Build Wealth Like A Millionaire
“The Seven Streams of Income”
By: Latrice Goodwine, GIRL WHAT’S IN YOUR P.U.R.S.E.?
Budgeting, saving and having good credit are very important factors to your overall financial health. However, you CANNOT budget, boost your credit and/or save your way to wealth! Sorry, it’s just not going to happen. It takes money to make money. Think about it, if you have no way of generating income, how will you continue to survive?
After doing some reach; I discovered that the average person has only one to two sources of income. However, the average millionaire has SEVEN sources of income. So, the only thing that could be stopping you from building your way to millionaire status; is the number of income streams you have coming into your household. Below are the SEVEN STREAMS OF INCOMES that the average millionaire has.
The first way and the most common way is earned income. Earned income comes from physical or mental work you perform with your time in order to get paid. This income comes in the form of a salary, hourly wage, contract work and/or you are working day-to-day inside your own business. Please note that having more than one job is still one source of income because you still have to “work” for it.
Earning an income can only take you so far when obtaining wealth. There are only so many hours in a day that you can “work” to “earn” money. Better yet, what happens when you reach an age or circumstances occur leaving you with the inability to work for a living? This is why the other forms of income are so important.
Dividend income is when you own shares of stock or mutual fund and the company distributes at least a portion of their earnings to their shareholders. With dividend income, you have the option to purchase additional shares or put it in your pocket. There is no physical or mental work required of you. You invest your money and on the specified date (from the company) you will be paid a dividend income.
Income you earn from lending money. When you purchase an annuity, bond, certificate of deposit (CDs) and/or open interest-bearing checking, savings or money marketing account; you are loaning the entity your money over a certain period in exchange for interest payments. Usually the riskier and/or the longer you allow the entity to borrow your money; the higher the interest payment will be. For example, an 18-month CD will probably pay a higher interest rate than your checking account.
Residual income is money you continue to earn on a daily, weekly and/or monthly basis after you create and sell a product once. There are some careers that allow you to earn residual income such as, life insurance agents, medical supply sales representatives, employee benefits sales consultants, and etc. In addition, creating intellectual property is a great way to generate a residual income. For example, when you write a book, create a digital course, develop a program, have a membership program, record music and/or movie – you do it one time and continue to sell or generate income from it repeatedly.
CAPITAL GAINS INCOME
Capital gains income is when an asset (investment or real estate) appreciates in value. Your asset becomes worth more than the purchase price. The gain is not realized until after you sell your asset/investment. For example, if you purchase a piece of real estate for $50,000 and after three months sell it for $75,000; your capital gain is $25,000.
You get rental income when you are paid for allowing others to use your stuff. Most common rental income comes from some form of real estate (rooms, apartments, houses and/or commercial space). However, you can rent other things such as equipment and liquor licenses.
The last form of income is profit income. This is simply buying low (wholesale) and selling high (retail). You don’t physically manufacture the product all. You’re simply buying it at one price and reselling it to others at another price.
Now, that you know the seven ways the average millionaire makes their millions – how many sources of incomes do you have?