The majority of self-made millionaires have a similar approach to earning money

“Keep all your eggs in one basket, but watch that basket closely.” – Warren BuffettWarren Buffett

This is one of Warren Buffett’s most famous quotes.

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

My dad inadvertently took this advice with his own financial empire, and in one night lost everything when the main warehouse for his business burned down.

My dad’s business was valued at around $US3 million, which is north of $US20 million in today’s dollars.

We lived in a very nice house in Todt Hill, one of the most affluent neighborhoods on Staten Island, New York.retire nest egg super

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 five-year 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
  • 45% had four streams of income
  • 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 seeing your lifestyle dramatically affected.

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 you and your family 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), and boat rentals. 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:

'The majority of self-made millionaires have a similar approach to earning money' have 5 comments

  1. July 13, 2016 @ 12:25 pm john

    Interesting….. I think that Buffett may have been referring to the fact that he prefers to invest in a “basket” of industrial shares rather than other investments including property. I believe that Buffett does not like property as an investment. Having said that it is probably true that many of the companies in which he invests own property … commercial and industrial but not residential.


    • July 13, 2016 @ 12:41 pm Michael Yardney

      John – you are correct – Warren Buffet doesn’t really like property as an investment


  2. July 13, 2016 @ 8:28 pm Alex

    I agree with Warren! Old saying is “better is an an enemy of good”. What Buffet says is that if you find a good strategy which works, repeat it again. Why diversify for a sake of diversity? Specialize and once you find your niche – repeat your strategy again. I have been buying townhouses in the same complex because they offer both excellent capital growth and good rental yield. Seven digit prices on houses on the same street, fantastic old land block; Lake, Golf Course and private schools are nearby excellent infrastructure project! The area is clearly undervalued. Why change for a sake of change?


  3. July 15, 2016 @ 8:14 pm Rob Drake

    My feeling of this are: 1) concentrate on one thing at a time – it appears to me that Buffett looks at one company or group at a time and then buys that company or part of, then or at a later date. 2) his (or his company) spreads over the whole of the equity market – not one sector. 3) He does concentrate on one basket – owning enough of companies to get the best deal for him. For the rest of us or for me concentrate on getting the best for yourself one thing at a time. For Australia 1) Super if applicable e.g. Salary Sacrifice, Extra payments, etc. 2) Property – Own and Investment. 3) Shares – Domestic, International. – Not necessary in that order – But learn what works for you and leave anything that you do not understand alone and learn from books and blogs such as this all the time – keep refreshing everything. The major things I think is once you have decided on a course of action go with it and do not panic. Invest what you are prepared to loose – easy with shares not so easy with property – but keep in that market.


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