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Get Rich by Building Your Own Nuclear Triad of Income

August 17, 2017 By The Money Wizard 18 Comments

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nuclear triad of income

If you haven’t been following the news, you may have missed the recent escalation of 70 years’ worth of tensions between the USA and North Korea, which has us all in danger of getting nuked.

I’m no expert in political current events, but the cliff notes version goes something like this:

  1. On July 28, North Korea fired a nuke into outer space.
  2. The United Nations scolds North Korea by imposing economic sanctions against the totalitarian regime.
  3. North Korean dictator/madman, Kim Jong Un, threatens to nuke the United States. (let’s see if Google North Korea autocorrects that title to one of the family’s more preferred monikers, such as “Dear Leader, who is a perfect incarnation of the appearance that a leader should have”)
  4. Trump responds with threats of fire and fury if North Korea keeps it up.
  5. North Korea says they are going to do some nuclear target practice off the coast of Guam, which is officially a US territory.

This all made me pretty nervous, right until I did a little research into the USA’s own nuclear arms program.

There’s a lot of hoopla over North Korea’s estimated 10 nukes, and while even one nuclear weapon is certainly terrifying, just for comparisons sake… the US holds somewhere around 6,800 nukes.

But it’s not just the number of bombs that makes that massive arsenal so intimidating. Specifically, the USA has what they call The Nuclear Triad. This means the nuke stash consists of three parts: bombers in the air, submarines underwater, and missiles launched from the ground.

To get specific, the US Navy has 14 different nuclear submarines, which can carry 24 nukes each. The Air Force holds another 74 bombers that can carry 40 nukes each. And the land based portion of the triad includes some 400 rocket ships, ready to go.

Per Wikipedia:

The purpose of having a three-branched nuclear capability is to significantly reduce the possibility that an enemy could destroy all of a nation’s nuclear forces in a first-strike attack; this, in turn, ensures a credible threat of a second strike, and thus increases a nation’s nuclear deterrence.”

What’s this all say to a finance nerd like me?

Diversification.

Diversify Your Income Like a Nuclear Boss

Sure, Uncle Sam might not be able to manage the DMV line with any level of intelligence, but the nuclear triad shows that when it comes to defense, the military understands diversification like a true finance pro.

What does all this military rambling have anything to do with personal finance?

Well, although there’s no North Korean madmen attempting to take our money, our attempts at wealth building are under their own sort of attack. Job loss, illness, economic downturns, and good old fashioned life all present constant threats to our long term financial independence.

And if we want to build up the defenses of our financial independence, we’d all be wise to seek our own diversification. Or as I’m now calling it, bolstering your wealth with a nuclear triad of income streams.

The Singular Income Risk Most People Don’t Realize They Have

Most people get this part very backwards. The vast majority of people live life on the edge, with almost 100% of their income derived from a salaried working position.

Interestingly, most people view their salary as the holy grail of safe income sources. In reality, a salary is an extremely risky income source, for two big reasons:

  1. When 100% of your income comes from one salary, your concentration to your employer is through the roof. A job loss or company decline is obviously devastating.
  2. Not only does your employer become more reluctant to offer raises the larger your salary grows, your salary actually becomes more at risk the further you advance in your career. If it ever comes time to cut costs, high salaried positions are the first target for layoffs.

Most people respond to these concerns by doubling down on the risks. They think that to minimize career risk, they will just devote even more time and energy into their jobs.

Of course, this serves the opposite purpose – it concentrates income even further within the salary, and it makes the employee even more of a potential target.

Even worse, as so much time and energy is devoted to The Career, the salary serves as a roadblock to other income sources. The woman always giving 110% for an extra 1% raise during annual performance reviews is too stressed to learn about investing. The career man spending nights and weekends in the office doesn’t have time to look into investment properties. Would Jeff Bezos have ever started Amazon.com if he was addicted to his New York City hedge fund salary?

The singular concentration continues right through retirement. Rather than building a foundation of cash flow for the golden years, the average saver forgets the part about saving. Multiple income streams? Nope, they’re all in on social security.

Build Your Own Nuclear Triad of Income

We’re in an economic boom right now, which means now is the time to diversify. At a minimum, a true money wizard works to build three pillars of income:

pyramid of wealth

1) Career Income

The first tier of income. By strategically choosing your degree, you’re able to leverage your college experience into a profitable career.

