As part building my path our of Corporate America, I need to build multiple sources of income to replace (ideally overtake) my regular day job salary. Let’s look a the common types of income that millionaires have for ideas.
Studies have reviewed the income streams of millionaires and they generally have 5 to 7 sources. What’s interesting about this that they’re earning income from multiple sources at the same time.
My theory is that we can use one income stream to build itself (reinvestment), as well as build others. In that case, take the earnings from one source to start building the next stream.
7 sources of income to consider
Earned Income is be income from your day job. It is the money that you earn by working for someone else.
If you own your own business and sell things, you make a profit by selling the products for more than it costs to make them.
In most cases interest income will come from the bank or government paying you interest in money that deposit or invest here. Otherwise it would come from receiving an interest payment for money that you loan to a person or entity.
This stream is one of my favorites. Dividend income comes from investing in a company and receiving income, usually quarterly back from the company as part of them distributing a portion of their income.
This would come from renting out property that you own and receiving income for doing that. For me instead of buying properties, I’m investing in Real Estate Investment Trusts (REITS) that distribute their earnings in the form of dividends.
Simply, this is selling something that you own for more than you paid for it. Commonly this is seen if you buy and sell stock or other investments. Usually I see this through Mutual Funds where the managers buy and sell stock throughout the year.
Similar to what you see in the music industry, this involves letting someone else use your idea and them paying you a fee to do that.
How to build multiple sources of income
Building multiple sources of income at once is likely impossible, because you need money in order to start most income streams. Focusing on two would work better.
For example use some of your earned income to build the next stream, such as dividend income. Then the dividend income to continue to build that stream. Fortunately since most of these income sources are passive, will allow you to grow them at the same time (in the future).
Over to you. What other sources of income are you considering?
Are you working on your investment income? Or have you found something interesting to help replace your day job income so that you can retire from Corporate America early?
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