I bet you've often heard that the average millionaire has an average of
seven streams of income constantly flowing into their pocket but if you
didn't you're welcome however the average person has only one
stream of income which almost don't waste happens to be their job while your
grandparents maybe have been able to survive on only one income source in the
past years it's nearly impossible in the times we're living in now in today's
video we'll be sharing with you the seven types of income the average
millionaires have and give you tips on how you too can have them but right
before we begin if you're not subscribed to our channel you're missing out
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notification icon so you don't miss any of our videos now let's begin number one
earned income earned income is money earn from working or by spending time on
a project this could be earnings from your job salary from working for someone
or contract payments it also happens to be the most common source of income all
in all earned income happens to be the base of all self-made millionaires these
earnings give them the boost they need to pursue other income streams which we
discussed later while sustaining their lives you'll find that most millionaires
are CEOs in multiple companies which doesn't necessarily mean they own the
company but instead are employed to work in that role as for the regular person's
earned income could be from your job or even from freelancing always keep in
mind that job refers to just over broke meaning what you can earn from them is
only enough for your bills and to keep you afloat there's also a maximum on
what you can make from jobs as they depend on individual capacity for
example we only have 24 hours a day if you get a job with a maximum wage rate
of $30 an hour working ten hours a day you can only earn 300 dollars there's no
possible way of getting more than 24 hours a day to work and increase your
income get what I mean this sort of income is limiting in time
and capacity you won't be able to increase your output as one person
because you can only do so much in a day also this income source tends to be the
highest tax with an average tax rate of 40% in the u.s. meaning almost half of
your income will go to the government yikes most people settle with their jobs
and their wages create a comfort zone which
holds them back from their full potential once the comfort zone is
created they settle for their paycheck and anything that surpasses that will be
paid by their credit cards thus creating more problems it's almost impossible to
become a millionaire from just your job paycheck unless you invest wisely and
acquire the other income streams we will share with you in a minute
number two profit income this refers to earnings acquired from selling a good or
service for more money than it costs to make it this can either be at wholesale
retail distribution or manufacturer level for goods today it's so easy to
create this channel of income with the tools available online you could start
off with a small investment or large amounts of capital depending on the
available funds this income stream requires one to adopt the
entrepreneurial mindset at first it may be time consuming before you get the
grasp of it all but with time it's well rewarding whether you choose to do it
online or physically profits as an income stream can really boost your
earnings and make you a millionaire within a short time however this happens
to be risky and making the wrong move can create many losses to avoid this
ensure you do a lot of research on the products or services you want to sell
hire expert consultants to guide you through the product development
marketing and finally ensure funds are managed accordingly
especially within the first year they say most businesses closed down within
the first year of operations one of the main reasons behind this is due to poor
financial management use apps or even hire a proper accountant or financial
manager if the capital is available to ensure this doesn't happen to you for
many people profit income and earned income happens to be the only sources of
earnings that they know they tend to forget that there are other five viable
streams that can earn them some serious money I hope you're taking notes let's
proceed shall we number three interest income now this
isn't a common income stream but again millionaires aren't so common this
earning comes from lending money in exchange of some interest this could be
by saving money in the bank through Treasury bills given to the government
or by lending someone money which we do not really recommend it happens to be
one of the most secure income streams but it comes with a catch because the
return rate is also the lowest the interest rate could be between one and
five percent making it the least attractive however don't dismiss
just yet this income source doesn't need you to be actively involved in the
investment which makes it a great passive income source it also happens to
be the least risky most people doubt this income stream but when you do
consider the power of compounding and the fact that it really doesn't need you
to do anything it can easily beat the first two income streams discussed above
it's also the least involving channel of making money and one of the most secure
number four dividend incomes now it's about to get really interesting this is
one of the best income streams one because it's passive and it also makes
the participant aka you a shareholder of the company so how does it work when you
buy some shares the company assigns them to you and gives you the shareholder tag
a shareholder is a co-owner of a company depending on the company's policies
you'll be paid in dividends either quarterly or yearly dividends can be
