Different Sources Of Income

You might have heard or read somewhere that an average Millionaire has at least 7 sources of income. Yes, this is true, but  do you know what can be various sources which can provide you revenue  Well here are some sources which can help you out :

1. Royalty Checks

  Royalty checks are payments to the creator or owner of a product based on the number of a product's sales. They are often associated with creative professions, but royalty checks can come from a wide variety of industries. Suppose in the future you create a product or service which is very unique, then you have to patent it so that later if a company or a person wants to use your intellectual property which you particularly own then you are eligible to get Royalty Checks from the company. Even various authors get their royalty checks from their Distributors. Even can musicians get royalty checks if they are label has agreed to pay them. 

2. Capital Gains

Capital Gains is when you buy an asset such as property or stocks and then you sell them later for a profit, now the profit which you have gained by selling these assets is known as Capital Gains. To be more clear about this topic let me take an example: if you purchase a house for $100,000, after 2 years of owning that house you decide to sell it but in those 2 years the rate of the house would have appreciated and now the house would be worth $120,000. So now when you sell this house you gain $20,000 profit this is nothing but capital gains. But here comes the twist whenever you have capital gains the government is going to tax you for about 15-20% on long-term gains and almost 37% on short-term gains. So if you were to be taxed so much it sure would be disappointing. But there are ways you can get saved from these taxes, which I will discuss in another Blog.

3. Dividend Income

   So if you are a bit familiar with the stock market then you surely must know about Stocks which pay you regularly divided. This means if a company makes a profit then you will be paid a small amount of it depending on how much percentage you own of the company. For example, Apple paid their shareholders around $0.73, but hey something is better than nothing. Even here you can be taxed but it depends on which bracket you fall under usually people will be taxed within the bracket of  12-24%.

4. Ordinary Income

 It is obvious that means it can be the amount you earn known as salary or wages etc. when you leverage your time in exchange for money that is paid to you hourly or at the end of the month. Here you have to work in order to earn, therefore this is also the section where people pay most of the tax. If you earn more than 10 lakhs in India you would have to pay almost Rs1,25,500 + 30% of the income earned.

5. Rental Income

Rental income is one of the easiest things you can do in the real estate market. If you have a spare room left out in your house then you can easily rent it out and earn monthly some cash flow from it, also at times it can be a headache cause sometimes the house won't be rented out for months and even sometimes the tenants fail to pay the rent, etc, but hey everything has its own pros and cons.

6. YOUR SIDE HUSTLE

I say this a lot but yeah a good side hustle makes up a pretty good income provided you put in all of your efforts. For example, if you spend enough time to set up your Shopify store then are provided with good marketing you can make a pretty much good income. You can also take part in affiliate marketing which is a one-time job once done with perfection can act as a source of passive income.

7. Business Income 

Well, it is what the name says. The amount you earn from the business you set up can provide you the maximum return out of all the above-mentioned sources, it will take time to set up before getting back the profits. You can literally get up to 1000% return on your investments in your business if it runs successfully, but the returns you get will far more be than 10-20% if compared to other investments.   

So these were some of the different sources of income you can establish in your life, but also remember that you should not put all your eggs in one basket, plus focus on building one source of income at a time rather than focusing on building two of them at the same time because if you do so, you may even not be able to set up one source properly. So focus on one then jump onto another.

"Remember you’re the one who can change your DREAMS into REALITY"