10 Types of Income Streams! Ultimate Guide

There are many different types of income streams available to individuals and businesses. Each type has its own advantages and disadvantages, and it is important to understand the types of income streams before choosing one.

 

 

10 Types Of Income Streams

The following is a list of 10 types of income streams, along with a brief description of each:

 

 

1. Earned Income:

 

This is the most common type of income stream, and it is earned by working for an employer.

 

Some Examples of Earned Income:

 

  • Salary/Wages; Income comes from working a job.
  • Tips: This type of income is often earned by service industry workers, such as waiters and bartenders.
  • Selling good Online
  • Providing Creative/ Professional Service
  • Freelance Work
  • Commissions: This type of income is earned by salespeople and other professionals who receive a percentage of the value of their sales.

 

 

 

 

2. Business Income

 

When businesses make a profit, this is known as business income. The term “business income” refers to the money that a business earns from its activities. This is the money that a business has left over after all of its expenses have been paid

 

This can include revenue from sales, interest on investments, or any other money that the business brings in.

 

Types of Business Income: There are two types of business income

 

  • Operational income: Operational income is the money that a business makes from its day-to-day operations. This includes revenue from the sale of goods or services, as well as any other income, such as interest or rental income.

 

  • Financial income: Financial income is the money that a business makes from investments, such as shares, bonds, or property.

 

 

How to calculate business income?

 

There are a number of different ways to calculate business income. The most common method is to subtract the business’s expenses from its revenue. However, there are other methods that may be more appropriate in certain situations.

 

Business income is important because it is the money that a business has to reinvest in itself, pay its bills, and pay its taxes. Without business income, businesses would not be able to survive.

 

 

 

 

 

3. Interest Income:

 

Income from Lending Money. This type of income is earned by lending money to individuals or organizations. Earnings generated by investments, such as savings accounts and certificates of deposit are also referred to as interest income.

 

 

 

 

 

4. Royalty Income:

 

Royalty income is income derived from allowing someone to use your property. Income from others using your Idea. Revenue royalty income is earned by authors, musicians, and other artists who receive a percentage of the sales of their work.

 

Some Royalty Income Examples:

 

  • Franchisee
  • Books Writing
  • Music
  • Software Licencing
  • Patent

 

 

 

 

 

5. Dividend Income:

 

This type of income is earned by shareholders of the companies that pay out a portion of their profits to shareholders. This Income only comes from Owning Stocks.

 

 

 

 

6. Rental Income:

 

Income from Renting a Property is known as Rental Income. You can earn a handsome amount of income from rental properties. Rental property income can give you a consistent income that always grows on time.

 

You can receive Renting Income through :

  •  Real Estates
    • Commercial
    • Residential
  • Car Renting
  • Camera and other Photography equipment
  • Drone

 

 

 

 

 

7. Capital Gains:

 

This type of income is earned from any profit derived from the sale of a capital asset. There is a need to pay a tax on the Capital Gains income. The tax that is paid is called capital gains tax and it can either be long-term or short-term.

 

Types of Capital Gains:

  • Short-Term Capital Gain.
  • Long-Term Capital Gain.

 

 

 

 

 

8. Residual Income: 

 

Residual income is money that continues to flow in after an initial investment of time and resources. When you keep getting paid consistently, it is called residual income. This type of income is earned by investors, artists, inventors, etc.

 

 

 

 

9. Yield Income:

 

Yield income is the return on an investment, such as the interest received from holding the security or Income from Staking Crypto. The yield is usually expressed as an annual percentage rate based on the investment’s cost, current market value, or face value.

 

 

 

10. Passive Income:

 

Income from Something you are no longer actively working on is known as Passive Income. Passive income refers to money that you earn with little or no active effort. It comes from sources other than your full-time job, side hustle, or self-employment venture. Passive income does not require active work.

 

This types of income are earned by investors, Businessman, Property Owners, and Landlords.

 

To get this income, you do not have to work hard in the present. This is the return on your past hard work, investment, etc. which keeps increasing with time.

 

Passive Income is a great way to earn money without being actively involved. This means that you are earning while you are sleeping, on vacation, or spending time with your kids.

 

Passive income can give you more flexibility and freedom and strengthen your financial stability.

 

In simple words, passive income is that income for which you do not have to do any kind of work today.
This is the return on your past investments. The money that comes to your bank without working is passive income. Only 5 percent of the people in the world do passive income.

 

 Passive income ideas:

  • Blogging  
  • Stock market 
  • Mutual Funds
  • Property Flipping/Renting
  • Buy a profitable app
  • Write a Book
  • Create An Online Course
  • Invest in Premium Domains and Flip it. 

 

Related Article: – Top 14 Best passive income ideas

 

 

The key is to find the right mix of income streams that work for you and your lifestyle.

 

Here in this article, you have learned 10 types of income streams that you can explore.

 

Which of these income streams do you currently have? And which ones would you like to explore?

 

I hope you like this article titled “10 Types Of Income Streams

 

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