From there, it’s your job to work on your job. While your coworkers waste hours each day surfing the internet or entangling themselves in office gossip, you’re working away to position yourself as a top performer.

You manage the balancing act between solidifying yourself as a great employee, while avoiding giving your life to your company. As a result, you’re able to consistently score strong performance ratings and promotions as they become available, while still maintaining your free time to pursue other income opportunities and enjoy life.

2) Investment Income

The second income tier, which most people never attain.

Your career is going well, but you’d like to set aside some savings. You realize the best emergency fund is liquid assets, so you design a low maintenance lifestyle that allows you to save like a maniac.

You cut out unnecessary expenses, and shockingly, nobody suspects you’re living any differently!

You soon find yourself saving a massive percentage of the income from your career, even after contributing heavily to your 401k. Because you’re taking a balanced approach to your life outside of work, you have time to read introductory books (and blogs!) about investing.

You soon learn about the beauty of index funds. You open a Vanguard account and start investing heavily. Wow, investing really is easier than most people think…

Once your taxable account grows to a decent size, you’re shocked at how quickly a 7% return compounds over time. You start to see firsthand how realistic it is for a modest nest egg to spit off enough dividends/capital appreciation to fund your basic living expenses.

You find yourself stressing less and less about day to day expenses or doomsday scenarios. Worst case scenario, you know you could support yourself for several years just on the big pile of money you’ve saved up.

3) Side Hustle Income

It’s not long before you notice a fork in the road, where most of your friends are going down one of two paths.

The work-a-holics double down on their career risk, giving everything to the company in hopes that it will pay off “one day.”

On the other end, your average Joes do everything they can to escape their careers. They put in minimal work, and they spend all their free time gossiping about celebrities they’ll never meet, worshipping athletes they’ll never be, or stressing about politics they have no control over.

Instead, you realize you’re not exactly free if you still have to go to work every day. So you decide to speed up the process towards freedom by using your spare time a little more efficiently.

You realize there’s a market for just about any hobby, and you can use your interests to build a third income source.

  • Your creative outlet project and passion for helping people turns into a surprisingly profitable blog.
  • Your love of cute puppies turns into a $30 per day dog sitting business on Rover.
  • Your flea market browsing turns into a furniture flipping hobby, earning you $2,000 a month.
  • Your elaborate imagination turns into a self-published ebook business making $8,000 a month.
  • Your side-gig as a yoga instructor turns into a YouTube channel earning $15-40,000 a month.

Or maybe you’re more the type to roll up your sleeves and get down to a profit. So you start a completely random niche website earning $2,000 a month, or an artisan subscription box service that grosses $50,000 just in its first 6 months.

The possibilities are endless.

Creating Multiple Revenue Streams

Before you know it, you’ve got passive and active income sources showering you with money from all sides. Land, air, and the sea – you’ll have money coming from every direction, and the added income sources will help you build wealth faster AND make you more resilient to factors out of your control.

Build up your own triad of income sources, and your finances will have enough layers of security to make America’s nuclear defense systems proud.

Readers, are you pursuing multiple income sources? We’d love to hear about them!


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  • Millennials Are Getting Screwed on Home Prices… Right?
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Filed Under: Early Retirement, Saving Money

Reader Interactions

Comments

  1. The Savvy Couple says

    August 17, 2017 at 8:15 am

    What an interesting and thoughtful article as always. Love how you connected nukes and finances hahaha.

    You hit the nail on the head. Diversification is so important in your income stream along with investments. A well-diversified portfolio will prevent an “attack” from completely destroying you.

    Reply
    • The Money Wizard says

      August 17, 2017 at 10:35 am

      Thanks Kelan. I couldn’t help but see the similarity, and I had a lot of fun writing the article.

      Reply
  2. Lance @ My Strategic Dollar says

    August 17, 2017 at 8:16 am

    Reading this was awesome. Great job relating current events to financial topics to help people understand what is necessary to get ahead.

    Reply
    • The Money Wizard says

      August 17, 2017 at 10:34 am

      Thanks Lance!

