Did you know that the average millionaire has OVER 7 streams of income!? Now that’s some amazing CASH FLOW!!! While most of the income types they have are PASSIVE, they also have some ACTIVE income under their belt as well! “But wait! What do these mean?” Before I reveal the 7 types of income millionaires have, I want you to first understand the main differences between active and passive income, as it is a very important topic of debate in the financial world!
What is ACTIVE INCOME?
Simply put, you trade your time for money. It’s the most common type of income around the world and perhaps the EASIEST to get!
While most affluent people frown on this concept of trading your time for money, it doesn’t necessarily mean it’s a bad thing! There are a lot of people who LOVE what they do! Whether it’s caring for the sick like a Doctor, or perhaps defending the innocent like a Lawyer. Believe it or not, there are a lot of people who pour in passion into what they do, NOT because they have to, but because they WANT to!
I know a lot of people out there just concentrate on building passive income and some even believe that trading time for money is the wrong way of doing this. But Active Income sure has its place! And on this remark, I can appreciate active income for those trading time for their own calling and purpose in life! Why? Because at the end of it all, it’s something meaningful & fulfilling!
I mean take a look at Elon Musk for example. A billionaire like him could easily be laying on the beach, sippin’ some Piña Colada’s, and staring at ocean waves all day as the sun hits his face… but NO! Instead, he seeks to contribute something further to humanity and simply wants to leave a mark on this planet before he dies!
As you may already know, he is actively seeking the advancement of technology with the goal of reducing space transportation costs, to enable the colonization of Mars! I just love how this man thinks outside the box! Much like the late-great Steve Jobs — it’s people like them who truly do CHANGE THE WORLD! And you don’t get to do so with the goal of just having passive income and laying on the beach! …and believe me, that gets boring quick! (I’ve actually tried laying on a beach all day and found it super boring — and I’m not even a millionaire! 😂)
What is PASSIVE INCOME?
Simply put, it is income that requires little to no effort to earn and maintain. This is where the phrase “earn money in your sleep” came from!
Needless to say, I’m sure millionaires and billionaires alike both heavily rely on passive income to further their wealth — hence, enabling them to do what they want to do, whenever they want to! That extra CASH FLOW simply allows them to take risks — the same risks one wouldn’t do if he/she doesn’t have that safety net of having multiple streams of income.
But with all that said, there’s still much debate on this very topic and you could really argue to be on one side of the fence over the other. I stumbled on a GREAT video by Dan Lok, a multi-millionaire who shares his thoughts on the very subject, debunking such “myths” about Passive income. It isn’t what it seems! Have a listen:
Now that we have that cleared up, without further ado…
Here are the 7 Types of Income Millionaires have:
- Earned Income (a.k.a. “active income”)
- Business Income
- Interest Income
- Dividend Income
- Rental Income
- Royalty and Licensing Income
- Capital Gains Income
Rather than explaining things in length, to take some of the boring out, I would love to share a cool video by The Better Men Project, explaining a few details on each of the 7 streams of income above:
The Big Key Takeaway!
While most people may not have 7 streams of income, the main point of this all is to have MORE THAN ONE income stream! Start with one then slowly work on getting the next one! It is important to have that mindset because as an example, in tough times like we have today with the pandemic, people who got laid off and/or lost their jobs DO NOT need to worry much about their finances because they have more than one income stream!
And on that note, you know what they say….
So in the spirit of that, I’d like to share with you our different income streams! Do note that we are still YEARS away from getting to the million dollar net worth goal (as a couple), but my wife and I have a COMBINED 7 streams of income thus far!
While a few of them listed below aren’t as profitable as others, it doesn’t matter! At the end of the year, big or small, every dollar counts!
- My Salary
- My wedding photography business (side hustle)
- Wife’s Salary
- Rental Income (from our 2 properties)
- Dividend Income
- Travel Blog Online Store (We sell prints on ETSY!)
- Credit Card Travel Points (Yes, it’s a CREATIVE form of passive income! More on this later on!)
Yeah, yeah, yeah… I guess I’m cheating a little by combining my wife’s income as an income stream, but you know what they say — once you’re married, pretty much everything goes into ONE BASKET! It’s so true! After all, we are ONE TEAM! So you really can’t blame me for seeing it that way! 😂
On my next topic, we are going to talk more about income! This time, we’re diving a little deeper into one of my favorite types of income — DIVIDEND INCOME!
