Let’s face it. We all want to be making more money. The more money you have the more you can do, the more you can buy, the more money you have to invest in your future. This can be achieved through 8 different types of income.
Making more money isn’t just about developing your skills needed to do your 9-5. Although you should always be striving to increase your skillset. If your main income is your daily job but you are looking for ways to create new income streams these are the types of incomes available to you!
The 8 Different Types of Income Streams.
- Earned Income- Earned from working a job.
- Profit Income- Earned from buying and selling Products.
- Interest Income- Earned from Lending money.
- Residual Income- Earned when the job is done and you still get paid.
- Dividend Income- Earned through owning stocks/companies.
- Rental Income- Earned through renting out properties.
- Capital Gains Income- Earned through the sale of Appreciated Assets.
- Royalty Income- Earned through someone else selling your idea(s).
Compare Investments
Each type of income is unique in its own way and how you start to acquire these incomes is unique in each way as well. Some of these incomes take a great deal of time to create but in the long run, it can make you more money than the others. A lot of people are starting to make and develop side hustles. This can not only be a great hobby but you can get paid to do it through different income streams!
If you are interested in increasing your income and making more money than this is where you need to start. You need to learn the income streams available to you and start developing the skills and Assets needed for extreme wealth.
Earned Income- Earned from working a job.
Earned Income is by far the most common type of income. Most people have a job and are making this type of money. You go to work and put in your time doing the necessary tasks for the day and then you go home.
The average person is working about 40 hours a week or full time. this equates to about 2000 hours a year spent doing your job.
Generally, you are selling your time and whatever skills you have for an hourly wage. Some people may be making $14 an hour while others may be making $45 an hour. Each is still the same type of income, Earned income.
There are also different types of pay within the Earned income. Some people are paid by the hour and some are paid a salary where they are paid an even amount of pay every week and are expected to work the desired amount of time to make up for that pay (full time).
A lot of the salary positions tend to be more of a supervisory or management position. This is due in part because while you may only be working 40 hours a week some of the upper management may need to work 60 one week and 35 the next. By making it so that the salaried employee needs to be accountable for their hours they get a little bit more flexibility as to when they are working.
Either way, working by the hour or getting paid a salary the income is and Earned Income. You are trading your hourly time for a specified amount of pay. The problem with Earned income is it’s only scalable up to a certain point. You can only get so many raises and you only have so many hours in one day.
These two things together mean that you will eventually peak out in the amount of income you can generate. Not all of the other incomes are like this and you may want to consider starting to make a few of them.
Profit Income- Earned from buying and selling Products.
Profit Income is one of the oldest ways to make money and is happening all around you right now. The way to make Profit Income is to buy something of value for one price and sell it for a higher price to someone who can use it.
This type of income is what stores are all about. The way a store makes a profit is by buying their product from a manufacturer or supplier and adding a percentage to the price and selling it to their customers.
You can get involved in Profit income too. You can start small and buy locally used products then increase the asking price a little bit and find buyers. eBay is one of the big auction sites where people can make full-time wages through profit income. Buying local products and selling them throughout the world.
The possibilities are endless with Profit income and best of all. IT’S SCALEABLE!
Having a scalable income stream is one of the best possible attributes for any income.
The scalability is buying and selling more and more products increasing your overall profit and income into your pocket. You no longer only have to buy and sell to local people in your area. You could start an online store using Bluehost and be up and running on the first day!
With a little marketing and building some connections, you can be making some real money quickly and efficiently. You can go around your local area and visit garage sales purchasing good items for less than $5 then resell these items for $7 making a $2 profit! $2 may not seem like a lot but when you start to sell more and more the amount of profit adds up quickly.
Bluehost is the Leading Online Site building Platform. Right now Bluehost runs with WordPress which is the Best site builder out there. WordPress is running more than 30% of the internet!! That’s a huge amount of content and shows just how great of a platform they are.
Interest Income- Earned from Lending money.
Earning money from Interest Income can be very simple or it can get a bit more complex. See, when you have your money in your bank account you are lending it to the bank for as long as it’s in your account. Or on the other side, some people will lend their money out to people who are starting a new business venture.
Having your money in your bank account has significantly less risk than lending to a new business venture but because the new venture has more risk you can get a lot more Investment income. Some loans to small businesses are along the same lines as a credit card paying 19% or more!
The risk is the difference though. If you decided to lend your money out to someone making a new business there is a much greater chance that you could lose your money without any way of recouping the loss.
One of the best things about interest income is that you can use an amazingly powerful force called Compounding Interest. Compounding Interest is getting interest, on top of interest. This can scale up and make exponentially more money over time.
For example, If you have $1,000 making 5% interest in a year which would equal $50 the next year you would have $1,050 making interest. If your interest rate is still 5% then you would make $52.50 the second year. Now after 2 years you have $1,102.50.
If you have $1,000 invested compounding every year for 20 years at 5% you would end up with $2,712.6. Because of compound interest, you would make $1,712.64 in interest over that time.
Simply taking some more of your money and putting it into a high-interest savings account can increase the amount of interest you accrue my potentially 1-2%. Adding 1-2% to your monthly interest can add up to be quite a bit of money over time.
Residual Income- Earned when the job is done and you still get paid.
Residual Income is an amazing income to develop and receive because it keeps on paying you even though you aren’t working for it every day like Earner Income.
This type of income can take some time to build but once you are done and you have started to see returns you continue to get paid even though you were done the job/product a long time ago. You can build residual income and have it continue to pay you for years into the future.
Some of the things you can build and develop are Affiliate marketing, make a blog, use social media to sell products and services.
There are so many different income streams you can build outside of just those examples. One that works GREAT is building a blog.
