Have you thought about branching out into making different types of income streams? Here are some ideas based on where multi-millionaires generate income.
But don’t worry, you don’t have to be a millionaire to take advantage of these kinds of income. It’s ok to start small and go from there.
The 10 Types of Income Streams
In general, the 10 types of income streams are:
- Wages and salaries (money you earn from a job)
- Self-employment income
- Taxable and tax-exempt interest income
- Dividends from stocks
- Income from real estate rentals (including real estate mortgage investment conduits)
- Income from partnerships, S corporations, and estates
- Annuity income (from a contract you make with an insurance company)
- Capital gains (from selling an investment or investments)
- Royalties (for example, from music, books, or apps)
- Pension income (if you’re lucky and worked for someplace that offered this)
If you’re curious, according to the IRS, “the presence and amount of tax-exempt interest income is much more indicative of wealth”.
This is likely because the wealthy often do things to reduce the income they get taxed on — so other income sources may show as lower.
7 Good Sources for These Types of Income
Looking for ideas on how you can put these into action? Here are 7 good sources. And while you may not be able to do all of them, you can probably do some of them. Every little bit helps.
- Get a higher paying job or jobs, and/or ask for raise at your current job
- Invest in things that are likely to earn interest or pay dividends. For example, you might choose to invest in index funds that track the market, or in tax-exempt bonds.
- Rent out a property. (This can be anything from a room where you live, to long term rentals, to starting an Airbnb.)
- Royalties from music, books, apps or other creative works. Writing a book can be low or no-cost if you self-publish. And if you know how to code, you could create and sell an app relatively inexpensively. (The Pay Off Debt app I created back in 2008 still brings in money.)
- Income from providing services, such as dog walking, babysitting, or delivering things.
- Income from selling products online or in stores
- Ad revenue from a blog or website
Things to Keep in Mind
There are a few things to keep in mind if you’re considering adding additional streams of income.
First, make sure that the source is reliable and has the potential to provide consistent earnings. You don’t want to put all your eggs in one basket, so spreading out your income sources is key.
Also think about how much time and effort you’re willing to put into each stream. Some sources will need more work than others, so it’s important to find a balance that works for you.
Finally, remember to stay organized and keep track of your different income sources. This will help you stay on top of your finances and ensure that you’re making the most of what you make.