      Reply
  3. Courtney @ YourAverageDough says

    August 17, 2017 at 9:42 am

    Awesome job making today’s current events relevant to the finance world (without talking about stocks that would boom from a potential war).

    My side hustle is blogging, although it’s certainly not lucrative yet. We also have a good chunk of our money in investments, which provides income via dividends and such, but we don’t plan to use that money unless/until absolutely necessary!

    Reply
    • The Money Wizard says

      August 17, 2017 at 10:33 am

      Thanks Courtney, and good luck with the blog!

      Reply
  4. Steveark says

    August 17, 2017 at 9:54 am

    Slight correction. North Korea has never launched a nuclear missile, they launched missiles with dummy warheads. Launching a real nuclear tipped missile is virtually unheard of, the US only did it once out of over 1,000 nuclear test detonations. The chances of the missile going off course and missing the target range are far too high to ever test warheads in that manner. Actually among the major nuclear powers there is an agreement that limits all future tests to underground blasts only.

    Reply
    • The Money Wizard says

      August 17, 2017 at 10:33 am

      Good point.

      *North Korea launch an intercontinental ballistic missile capable of carry a nuke into space.

      Reply
  5. Lily @ The Frugal Gene says

    August 17, 2017 at 11:44 am

    Fascinating read MMW! Its true there’s a market for any money making scheme these days and that’s what makes the world so fun haha. A single income is a dangerous route to go, that’s why while hubby works, I find side hustles.

    Reply
    • The Money Wizard says

      August 17, 2017 at 1:28 pm

      You bring up a good point. A couple can diversify their income simply by having jobs in unrelated fields. If those couples also starts investing and running side businesses, they’re almost invincible.

      Reply
  6. Jane @ Cash Fasting says

    August 18, 2017 at 7:42 am

    “Diversify your income like a nuclear boss” hahahaha I love it! You’ve drawn quite a parallel here; it’s a good one. I’m working on multiple income streams, but as of right now all I have is my 9-5. I don’t make money blogging, and I only just started investing this year. I’m definitely not as prepared financially as the U.S. is with nukes.
    Great post! This one was so fun to read 🙂

    Reply
  7. Mrs. Farmhouse Finance says

    August 21, 2017 at 6:35 am

    Great post! We have started investing and definitely don’t shy away from the side hustle, but I really want to ramp it up. I feel lucky to have a job that will be pretty secure once I’m tenured, but it would be nice to not have to rely so heavily on my teaching salary. Ideally, I would like to minimize my taxable income from teaching and get some other forms of passive or nearly passive income going.

    Reply
  8. Passive Income M.D. says

    August 21, 2017 at 10:58 am

    I feel exactly the same way you do. Having multiple streams of income is the key to true financial freedom. My focus right now is to build up the investment and side income pillars as much as possible so that the career is just for fun. Nice post!

    Reply
  9. Nevada Smith says

    August 21, 2017 at 2:07 pm

    I hope to still contribute big time to my Fidelity 401k (invested in index funds) so that I can reap 3% dividends during my early retirement.

    All the best,
    Nevada

    Reply
  10. Retire Before Dad says

    August 21, 2017 at 9:02 pm

    Great analogy. Loved this post!

    Reply
  11. DNN says

    November 12, 2017 at 6:55 pm

    It’s pretty dumb for anyone to ignore the side hustle in today’s era of information technology and not putting the power of the internet to work for them by blogging from home or working from home in affiliate marketing. The internet is a great way for anyone to supplement their income, build a quite financial empire from their home computer of laptop, and earn their way to financial freedom.

    Reply
  12. JoeHx says

    November 27, 2017 at 11:07 pm

    I always feel good when I see a list of things that need to be done and I can check them all off. Of course, I’m always looking to increase and diversify my streams of income. Right now, aside from my main job, I have my blog (which basically makes nothing), t-shirts, online surveys, receipt apps, and some crypto. Oh, and my 401k and IRA, but I don’t include those as income in the same way as the other stuff.

    Reply
  13. Gord Collins says

    March 2, 2021 at 8:44 am

    Good point that a single income with a corporation is a very risky choice. The side hustle, aka your real passion is the way to financial success. Takes commitment of course. The big challenge people have is finding something with potential and then scaling it up so it produces. It’s a big challenge for anyone, given how much competition there is right now.

    Reply

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