Income Streams - How Many Do You Do?
Wednesday, 30 June 2021 14:55
Staying on this months topic of money I’ve been doing some thinking about all of the different types of income that there are. Did you know there are seven types of income? I confess I didn’t either!
Earned Income (Salary) from working a job
Profit Income from buying and selling
Interest Income from lending money
Dividend Income from owning stocks
Rental income from renting out property
Capital Gains when assets increase in value
Royalties income from other people using your work
I spoke in my last blog about the ways in which I make money (see below). In the words of the weetabix ad (Australian reference), “how many do you do”? It’s worth thinking about how you do make your money and whether you need to think about branching out into other areas. Having more than one income source can be great insurance for when the unexpected happens. Maybe you only have one income stream but you have more than source for it. You may make all of your money through a salary but work for more than one company. Like me, maybe that’s your primary source of money but you have a side hustle that brings in the gravy.
There are other ways of classifying how you earn your money. Are you a manufacturer or a service provider? Are your income streams passive or semi-passive (like rent). Do you make your money online or IRL (in real life). There are any number of ways to make money and to me that is one of the most exciting things about it. Diversifying how you make money can also provide other benefits besides cash, you may mix with an entirely different group of people, maybe you can monetise something you love as a sideline, plus it can be a great diversion from the stress of your main gig.
There is of course also inherited income but, not all of us can expect that and, even some who do expect it don’t always get it! You may also win the lotto but if you’re trying to build a life on the expectation of a lotto win or an inheritance you’re letting life pass you by. There is no better feeling than making your own living.