7 Streams of Income oh 7 Streams of Income

1. Earned Income

Earned income is the money you get in exchange for the time and effort that you put into your job.

Pros: Reliable. Easier to obtain.
Cons: Limited by time. Doesn’t scale. Can be risky as sole income source.

Everyone normally start with this. This is my main income. Most probably have to work until 60 yrs old, another 12 yrs.

2. Capital Gains

Capital gains are profits that you make from selling an asset, such as stocks, real estate, or artwork, at a higher price than you originally paid for it.

Pros: Passive. Better tax treatment.
Cons: Can disappear quickly. Not as reliable. Requires capital.

3. Interest Income

Interest income is another form of passive income that is generated by lending money to others, typically through a savings account, money market account, certificates of deposit, or fixed income securities.

Pros: Passive. Consistent and predictable.
Cons: Requires capital. Small relative to other income sources.

4. Dividend Income

Dividend income is a form of passive income that is earned by owning stocks that pay dividends, which are a portion of the company’s profits that are distributed to shareholders.

Pros: Passive. Relatively stable.
Cons: Requires capital. May not generate as much income (long-term) as stocks generally.

5. Rental Income

Rental income is a form of passive income that is earned by owning and renting out a property, such as a house, apartment, or commercial space.

Pros: Can be somewhat passive. Better tax treatment.
Cons: Requires capital and some expertise. Mental hassle. Dealing with tenants isn’t always easy.

6. Profit/Business Income

Business income is a form of earned income that is generated by owning and operating a business

Pros: Better tax treatment. Scales well (especially if the business is online).
Cons: Requires lots of work, capital, or both. Can take many years before you see results.