7 Types of Income

7 Types of Income

One of the fastest ways to grow your wealth is to generate income from multiple avenues. This makes your money grow exponentially.

In your quest to build wealth, it is important to know and understand that the more sources of income you have, the faster your wealth can grow. The possibility of attaining your financial goals can drastically be increased with multiple streams of income.

Wealthy people all around the world generate income from multiple sources. They understand the power of multiple income sources in their wealth-building endeavors. No wealthy person the world over has one source of income stream. Their wealth is created, fed, and sustained through the concept of multiple streams of income.

Unfortunately, most people have only one income source: their employment. They work to receive a paycheck at the end of the week or month.

When you generate income from multiple sources, you can reduce the risk of relying on any one income stream, especially in this uncertain economic environment in which we have found ourselves. And increase the odds of enjoying financial stability in your favor as your earning potential grows over time from multiple sources.

Building multiple streams of income is no longer a luxury; it has become a necessity if you will ever make a reality of your financial dreams and aspirations. Having multiple income streams is a powerful wealth-building tool, with it you can increase your wealth passively.

Tom Corley, author of “Rich Habits,” studied the habits of millionaires during a five-year study of the rich and poor. Here’s what he found as it pertains to most self-made millionaires and their income streams:
1. 65% of self-made millionaires had three streams of income.
2. 45% of self-made millionaires had four streams of income.
3. 29% of self-made millionaires had five or more streams of income.

Now here are seven streams of income that you can incorporate into your wealth plan:
1. Earned Income: Money earned from a job or by doing work for someone else. The money you receive from a 9-5 job is known as Earned Income or Active Income. This is because you have to be actively involved in an activity. You must do something before you earn. This is the most common source of income; as a result, most people begin their financial journey with earned income.

2. Business Income: This is income that is generated by owning and running a business. When you run a business that provides products and services to customers at a price that is higher than your running cost, it becomes easy to earn an income from the Starting an online business can be a great way to get started because costs are generally lower and margins can be quite high. Also, running an online business allows you to leverage technology and social media to reach more customers and generate more revenue.

3. Interest Income: Money earned by lending money to others. If you lend money to a bank or individual, any income you receive from such a transaction is classed as Interest Income. This could be your bank paying you interest on the amount of money in your savings account. Or it could be from buying government bonds. It is essentially money accrued by loaning money to a bank, government, someone else, etc.

4. Rental Income: This is income from a property or asset you own and rent out to others to make use of for a duration of time at an agreed price. It could be your house or land or car.

5. Dividend Income: This is money you are paid for owning stocks or part of a business or company as a shareholder. When you buy shares in a company, you become part-owner of that company and are entitled to dividend payment which is a portion of the company’s profits.

6. Royalty Income: This is what you are paid for licensing your intellectual properties such as ideas, processes, patents, and copyrights. You will receive a royalty for your books or songs.

7. Capital Gain: This is the money you make when you sell your Investment…..stocks or real estate for more than you bought it. It is money generated from an increased value in an asset you own. If you have assets like shares and property and they appreciate, then the difference between what you paid for them when they were bought and what you receive when you sell them is called capital gains income.

It’s a new day for you!

To Your Prosperity

Sharon Akinoluwa

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