We all see this quote on social media, millionaires have an average of seven streams of income. We can also read this quotes in most personal finance articles online.
In order to become a millionaire, on average, you need seven sources of cashflow. If you want to become a millionaire, the first question you need to ask yourself is, how many sources of income do you have? You probably have two source of income like most people do.
We have job at the same time a side hustle or the interest income we get from our bank savings account or investment. You have 2 out of seven. To become a millionaire, you need 5 more income streams. You can simply add another income streams by opening an investment account in your bank. So you need 4 more income. You may be wondering what other sources of income can you have. Don’t worry, here are the most common types of income streams which you can build:
Earned Income
Earned income is the cash you get as payment for services you rendered to your company or client.
One great example of this is your current work. You go to office from 9 to 6 in exchange of your monthly income or having a freelancing work as an article writer is still an earned income.
Interest Income
Is type of income that gives you cashflow from earned interest like MP2 or Pag-IBIG2, time deposit, bonds, money market funds or as a result of lending your money to an individual or institution.
This is a low-risk source of passive income. This is how you can make your money work for you. This type of income protects your wealth against inflation but it will not grow significantly.
Profit Income
Profit income is the earnings you get from selling goods and services in your business. This type of income requires a lot of effort, time and money from your. But if you are passionate with your business and you are willing to do the work then, this type of income is good for you.
Dividend Income
This type of income is similar to profit income but it is more passive since it usually comes if you are an investor of another company or business.
If you are a shareholder of a cooperative then you can enjoy earning your dividend. You can also become a shareholder of a dividend-paying companies if you invested in stock market.
Capital Gains
Making capital gains is better in the stock market. Just buy shares of a company, wait for the stock to go up and sell your profit.
Aside from stock market, you can also make this income from art, jewelry, collectibles, real estate and even websites. Have you heard about house flipping or website flipping? You buy a house, wait for a year or two to sell the house to a higher price.
Rental Income
To make immediate money out of your properties, then rental income is the way to go.
Aside from apartment and condominium rentals, you can also explore office units or commercial spaces. Even dormitories as well.
Royalty Income
Royalty or residual income is a type of income you earn just by doing the work one-time and earn multiple times from your work in the form of royalties like becoming a book author, songwriter, inventor or business franchisor.
Have you heard about J.K. Rowling or Sia who made millions of money because of having a royalty income? It is one of my desires to earn this type of income stream.
If you are a book author, songwriter, inventor by heart then pursue it. You’ll never know, you become the nest J.K. Rowling or Sia.
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