Streams of Income

The Seven Streams of Income:

To create wealth, a person must have multiple streams of income.

1. Interest – From a variety of loans, either to individuals (peer to peer lending or private notes) or companies (bonds, notes)

2. Dividends – From investments or partnerships

3. Capital gains – The sale of investments

4. Royalties – From products you sell or license

5. Rental income – Real Estate

6. Earned Income - Working a Job

7. Profit Income (Business Income) – May or may not be passive. Generating income through website or brick and mortar in the sale of information, products, or services.

The Three Types of Income

Active Income is when you are paid for the work that you do. You are paid for the hours you work, either hourly or as a salary.

Passive Income is when you are paid on investments made, not directly tied to active work. The money saved from your active income leads to your investment in other streams of income, therefore generating passive income.

Portfolio Income is when you are paid from the sale of capital gains such as stocks and bonds. This involves risk and may generate passive income if the right investments are made in regards to dividend growth.

If you have no resources of passive income, you may begin by focusing on active sources of income until enough has been saved to begin building passive income resources.

• Save more – The focus is to live a life that is “frugal” by cutting unnecessary expenses to the bare minimum until a person has the ability to earn more.

• Earn more – The focus is earning more money through other means, a business, MLM, etc.