So, you want to become a millionaire? The best way to achieve such a lofty goal is by understanding the income streams of millionaires. By understanding how they make their money, you too will be able to mimic what they’re doing.
There is no reason why anyone reading this can’t become a millionaire. It may sound like an impossible task depending on where you are in life, but it’s not out of reach. If you’re willing to put in the effort, learn the income streams of millionaires, and stay focused, anything is possible.
Table of Contents
7 streams of income for millionaires
1. Investment income
This is the number one way that millionaires generate their income. They invest in assets that produce a long-term stream of cash in the form of interest or dividends. The most famous example is Warren Buffet, who invests his wealth in stocks and bonds.
This type of investment generates wealth, but you need to invest early and make sound investments to be successful at it. You have to have your thumb on the pulse of the stock market at all times to pull something like this off.
It’s not unheard of for millionaires to hire someone to take care of their investments for them. While it may seem like you should only hire someone to take care of your investments while you’re working, the truth is that this could put more stress on your finances.
The best solution is to learn how to invest for yourself, and even more critical, have an investment plan in place. You shouldn’t be going into the stock market without a plan in place because otherwise, you could be leaving money on the table.
2. Real estate
Real estate is another asset that millionaires are known to invest in. While the stock market is a more liquid investment, real estate may be a better bet if you’re looking to build long-term wealth.
Unlike stocks, real estate doesn’t have any quarterly or annual reports. The value of real estate is based on what someone is willing to pay for it, and your return on investment comes in the form of rental income.
Millionaires don’t just buy an apartment building and sit back, waiting for the cash to roll in. They invest in real estate because they have a long-term plan. You’ve got to think decades in advance if you’re playing the real estate game.
Real estate is something that you can pass on to your children, which is why many millionaires like to invest in it. It’s an excellent way to build wealth without any hard work, but you have to stay focused on the big picture.
The trick to being successful in the world of rental properties is that you must know which locations will bring you the most money. It’s all about return on investment and how much you can expect to make every month from your renters.
3. Business income
Income from businesses is money earned from selling products or services. This is undoubtedly a lucrative option, but it doesn’t happen overnight. Before you can even think about generating income from a business, you need to put in years of work and research.
You should start by working for other businesses so that you can learn from the ground up. Start by doing simple things, and then work your way up. You can do this by finding businesses that are hiring and then asking to be hired.
Most businesses will be willing to hire you and pay you a good chunk of money to help them out. This is one of the best ways to build your experience and pull in some cash while learning the ropes.
You can’t expect yourself to become a business tycoon overnight. You need to build experience, and there’s no better way of doing that is by working for someone else who’s willing to pay you. Not only will you receive an invaluable education, but you’ll also earn some money in the process.
4. Interest income
This is a form of investment that most people can appreciate. Interest income comes from bonds, CDs, and savings accounts. It’s just like making money in stocks or real estate, except it’s more of a steady flow of money that you can grow.
One of the best things about this type of investment is its steady flow of money. You can put your money into a savings account for ten years, and you’ll know exactly what return you’ll receive.
Interest income is something that many people would prefer because you don’t have to worry about the stock market or the economy. You take your money and put it into a bank account, and you’re done with it.
You don’t have to worry about it because the bank will pay you a return that you can count on. A good portion of millionaires chooses this type of investment. It’s steady and reliable, so it’s a good fit for people who don’t like to take risks.
5. Royalties
Millionaires love royalties! It’s no secret that the best way to make money in entertainment is to sign a deal with a big company. You don’t need to be an artist or composer to participate in this type of revenue stream.
You only need to license your likeness to companies. For example, if you’re a well-known chef, a company may pay you to put a picture of you on their label of canned soup. You can earn royalties for years to come on something that you did quite a while ago.
Everyone knows movie actors receive royalties when their movies are on TV or a streaming service. The same thing is true with musicians and other performers. Child actors receive royalties for their work for as long as people are watching it.
Not everyone can receive royalties because of the business they’re in, but it can be a solid form of income. If royalties are one of the revenue streams you’re missing out on, now is the time for you to put pen to paper and begin writing a book that’ll earn you sweet royalty checks for years to come.
6. Capital gains
Capital gains are the profits made when selling investments (see full definition here). They’re usually the biggest gains you can make in an investment, as they’re not tied to anything. For example, if you buy a stock at $50 and sell it at $100, your capital gain is $50.
Capital gains are a strong and steady form of income, but they’re also the easiest to miss. You don’t want to get carried away and sell your stock before it goes up in value because then it’ll lose its capital gain. So, you must know the difference between capital gains and losses.
If you’re going to be investing in a stock or mutual fund, always monitor the market. Doing so will help you keep tabs on price changes and see when it’s time to buy or sell. You want the largest capital gain possible, and that can only happen if you’re in tune with what the market is doing.
7. Advertising income streams
Advertising income comes, well, from advertising. Here we’re talking about selling advertising on YouTube, a website, or social media. It’s all about selling ads, and, surprisingly, millionaires make money this way.
It’s all about traffic here since the more traffic you have, the more money you can make. If you have a YouTube channel with millions of subscribers, you can turn that into a passive income stream that will last years, if not decades.
Advertising revenue is something that only goes up over time. If you continuously work to build up the amount of traffic you have, the sky is the limit to how much you can earn. That’s why advertising is one of the best ways to earn money if you’re a millionaire with a big following.
Income streams: The bottom line
These are the 7 income streams millionaires have in common. Not all millionaires have these exact revenue streams, but all will have at the very least several of them.
If you’re wondering which of the 7 you should pursue, ask yourself where you are in life. If you have nothing, the best option is to earn money through advertising. Take that money and invest it in one of the other 6 streams.
What most people don’t realize is, becoming a millionaire requires quite a bit of work. Once you’ve learned how to earn the first million, it’s all easy street after that. It sounds impossible, but it’s true.
The goal should always be to learn as much as you can during the money-making process. What you want to do more than anything is develop methods that you can clone and scale up.
It’s okay to focus on one or more of these methods more than the others. If you’re the type who loves to invest in real estate, the stock market may be too foreign for you. That’s okay because there is always plenty of rental property opportunities out there to invest your money in.
Few people understand that to become a millionaire, you’ve got to make it your top priority. The only way you do that is by diversifying your income streams while ensuring that you don’t leave any possible profits on the table.
