Self-Made Millionaires Have Their Eggs in Many Baskets

“Keep all your eggs in one basket, but watch that basket closely” – this is one of Warren Buffet’s most famous quotes.

It is also one of the worst pieces of advice for anyone who is working on becoming rich.

My father took Buffet’s advice without knowing it and in one night lost everything when his main warehouse for his business burned down. retire nest egg super

My dad had most of his wealth tied up in his business.

We were considered wealthy at the time of the fire.

My dad’s business was valued at around $3 million, which is north of $20 million in today’s dollars.

We lived in a very nice house in Todt Hill, one of the most affluent neighborhoods on Staten Island.

When my dad’s warehouse burned to the ground, all of that wealth disappeared into thin air.

Our family struggled financially for the next 15 years, trying to recover from that nightmare; struggling almost daily to prevent foreclosure on our home.

My dad told me later in life that he wished he had his eggs in more than one basket.

That would have been the smart thing to do, he told me.

In my study of the daily habits of the rich and poor, I learned that most self-made millionaires generated their income from many baskets:

  • 65% had three streams of income money income earn salary growth plant water seed tree increase
  • 45% had four streams of income and
  • 29% had five or more streams of income.
    Having multiple income streams makes a lot of sense.

When one stream is negatively affected by systematic economic downturns, of which you have no control, the other streams can come to the rescue and help you survive the downturn, without dramatically affecting your lifestyle.

Some famous examples of this multiple income stream principle at work include:

  • Ashton Kutcher – In 2009, Kutcher invested some of his Hollywood cash on Skype when it was valued at just $2.75 a share.
    Microsoft recently purchased Skype for more than $8 billion, making Ashton enormously wealthy.
  • Arnold Schwarzenegger gets most of his current income from real estate investments he made prior to becoming a famous film star.
  • Warren Buffet – Ironically, due to the diverse nature of the investment portfolio held by Berkshire Hathaway, Buffet actually is invested in 15 different industries.
    That’s a lot of baskets kicking off a lot of income streams.

Most people are not rich.

And coincidentally, most people have one stream of income – their job.

If you do not save and invest your savings in assets that generate additional streams of income, and you lose your job, you could soon find yourself living with a relative.

Putting all of your eggs in one basket is simply a recipe for financial disaster.

If you put all of your eggs in one basket and that basket breaks, what do you do?

How do you create multiple streams of income?

  1. Save, Save, Save – Save 10 – 20% of your net income every year.
  2. Expand Your Means – Start a side business or side career that generates additional income.
  3. Create Multiple Baskets – Invest your savings and additional income into investments that generate passive income such as: residential rental properties, commercial rental properties, TICS, triple net leases, seasonal rentals (beach areas, ski resort areas, lake front areas), equity investments (stocks, bonds, mutual funds), annuities, permanent life insurance, royalty-generating property (timber, oil and gas), boat rentals etc. If you can’t do it on your own, partner with others and keep building your portfolio of assets that generate passive income.

As I mentioned, three streams of income seems to be the magic number for the self-made millionaires in my Rich Habits study, but the more income streams you can create in life, the more secure will your financial house be.

Want more of this type of information?

Tom Corley


Tom is a CPA, CFP and heads one of the top financial firms in New Jersey. For 5 years, Tom observed and documented the daily activities of wealthy people and people living in poverty and his research he identified over 200 daily activities that separated the “haves” from the “have nots” which culminated in his #1 bestselling book, Rich Habits – The Daily Success Habits of Wealthy Individuals. Visit the website:

'Self-Made Millionaires Have Their Eggs in Many Baskets' have 2 comments

  1. July 12, 2015 @ 8:18 am Ed Chan

    Cause and Effect. Was it having all his eggs in one basket that was the problem or was it not having the appropriate insurances that was the Cause versus the Effect. That has been a golden rule of any business is to have the right insurances. We constantly tell our clients that and still some do not heed the advice. Lots of people have lots of opinions about investing but I would go with someone with a track record and there is no one with a bigger track record than Warren Buffet in investing. Others like Bill Gates or Steve Jobs who made fortunes from owning a unique business in a growth industry but no one comes close to Buffet who made his money from smart investing. Its a brave person who would advise against the track record of Buffet unless they have earned the right by having done better themselves.
    Certainly not me.


    • July 12, 2015 @ 8:39 am Michael Yardney

      Ed, I tend to agree. Successful business people and investors tend to specialise rather than diversify. That’s how they become experts


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