One of the greatest secrets of the Ultra Rich is something that should not be a secret at all. They say that most millionaires have 7 streams of income. What that means is they have income coming in from seven different sources, it does not mean however that they are out there working seven different jobs. In fact there are many different types of income and they are not equal. Today we're going to be going over 8 of those types of income.
1. Earned Income - Income from working a job
This is the most common type of Income that everyone is familiar with. This is income earned from working a job. Any 9 to 5 style job no matter if its a McDonalds 'red hat' or if its a CEO of a major corporation, if you are trading your time for money then it is earned income. This, although being the most common, is perhaps the least efficient way to make money. If you'd like to learn more about the differences in trading time for money and earning money residually I highly recommend reading Rich Dad Poor Dad or Cash Flow Quadrant by Robert Kiyosaki .
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2. Profit Income - Income from buying and selling
Profit income is income earned from buying something and selling it at a higher price. This could be owning your own business, it could be retail Arbitrage on Amazon or Ebay, it could be making Candles, Soaps, or other Crafts to sell on an Etsy Shop, Or maybe even selling on Facebook Market Place. This is the basic business model that pretty much all businesses follow. When you buy something at the store they likely didn't make that item, they purchased it from a wholesaler for a lower price and are selling it to you for a profit. In today's world you don't have to have a brick and mortar shop to earn this type income, you can create a Drop Shipping store using services like Shopify, Ecwid, or some other service, or you can simply buy one Here. Or you can create an Amazon FBA store where you sell things bought on Alibaba/AliExpress.
3. Interest Income - Income from lending money
Income earned in this category is income earned from lending money out either to people, businesses, banks or any other entity you can make money collecting earned interest. Lots of people take advantage of services like Lending Tree or Lending club to earn money from giving out loans to people who usually cannot get loans from a bank which in turn means there will be a higher interest rate on the loans which benefits the lender. Interest income can also come from High Yield Savings accounts or from lending money to people directly although these are not as desirable as using a lending service.
4. Dividend Income - Income from Owning Stocks
Dividend income is income paid to you as a reward for owning a particular stock. A dividend is a distribution of profits by a corporation to its shareholders. When a corporation earns a profit or surplus, it is able to pay a proportion of the profit as a dividend to shareholders. You can make a livable passive income from dividend stocks with enough invested. For advice on stocks we recommend you check out Motley Fool. There are many different service's you can use to buy stocks Acorns, Stash, Webull, Robinhood, M1 Finance just to name a few.
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5. Rental Income - Income from renting a house or other space.
Rental income is income earned from renting out a home, apartment, or other space for a profit. This one is pretty straight forward you have a space available either a home or duplex that you own that you can rent out to tenets, or you have a room that you can rent out on AirBnb or a similar service. Additionally, you can rent out storage space in your home, garage, shed, etc. I know someone who rents out a space in their yard for someone to park their RV during the winter. You can even rent out your car when not using it with a service like Turo, HyreCar, or one of the other services out there.
6. Capital Gains Income - Income from assets gaining in value
Capital gains income is income gained from a particular asset gaining value. According to the IRS the most common capital gains are realized from the sale of stocks, bonds, precious metals, real estate, and property. Basically in it's simplest terms this means that you bought something and now its worth more when you sold it.
7. Royalty Income - Income from others using your content.
Royalty income is income earned from an intellectual property of yours. This could be music you produced, a book or eBook that you self published, a course you created, a patent you hold, a commercial you were in, or even being a voice actor for someone else's book to put on Audible. One thing I really enjoy doing for some extra income is voicing books for people using ACX.com Royalty income is the most common form of residual or passive income which leads us right into the eighth type of income.
8. Residual Income - Income you continue to get paid long after the work is done.
Residual income, commonly referred to as Passive Income by many on the internet, is income you continue to earn months or even years after you've completed the work. For more detailed information on how you can make passive income check out some of our other articles or subscribe to our YouTube Channel
There are literally thousands of ways to earn passive income. Some of these include creating an online course and selling it on Udemy or another host site, creating a YouTube Channel, writing a book, creating a successful blog, Drop Shipping, Print on Demand, Making an app, Network Marketing, Affiliate Marketing, Voicing audio books, Negotiating Contracts, Overrides on insurance sales, selling advertising space on your car, and so on. You're imagination is the limit when it comes to ways to earn residual income. Remember to sign up for our Newsletter and Subscribe to us on YouTube for Weekly ideas and how to guides on making residual (passive) income.