re popping up all over the place. Should you be playing in the big boy pool or stick to the kiddy pool with your arm bands? 🏊♂️
- You see a chain you like and the TVL is rising, buttttt - TVL does not mean there’s more and more tokens and assets on chain!
⚡ TVL increases due to the price of the already present tokens increasing in value; so is this asset appreciation or actual chain growth via new assets??
⚡ The best metric we’ve found for organic chain growth is checking the stablecoin liquidity on a chain! Get a side by side of the TVL and the stablecoins on that chain graph - they should be trending very similarly if you’ve any hope in hell of staying alive on the chain.
⚡ If you’re unsure, get on DefiLlama or another tool and get charting and do some fundamental analysis. The chain dictates liquidity, exiting, everything - you need to know the tectonic plates that are moving under you all the time. 😎
⚡ Here’s a little extra alpha just to keep the real players fixed for another week. 😉
- Lately Telegram bots have been killing it, and last week we called UNIBOT halfway through its 100X. 📈
- CBOT is killing it now, it jumped 400% from our entry point. It’s dipped and we’re looking for another entry as there is potentially some road to run with this one! Caution is advised by Renaissance rarely, but do your own research, although it could play out well!
Wealth Building, Personal Finance Hacks & FAT FIRE
- Today we’re going to talk about a simple but effective way to create some extra disposable cash. This isn’t going to create fortunes or build empires, but once you’ve got your other main wealth building systems in place this can be a cherry on top. 🍒
⚡ Stoozing - Stoozing is when you borrow money at no interest, then place this amount into a high interest savings account.
- With the existence of 0% credit cards this is a fool-proof method to top up some extra cash. And with rising interest rates, this is getting interesting again.
- Here’s how way this works and how you can implement.
⚡ Get yourself a credit card offering 0% ⚡
- Many credit card companies offer a 0% interest sign up offer. To make best use of this, you should look for the longest 0% deal available.
- Here’s some of the best options we found:
UK ☕ - 0% interest for 23 months
USA 🏈 - 0% interest for 21 months
⚡ Use this card for your everyday spending and save the cash ⚡
- Use this card for everything you would usually buy. Groceries, petrol, bills, Pina Coladas, the lot! Allowing the money you would usually spend to then built up in your account.
- In this way the balance on the card has a matching asset of cash in your bank. For this to work effectively you should only spent up to the 0% credit limit - so you should also seek out the offer with the maximum credit limit available.
- Many credit cards also require you to make payments every month to meet the balance. Only pay the minimum repayments so you keep maximum cash in your account , but make sure to not miss any of these as it may mess up the offer.
- Basically, set up the direct debit and forget it!
⚡ Save the cash in a high interest savings accounts⚡
- The higher the interest the better. Any cash now building up that hasn’t been spent you place in a high interest account.
- With rising rates there are many of these available with increasingly attractive rates. These change all the time but some currently good easy-access ones are below:
UK ☕ - Tandem easy access saver at 5%
USA 🏈 - Western Alliance Bank Savings Account 5.20% easy access
- The key is these have to allow you ability to access the cash when the 0% offer is up so you can clear the balance. If you know this is in over a year you can even consider making use of fixed rate accounts.
- These accounts will pay higher rates than the ones above, but you won’t be able to access the money until the end of the fixed term. All okay if you won’t need it until the end of the credit offer.
- Now when the 0% deal is up on the credit card. You transfer the balance from the savings account over and clear it. The interest you earned on the cash will all have been pure stoozing profit.
- Alpha boost ⚡ To really keep the party going, instead you can transfer over the outstanding balance to a 0% balance transfer credit card. And the cycle continues…..
- These do usually have a small fee though, so really only a best bet when you have exhausted all the 0% interest spending cards. Some good ones for this below, including one with zero fees.
Meme of the Day
That’s a wrap for this week! Meet us on Twitter to talk all about it. Where we’ll send you jokes, tips, and all important news from the world of money, business and crypto and more! (@RenaissanceDly)
