One key aspect of building a successful life is good financial management. This includes curbing excesses and creating new and lasting income sources.
This is so whether you’re just getting started on your wealth journey or you’re a seasoned investor in the millionaire category.
This means building multiple ways to earn money is an important trait of a successful life.
But here’s the interesting thing: most successful people started with one or two income streams, and as their income and influence grew, they diversified and built other wealth streams.
What is an income stream?
An income stream is a source or channel through which money is earned. The use of “stream” means it is not one-off earning opportunity but a continuous channel of receiving money in exchange for the provision of some value at a former, present, or later date.
Why should you build multiple streams of income?
There are two main benefits of having multiple streams of income:
1. Financial Security
Having multiple sources of income provides a level of financial security and buffer in the event one stream of income dries up.
A good example was what happened during the COVID pandemic where some people were out of work. Those who had other means of income beyond their salary were able to manage that season of their lives much better. We can create this buffer by starting and growing a side hustle.
2. Financial Freedom
This is an important reason to build multiple streams of income. A survey of over 1,012 employees in the workplace found that some were willing to do unfulfilling work (38%), endure high stress (24%), and defer self-employment opportunities(45%) to retain employer-sponsored health care coverage.
Having different sources of income gives your choices. It gives you the freedom to choose the life you want and chase the dreams that matter to you. This is a resounding reason why every single one of us must create and grow other channels of wealth.
7 Popular Income Streams of Successful People.
Check out this list of income sources to see which ones you already have and which ones you need to consider cultivating this year and in the future.
1. Earned income
This is the most common type of income and some of us barely move past this time of income. So, earned income is income that is directly linked to time and productivity.
It includes a salary or commission paid for the provision of services.
2. Dividend income
Dividend income is the income earned from stocks in companies and ventures. Dividends are derived from a portion of the profit of a company. Which means that a company must earn a profit first before it can declare a dividend.
To get started with earning dividend income, you should consider investing in the stock market, and you should consider dividend paying stocks like Coca cola, Apple, and Bank of America (this is not financial advice). I have personally received dividend from Apple and Bank of America.
3. Royalties
This is a more advanced income that is often received from earnings from creative endeavours like books, music, art, etc.,
Did you know that Michael Jackson’s estate still receives millions of dollars in royalties from his music catalog? His estate was reported to have earned about $115 million in 2023, most of which was from a Broadway musical about his life.
Many creatives – writers, artists, actresses, and many more still receive income from the sale or use of their creative works years after.
This is one of the best sources of passive income. Why? Because it usually doesn’t require additional work from the owner after that initial time spent in producing or creating the material or art.
4. Rental Income
This is income received from leasing your property or equipment. Investing in rental properties is one of the best ways to ensure a steady stream of rental income from property, equipment amongst others.
However, unlike some of the options on this list, the stream of income often requires a higher initial investment or funds to purchase or lease the property.
5. Profits from Business
One of the fastest ways to build your wealth portfolio is to start or to invest in a profitable business or side gig. You have probably heard of people who started side businesses to supplement their income, and within a few short years the income from their side business surpassed their 9 to 5 job.
For instance, Rosemary Groner starting blogging in 2014/15 and within a few years, her blog was making over $20,000 per month.
6. Interest Income
There are some investment options where you receive additional income from advancing money to companies, individuals, or governments. The interest that accrues is usually tied to a specific duration where longer tenure or higher amounts incur higher interest.
Examples of this type of income are interest earned from peer-to-peer lending, corporate and government bonds, and commercial papers.
7. Capital Gains
Capital gains is the income received from the sale of an item at a higher rate than initial cost of purchase. For instance, if you buy a used Toyota Corolla for $7,000 and you sell it for $7,500. The $500 difference is the capital gains from the purchase.
How many Sources of Income do You have?
There you have it, seven incredible income streams that will bring you closer to achieving your wealth goals.
How many of these streams of income do you currently have?
If you would like to determine this and figure out how to increase or create new income channels, then you should get your hands on this simple and easy-to-use Streams of Income Worksheet.
With this Worksheet, you can track your income progress, and determine the things you need to do to build new wealth paths.
Get the Worksheet here.
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