defined as the percentage of returns earned from the shares of a company now
here's the best part you can end up paying zero tax on this income how do
you do that well if your ordinary income is less than thirty eight thousand six
hundred dollars a year you qualify for zero taxes on your dividend earnings if
you earn however more than four hundred and twenty five thousand eight hundred
dollars a year your tax rate is about twenty percent which is still much lower
than tax from earned income which also happens to be among the lowest tax rates
as good as it sounds it's really underrated and often ignored by
investing smartly on blue chip companies you could easily earn so much money
considering you'll also earn from the capital gains of the share price this
right here has to be one of the best ways to generate a healthy cash inflow
and becoming a millionaire but let's first go through all the streams so you
can see what best suits you number five rental income this is the income
acquired by renting out an asset owned this could be office space parking space
a home or even a whole building the property rented could be commercial or
residential a few years ago venturing into this sort of investment required
massive investments in capital back then you would need to buy a house or an
apartment for you to lease it out for income however today people are making
millions of dollars by leasing homes then releasing them on platforms like
Airbnb or booking.com all you need is an agreement with the
owner of the home while this can only be duplicated on
residential properties I believe that very soon with increased innovations in
this space it will be possible to earn rental income from other property types
this is one great way to add some zeros to your bank account number six capital
gains this income is also quite popular compared to the rest on this list it is
the income generated as a result of increment of value of the owned assets
for example if you buy shares at $100 each and after a couple of months you
sell the same shares for one hundred and twenty dollars the capital gains is
twenty dollars or you buy a house for let's say forty thousand dollars and
sell it five years later for nine hundred and fifty thousand dollars the
capital gains there would be four hundred and fifty thousand dollars the
most common types of capital gains are stocks and real estate property but
there are several other assets that can earn you this income the best part about
this income stream is that the tax rates are relatively low you could pay as low
as 10 to 20 percent in taxes from income generated this way depending on the
amount earned in some cases this tax could go as low as 0 with this stream of
income you increase your net worth while at the same time paying the least legal
amount in taxes if this isn't a great way to become rich I don't know what is
number 7 royalty income this is the income source that clearly defines what
passive income is all about the earnings are made even after one's work is done
to generate this sort of income you'll have to create a unique product a
concept or a process which will later be used by other people at a fee by letting
other people use your creations they do the hard work and pay back a small
percentage of their earnings to you for example an artist whose music is
streaming on Spotify will earn some royalties at the end of a given period
based on how much his music is played today venture capitalists earning
through this channel a lot if you want Shark Tank and other business pitching
series you'll notice most deals end with a royalty price on each commodity sold
another example applies to franchises for example if you open a Subway
franchise you will pay in some royalties yearly we're using their marketing
strategies processes and logo writers get paid for every book sold by
publishers another great example is JK Rowling's earnings on the Harry Potter
series she gets paid for the use of her book characters in movies or any other
and ice however this sort of income is one of the hardest to make the reason
being you have to create something that's really unique and isn't easily
replicable it requires a set of special skills to create such assets but once
done the earnings are unlimited those are the seven types of income the
average millionaire might have not all of these income streams might be in
their portfolio in fact some people have become very rich millionaires or even
billionaires by mastering one or two of the methods above one of them is Warren
Buffett who became a billionaire through capital gains and dividends he chose to
focus on capital gains on companies within the stock market
one more billionaire who has a few streams of income is Bill Gates he made
his empire through profit earnings and royalty income through his asset windows
there are so many other examples of millionaires who chose a few of the
income streams listed above but one thing's for sure none of them have
become wealthy through earned income we're not telling you to leave your job
but to start thinking out of the box of the seven streams listed select those
that suit your lifestyle those that you are good in then becoming the best you
can be in that niche don't be afraid to try something different today you never
know it could be life-changing for your family and your generations to come well
that's it for today we hope you enjoyed the video in summary the seven types of
income the average millionaire might have are one earned income to profit
income three interest income for dividend income five rental income six
capital gains seven royalty income if you want to see more of these please let
us know in the comments section also subscribe so you don't miss out on any
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upload with that said I'll see you in the next one