A blog allows you the freedom to work on it when you have time. It also allows you to create something all about you and what you enjoy. In doing this you will attract like-minded people to your blog and you can input advertising and some Affiliate marketing to start making the residual income.
Imagine right now if you spend a little time each day building out your blog of website and soon you are making several hundred into the thousands every month for something you did months ago?
It is very real and very possible to build a strong Residual income through your site. This blog is generating Residual income and it runs fast and smoothly because it’s hosted with Bluehost.
Some companies offer out credit to their customers. This way they may have done a job but are being paid after the job has been completed. Normally businesses are supposed to pay within 30 days but this process can take longer depending on the business.
The next on our list of 8 different types of income is:
Rental Income- Earned through renting out properties.
Rental Income is one of the most versatile incomes you can get with high returns. You can invest your money into single-family homes, duplex/triplex’s, apartments, condos, malls, you name it.
With the rental income, you can benefit from using leverage to increase your returns. Leverage is “other people’s money”. This could be the bank. This could be a business partner or college.
There are a lot of companies on the stock market that are using investors’ money to buy, develop, and make money from income properties.
By being able to use other people’s money such as the bank you can buy a rental property without needing to have the full purchase price like stocks.
You can buy a rental home for $100,000 and only need to put 20% down ($20,000). With the right property and the right management on your part, you can be potentially making 25% returns on a property overall.
If you have rental properties that are returning 25% you will double your invested capital in 4 years!!!
Imagine making $20,000 every 4 years from a property after everything is said and done. You get a few properties and now you can be making big dollars collecting rent and managing properties yourself on the side.
Dividend Income- Earned through owning stocks/companies.
Dividend Income is a fairly common income stream for a lot of people. A dividend is when a company pays a portion of the income the company has made through the year to the shareholder(s).
The most common way that people start to received dividend payments is through investing in the stock market.
You go to work every day and save some money for investments, invest that money into a dividend-paying stock, and receive either monthly, quarterly, or yearly dividend payouts.
The stock market isn’t the only way to receive dividends. If you own or build your own company you can pay yourself dividends from your company.
Circling back to before, if you build your blog or online store with Bluehost you can then incorporate that website into a company down the road and end up paying yourself a dividend as an income.
There are a lot of investors that focus on dividends when they are purchasing stocks. Some companies pay more than others and the amounts are expressed as a percent called a Dividend Yield.
Different companies have different dividend yields based on how much of their profit they want to pay out to their investors. Some pay a dividend yield of 2%, some may pay 13%.
As an example to explain how it works, If you have $100,000 invested in “XYZ” stock which has a dividend yield of 5%, you would receive 5% of your invested capital in dividends a year.
Therefore in this scenario, you would receive $5,000 a year in dividend payments.
With that in mind, you can see how dividend investing can be an AMAZING way to create more income. This can also be a great strategy for retirement years where you have some money to invest and if you are getting dividend payments every year you won’t have to touch your initial investment.
Capital Gains Income- Earned through the sale of Appreciated Assets.
Capital Gains income is income from selling an appreciated asset. That sounds complicated but it’s not.
An Appreciated Asset is simply an Asset or something of value that has increased in value.
This could be anything from a business, a vehicle, a building, or land. There are a lot of Assets that appreciate over time and can create an income for you.
Capital gains income is generated from the sale of that asset. This means that you won’t be receiving continual income from the assets that you get Capital gains income from.
Also, there are different laws in regards to taxes for Capital gains which can vary depending upon where you live.
Some places you can claim capital gains on your taxes and end up only paying taxes on 50% of the total appreciated value.
This can end up saving thousands of dollars if you sold something and had an appreciated income of $1,000,000. You could claim it as Capital Gains and only be taxed on $500,000.
I don’t know about you but not paying tax on $500,000 would be pretty awesome!
It’s not a very quick way of getting cash in your pocket but it can be a very lucrative way to pad your accounts when the time comes.
You can start building a company or purchase some land or buildings that over time can be worth more than what you paid for them and benefit from Capital Gains. Starting today is the key.
Royalty Income- Earned through someone else selling your idea(s).
Of course last but definitely not least, Royalty Income. Earning Royalty Income is an amazing way to have Passive Income coming in. You earn Royalty Income through someone else selling your products.
Some of the most common Royalty Income products are things like; books, games, puzzles, or courses. It doesn’t have to stop there either. You know when you go to the hospital and they place that little clip on your finger to get your heart rate?
Someone invented that, they receive a royalty every time someone has one placed on their finger. Millions and millions of dollars are being made from royalty income every year.
You could write a book and sell the rights to produce it to producers. In turn, when they sell your book you get a royalty. You could make a game to help people or for kids. Make a course to teach people the skills you have developed over the years.
There are so many possibilities to royalty income its amazing more people aren’t working to create it.
You could also go even further and start using affiliates to advertise promote and sell your product. They get a commission and you get income from them doing the work.
Where do you begin?
Creating additional income doesn’t have to be hard, nor does it have to be complicated. If you want to start building some of these 8 different types of income streams to grow your wealth, I recommend signing up with your e-mail and following along with the thousands of others who are creating their income streams.
AFTER signing up with your e-mail you should be looking to get earned income. Find a job that can support you and your family first. Then, start saving and work out a budget.
From there you can start doing some comparison of investments such as these:
All of these investments are solid and can provide you with some very good income over the years. Investing and making knowledgeable choices about where you put your money is important.
If you are looking to spend less and still create income. For less than the price of 2 coffees a month you can start a blog or business with Bluehost right now! Bluehost running with WordPress will provide you with absolutely anything you could possibly need. It is so customizable that the designs are endless!
If you are looking to learn more still you can expand your Financial Literacy through our e-mails and our blog. No matter what, I want you to start today!
