six income streams you should consider
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In this post, I want to talk about the importance of changing your mindset regarding money. I recently saw this post on Instagram, and it said if there are 30 days in a month, why are you okay with only getting paid two days in those 30 days? So my interpretation of this post is, why are you relying 100% on your nine to five for income?
Earned Income
So many of us were raised with this old school mentality when it comes to making money. When we graduate from high school, there are a handful of options for us to consider. We can go into the military, go to college, and get a degree. We can go to a vocational school and get a trade or specialized skillset or go right into the workforce. Now, whichever option you go with, the ultimate goal is to get a career where you can make enough money to support you and your family. You’re supposed to save for retirement throughout your career and then hopefully one day in the future, you have enough money to retire.
Profit Income
The second form of income you can consider is called profit income. This is where you purchase items either at wholesale or at a discounted price and then flip it and sell it in the open market at a higher dollar value. One popular method of this is called retail arbitrage, and this is where people will go into the big box retailers and purchase items on clearance, and then they will sell it at a higher dollar value in the open market. This takes a lot of time and effort and resources to figure out which items are profitable, but this can be a lucrative way to make money if you are willing to put in the work.
Interest Income
The third income stream you can consider is called interest income. This income stream is relatively passive. All you have to do is deposit money into an interest-bearing account, such as a high yield savings accounts, money market account, or a deposit certificate. Once you deposit your money into this account, you will earn interest every single month. The great thing with interest income is that your claims were earned interest. For example, if you put $100 into your account and just high-level math, let’s say you made $5 by the end of the month, so then going into the second month, you’re going to earn interest on not $100, but $105.
So as you can see, you can start to get the interest to compound, and it is a great way to bring additional money into your home. You’re not going to get rich off of this by any means, but it is a way to grow your money. I would recommend making sure you are getting the best interest rate on the market, so you should always shop around even after your money is in these accounts.
Residual Income
The fourth income stream you can consider is called residual income. This is where you do the creative work up front, and then you can virtually sell your product and service for perpetuity. Examples of this would be eBooks, webinars, and masterclasses. The only caveat to this is you will have to focus on marketing the product or service because it’s not going to sell itself, but it can be a great way to bring in additional income into your home. Another example of this would have a YouTube channel. Once you get to the point where you qualify to monetize your channel, every time you post a video, it can essentially make money for you for years to come. I know a few content creators who no longer make new videos, but they are still getting paid every month from YouTube, from Google AdSense and affiliate links.
Dividend Income
The next income stream you can consider is called dividend income. This is where you purchase a stock that pays you dividends. Currently, dividends are essentially a distribution of a company’s earnings. Not every stock pays dividends, so you will have to do your research to figure out which ones do versus which ones don’t. When it comes to receiving your dividend payments, every company is different. You can get them quarterly, twice a year, or just once a year. You’re not going to get rich off of your dividend income. Still, if you are trying to grow your stock portfolio, meaning you’re continuously buying more stocks, you can eventually increase your dividend income. Still, nothing is 100% guaranteed when it comes to investing in the stock market.
Capital Gains
Another income stream you can consider is called capital gains, and this is the sale of a property or investment. So examples of this would be investing in the stock market. Right now, stock prices are low. So let’s say you were to buy a stock at a low price right now and fast forward to maybe two, three years down the road and that stock price increases. You could virtually sell that stock price and make a profit, which is AKA a capital gain.
Another example of this would be if you wanted to get into real estate and flip a property, meaning you want to buy the house at a low price, you would then invest money to improve the property and essentially increase the market value. You would then be able to sell the house at a higher dollar value. Once you sell the property, you will make a profit because the price you sold it for is a lot more than what you paid for it.
Each of these income streams that I shared all come with pros, they all come with the cons, and they all have risks. So you want to think about what kind of trouble you are comfortable with before trying any of these options. To take it one step further, they do have tax implications as well. I would recommend talking to your accountant or whoever files your taxes before jumping into any of these options. As you start to explore these different income streams, I don’t want you to get discouraged if you’re not making thousands of dollars of extra money a month. What I do want you to focus on is starting small. If you could start bringing in an additional $50 of net profit a month, that’s $600 for the year.
Once you get that on a steady basis, you could focus on scaling that number and trying for $100 a month and so on. But the whole point of this post is to get you to change your mindset about money. We cannot rely 100% on our nine to five, so we need to start thinking about bringing in extra money into our home so we can have multiple streams of income to rely on.