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How Many Streams of Income Do Millionaires Have?

Millionaires have mastered financial literacy and they know how to make money work for them. To become a millionaire, you must not rely on your salary alone. Otherwise, you are very near to becoming poor in case you lose your job.

You might have wondered; how many incomes does a millionaire have? Most millionaires have at least three streams of income like dividend income from stocks, earned income from paychecks, and rental income from real estate.

How Many Streams of Income to Be a Millionaire?

If statistics are anything to go by, then you need to have at least three streams of income to become a millionaire. It is because it is the average number of income streams for millionaires. Statistics show that:

  • 65% of millionaires have 3 streams of income
  • 45% of millionaires have 4 streams of income
  • 30% of millionaires have five or more streams of income

7 Streams of Income to Become a Millionaire

To become a millionaire, you need to have at least three of the following 7 streams of income. They include:

1. Earned Income

Earned Income is the primary source of income for many millionaires. Even the average person starts here. Earned income can be in the form of a wage or a salary. Earned income is limiting and many people use it just for survival.

Of course, there are jobs that pay well, but you need to look for other streams of income to be a millionaire. If you wholly depend on income, you will never grow your wealth. Earned income is also risky in that you are slightly away from poverty in case you lose your job.

2. Profit Income

Profit income is the other stream of income for millionaires. It is the income earned from businesses. When millionaires sell products at a higher price than they bought them, then they earn profit income. Many people graduate from earned income to profit income. 

However, to start earning profit income, it takes time and effort. Starting a profitable business is risky and requires sacrifice, learning from failure, consistency, and never giving up. Many employees dream to earn a profit income at some point.

3. Interest Income

Interest income is an income earned from saving money in a bank account. Many millionaires use private bank accounts to save money and earn interest. Besides, millionaires also earn interest income by buying government bonds.

You too can save money in a savings account of a fixed savings account and start earning interest. You can also consider saving through savings schemes and benefit from the power of compound interest. This is a good source of passive income.

4. Dividend Income

The other stream of income to become a millionaire is dividend income. This is the income you earn when you invest in stocks and shares. When you invest in stocks, when a company makes a profit, investors earn a dividend. Investing in highly profitable companies is a great source of passive income through dividends.

Also read: Do millionaires pay off debt of invest?

5. Rental Income

Rental income is the income you earn by renting out properties like houses. The good thing about rental income is that your property continues to appreciate while you are still earning rental income. The downside of rental income is that it is capital-intensive. Besides, it does not generate returns immediately; it takes time.

6. Capital Gains Income

The other stream of income you need to have to become a millionaire is capital gains income. It involves buying and selling assets that can provide you with an income. When you buy stocks and shares and sell them at a profit, you earn capital gains income. However, you need to be careful while buying stocks and shares. Otherwise, you can make huge losses if you invest in the wrong companies.

7. Royalty Income

This is a kind of income you earn when you come up with something unique and charge people for using it. For instance, you can come up with an innovative idea and charge people to use it. Musicians earn royalty income when they are signed to a particular label. Royalty income has made many musicians millionaires.

How Many Sources of Income Does the Average Millionaire Have?

The average millionaire has 3 streams of income. A majority of millionaires have these three streams of income; earned income from employment, rental income from real estate and dividend income from stocks and shares. 

Summary of How Many Income Streams Millionaires Have

Statistics show that the average millionaire has at least 3 streams of income. As such, to become a millionaire, you need to have at least three streams of income. Some of the most common streams of income for a majority of millionaires include dividend income from stocks and shares, rental income from real estate, and earned income from paychecks.

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