7 Income Sources That Rich People Have

how many income streams are you your friends and family aware of how many income sources do you currently take advantage of rich people don't just have one income source like many of the working-class they don't limit their income earning to just when they're clocked in at their nine-to-five trading their time for money for days on end in fact the average millionaire has seven different income sources how do rich people earn income in seven or more ways earned income is how most people make their money but there are many other income generating possibilities to take advantage of there is much more to earning money than what most people are aware of in order to become financially independent you must have money work for you instead of only working for money if you enjoy videos about money personal finance and investing all topics that will help you better your financial future consider subscribing to the channel and hit the notification icon to be notified of new videos if this video is helpful make sure to hit the like button earned income by far the most common type of income in the kind that everyone knows about earned income is that received from working such as a job for a paycheck this is when you're compensated based on the work that you do many workers are paid hourly in their compensation is directly correlated with the amount of time spent working for someone else it can also be when an individual is self-employed and they work on an hourly basis or get paper tasks or even commission based in all of these circumstances the money must be worked for to get paid and stops coming in as the working stops earned income is usually taxed at a higher rate due to the fact that there are fewer tax deductions available many of us have heard the acronym for job just over broke people are sometimes unable to see opportunities beyond working income believing the myth that a job is stable and secure it allows you to stay in your comfort zone with very little risk while that might not be something to disagree with the risk lies within relying solely on that income source in not diversifying into other streams of income the actual risk of a single source of income often from an employer is a very real risk indeed fit income profit income is money earned from selling something for more than what it cost to make or purchase when a grocery store sells items for more than a cost to purchase something they're earning money from profit a car dealer earns their money when they sell cars for more than they purchased them for in earning profit and the loans and maintenance services they offer earning this type of income takes a decent amount of work to begin is it typically requires a start-up of the business but you don't necessarily need to create the next Walmart or Amazon to earn some money in this way a Salesman could go door-to-door selling a cleaning product for more than he purchases the product for which would require very minimal startup costs and overhead people working for earned income often have a difficult time earning income like this because it requires some degree of courage in terms of invested time and capital to begin also it may require an uncomfortable amount of time away from the earned-income job in order to begin a new venture being entrepreneur and rake in the profits you need to choose a product or even a service that you want to sell perhaps something that draws on personal passion this could be cars clothing or even opening a restaurant by presenting the product well and treating your customers well income through profit can be financially very rewarding interest income earning interest is as simple as lending your money to someone for a charge the interest received by lending will depend on how long the money is lent for in what the money will be used for for example if you were lending money to an investor who is using the money to flip a house in a short amount of time the interest rate will be much higher than if you're lending it for the purchase of a rental property which will be held for a long period of time rental properties are usually held for a long time usually years while buying homes to fix up and sell happens very quickly although the total interest earned might be similar the terms can be vastly different interest income could mean lending your money to an individual who's going to start their own business lending it to someone who wants to buy themselves a new car or simply putting the money a bank account or lending it to the government in the form of Treasury bills a payday loan company earns money by lending to individuals based on the agreement that the borrower is going to repay the loan upon receiving their next paycheck this is one form of income that can be completely passive once arranged not requiring any effort other than that spent acquiring the money to begin however the amount you're able to earn is limited to the amount available to lend in the amount the borrower deems fair to pay in interest charges dividend income dividend income consists of payment shareholders received for simply owning a dividend paying stock such as 3m coca-cola Walmart or Johnson & Johnson if you own an index of the sp500 for example you'll receive approximately 2% of your holding value in the form of dividend payments which are usually paid out quarterly individuals with a sizable amount invested can often achieve financial independence by living solely off these dividend payments allowing the rich to get richer so to speak in other words the principle of the investments increase while investors receive some cash flow many retirees choose to live off their dividend payments provided they have enough invested to fund their monthly expenses think of dividend income as cash flow from a rental property the property has the potential to appreciate while still providing cash flow rental income this type of income is money most commonly received for renting out property usually houses or apartments are rented to tenants in exchange for a monthly sum but the real estate could consist of industrial spaces warehouses storage trailers and even land spaces at shopping centers are likely rentals that are paid for on a monthly basis many of those retail stores prefer to rent space instead of purchasing and managing their own properties which allows them to spend more time on their products and services instead of dealing with maintenance repairs extra bookkeeping and other property management tasks there are many different types of assets that generate rental income not just the single-family homes and apartment buildings that are most commonly thought of people rent boats campers cars tools in the list is virtually endless pretty much every type of real estate can also be used to generate this type of income in order to earn profit from rental income the money received needs to pay the expenses of the property or item and hopefully provide money left over which is known as cashflow capital-gains this type of income is received from the sale of an asset that is increased in value a home that is increased in value a stocks appreciation or an antique car that was purchased for $10,000 and sold for $20,000 are all examples of this capital gains income is most commonly received from stocks or real estate but there are unlimited opportunities to earn money in this way however unlike other types of income the gains can only be realized when the item is sold for a profit for example if you own a stock that has doubled in value the only way to take that money is to sell the stock the amount one can potentially earn from capital gains is limited to how many assets they can buy and sell somewhat limiting the passivity royalty income money receive for intellectual property is known as royalty income this is most commonly in the form of copyrighted material such as a song or a book there are other types as well like artwork in the form of logos designs slogans or patents this type of income once created can produce a passive income stream for years for the original artist or vendor for as long as the material remains protected under the law if you have intellectual property that you want to receive royalties from there are two ways to do this you could sell the property and receive payments from the buyer based on a percentage of the revenue generated from that property for example you can sell the copyright to a book outright and receive royalties upfront and receive a continuing stream of revenue based on the sales of the book secondly you may keep the ownership of the property and get royalties from someone for the use of the property this is called licensing royalty fees and payment amounts can be set in a variety of ways in a franchise situation like a fast-food restaurant these can be set as a fixed or variable percentage of gross sales in many cases there is a minimum royalty royalties are another great source of income for someone who produces a product or service and cashes in on that intellectual property if you want to earn more money it's imperative to not limit yourself to solely earned income adding more income sources to your life will allow you to start earning passive income money will you sleep - eventually limit the number of hours spent working a job being stuck in the rat race trading time for money there are only so many hours that can be spent working for earned income so start earning money the way the wealthy do with these other income opportunities you

Channel: Chris Invests

Views: 131,583

Keywords: multiple income sources, multiple income streams, seven income streams, seven income sources, dividend income, royalty income, capital gains income, rental income, 7 income sources, how many income sources are there, how to create more income sources, how to create more income streams, passive income sources, earned income, profit income, income sources that rich people have, income sources that the wealthy have, how to create multiple income streams

Id: KgLUZso8rdI

Length: 9min 58sec (598 seconds)

Published: Thu Jul 18 2019