How to make money from the 7 streams of income

how to make money from the 7 streams of income

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Podcast by Eddie Eastman
CEO Startup Streams

“We are here to kickstart your ecommerce ambitions by providing you with a range of ecommerce stores in the most popular niches whilst providing you with a fully functioning business complete with products to sell saving you time, money and effort in the process."

Podcast by Eddie Eastman
CEO Startup Streams

“We are here to kickstart your ecommerce ambitions by providing you with a range of ecommerce stores in the most popular niches whilst providing you with a fully functioning business complete with products to sell saving you time, money and effort in the process."

You can use any of the 7 streams of income to make money. Which is your favourite?

Supposedly, the average millionaire has 7 streams of income. This doesn’t necessarily mean that they own 7 different businesses, but that they have 7 different sources of income, making them richer every single day. But what are they and how can you benefit from them too? Well listen to this episode of the Startup Streams Serial Entrepreneur Podcast to find out…

 Let’s begin…

 

Make money from earned income

Let’s start with the most obvious type of income: “Earned income”. This is probably how you first started to make money - by earning it directly by having a job. Whether paid by the hour working in Starbucks, or paid by the year in the form of a salary at a law firm in London, both of the above come under earned income. You provide services, have a boss and are compensated for your time and skill directly.

 

Make money from profit income

The second form of income is known as “Profit income” and comes from buying goods at one price, selling goods for a higher price and keeping the profit. This is how most business owners who sell physical goods make their money. I personally had my first experience of this selling on eBay and starting my own skateboarding sticker business when I was 12 years old. The risk associated with this type of income stream is that you will need to hold stock. Stock means your finances are tied up in physical form and can only become liquid again when the products are sold. Although there may not be a direct correlation between how many hours you work to sell physical goods to how much money you can earn, as is the case with earned income, you may find this is one of the riskier types of income because of the hefty upfront payment for stock - which you may or not be able to sell.

 

Make money from interest income

Speaking of risk, you can lend out money and earn interest from lending. If you haven’t guessed already, the third type of income is “Interest income”. The barriers to being able to get started here are tricky as you need a substantial amount of money in the first place, to be able to loan. If you are lending out your own money, you will need to conduct risk assessments on your borrowers.

One way the rich make more money is by investing in new and exciting businesses, through a venture capital fund. Although slightly different from interest income, the general rule is that a VC fund needs to make ten investments to find the one which will tenfold their money - or increase is by 100x as most VC funds are trying to do. This means if you wish to lend to businesses, you generally have a 10% chance of finding that one golden business which will turn into a unicorn in 5 to 10 years time - no matter how much research you put into due diligence before investing. There are a lot of unknowns.

 

Make money from dividend income

No.4 on our list of the 7 streams of income, is “Dividend income”. As the name suggests, this is making money from stock dividends. A dividend is a payment that a company pays you as a reward for owning shares in their business. Although buying shares on the stock exchange may seem like a great idea, as spurred on by chief investors such as Warren Buffet - one of the richest billionaires in the world, this also has its risks. You’ll want the stock price to go up, but it can of course go down. What’s more, any income from dividend income is taxable, so bear this in mind.

Carrying on…

 

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Make money from rental income

This may be another obvious one? “Rental income”. You can be a house or building owner and rent out the premises or home for monthly or yearly income. Supposedly, the average millionaire’s wealth profile consists of 40% of their assets in real estate in the US. Real estate is attributed to making the most millionaires in the world compared to any other the of income on our list today. That said, it is increasing becoming harder to get on the property ladder, so if you can increase your finances using other methods on our list, make sure you invest in property as soon as you can, to make use of rental income.

 

Make money from Capital gains

The penultimate item on our list is “Capital gains”. This comes from selling an item which has increased in value. The most obvious example I can give is when you sell a house, which was bought, say, 10 or 20 years ago. House prices generally increase over time, and when the house is sold for a price above the amount paid, the profit is known as capital gains. Besides selling your house, you can make capital gains by also selling luxury items, like watches and cars, by selling a business and of course from selling shares.

 

Make money from royalties

The final stream of income you can make money from, is from royalties. A royalty, or “royal payment” is a payment made from one party to another who owns a particular asset for the ongoing right to use that asset. You may have heard of music royalties, whereby a film producer pays a musician for the licence to use their music in their film.

Here at Startup Streams we sell pre-made businesses for sale, all with digital products - usually ebooks - for you to sell. Although selling ebooks from other sources may require you to pay ongoing royalties, I am proud to notify you that we don’t charge any royalties when selling the products included with our businesses for you to sell.

 

Key takeaways

To recap, the 7 streams of income you can use to make money are: Earned income, profit income,  interest income, dividend income, rental income, capital gains and from royalties.

 

The Startup Streams Serial Entrepreneurship Podcast

I hope that you enjoyed listening to this episode of the Startup Streams Serial Entrepreneur Podcast? Make sure that you like and subscribe to our podcast and you can check out more episodes at StartupStreams.com right now…

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