The 7 sources of income that will help you make money
If you're like most people, your income is probably coming from a single source: your job. But what if you could diversify your sources of income? What if instead of relying on one paycheck every two weeks, you had multiple revenue streams some direct and some indirect that helped stabilize your finances?
Imagine being able to rely less on unpredictable paychecks and more on predictable cash flow from different sources. That's the goal behind diversifying your income streams: having multiple ways to make money so that one doesn't completely dominate all other streams.
This is the most common type of income and includes your regular salary or wage, which you receive for performing work for someone else. It also includes income from your business (if you have one), blog, side hustle, investments and savings accounts.
For example: If you’re an Uber driver or Lyft driver who works full-time hours driving around people in their cars while they chat on their phones or listen to music… that’s earned income! You can use that same logic if someone pays you in cash to do a job such as painting their house or installing solar panels on their roof.
These types of activities are considered “earned income” because a person has paid money directly into your bank account in exchange for services rendered by yourself personally—not through another company like TaskRabbit which might pay contractors using credit cards instead (which aren't considered "earned" since they don't take place between two real parties).
Profit income is the money you earn from running your business. It's what’s left over after accounting for all expenses such as buying supplies and paying for employees. That means that it’s profit, not revenue!
You can get this type of income in several ways:
- Through sales made directly to customers - For example, if you sell handmade jewelry on Etsy or Amazon Handmade, then every time someone buys one of your pieces of jewelry, that’s an example of profit income.
- By selling products through an affiliate program – This could be a website like ClickBank or JVZoo where other people have purchased products related to yours (like weight loss pills) and are now promoting them using links back to those sites so that they can earn commissions off any sales made by clicking through them first before making purchases themselves elsewhere online too much work involved with managing multiple accounts across multiple platforms--probably better just stick with one channel at most
Interest income is the money you earn from lending money to someone else. This can be through a savings account, certificate of deposit, or other forms of investments. The interest income is usually guaranteed and tax-free.
The best part about interest income is that it's passive—you don't have to do anything to earn it!
Dividend income is one of the best sources of passive income, and it isn't as complicated as you might think. Dividends are paid by companies to their shareholders, and they're a portion of the company's profits or earnings. They're often referred to as "paying out" or "passing along" profits from a company's revenue—which means that when companies pay out dividends, they're essentially sharing their success with investors who have invested in them.
The dividend rate is also known as the payout ratio. It tells you how much money went toward paying out dividends during an accounting period (usually one year). The rate can be calculated by dividing total cash distributions by net income:
Rental income is the money you make from renting out a property. The most common forms of rental income are:
- Residential properties that house people temporarily, like houses or apartments
- Commercial properties used by businesses in their daily operations. This could be commercial office space or an industrial warehouse
Rental income can be generated in two ways:
- You own the property and rent it out to someone else on a long-term basis (like a landlord). In this case, you’ll need to pay taxes on any revenue earned above expenses—but since it all goes towards paying down your debt, it doesn’t really matter if you get taxed on this money or not.
- You rent out your own home through sites like Airbnb while living elsewhere yourself (like an Airbnb host). This form of rental income is called “managed short-term rentals” by the Internal Revenue Service and isn’t taxable because it's considered part of your business expenses rather than actual personal profit.
Capital gains are money you make when you sell an asset for more than you paid for it. For example, if you buy a stock for $10 and sell it for $20, your capital gain is $10. Capital gains tax rates are fairly low, since there's no need to tax these transactions as much as other types of income (like wages). In fact, the federal government taxes long-term capital gains at 0%, 15%, and 20%.
The reason we're talking about capital gains here is because they're one of the 7 sources of income mentioned in this article. They can help supplement your main source of income in several ways:
If the value of your assets goes up over time (the stock market usually does), then those increases in value create additional streams of cash that can be used toward paying off debts or making investments in yourself that will generate even more money down the road
Royalty income is money you receive when someone else makes use of your intangible property. Intangible property refers to rights that exist in the mind, such as patents, trademarks, copyrights, and trade secrets.
One example of royalty income is when someone buys a book based on your idea or story; another would be if you had sold them a patent for $100 million dollars and they make $1 million per year from it.
Another form of royalty income comes from physical things—for instance, if you were an independent contractor who sold furniture made with custom fabrics or woodwork (your name was emblazoned on every piece), then people would pay royalties on each sale made using those materials.
A pen manufacturer could also pay royalties for using their mark or logo; in this case, the company has paid for exclusive use of the design so no one else can use those same markings without consent from the copyright holder
These are the sources of income that you can draw from to make money
Making money is all about the source. In fact, it's not just about the source; it's also about how you use that source to make more money.
There are many different sources of income out there, and we've compiled a list of seven common ones here:
- Real estate/rentals (including Airbnb)
- Passive income streams
- Side hustles or part-time jobs
- Freelance work or consulting
I hope that this article has helped you to understand how to make money from a variety of sources. Many people think that they can only make money from one source, but there are actually many ways to do it! You just need to find out what works best for you and then stick with it.