How to build wealth by diversifying your income sources.
Hello lovelies! My name is Victoria and I’m so happy that you are spending some time with me today! If you are new here, you should get to know me better before you leave (we may have some things in common). Be sure to follow me on twitter too. I post tons of personal finance and personal development tips that will be helpful to you!
One thing I learned about rich people blew my mind…
About two years ago, I decided to leave my financial struggles in the past and create a better life for myself. When I started this journey, the first thing I did was start researching wealthy people and how they grew their wealth. I learned so many things that I had absolutely no idea about. Now wealth building makes a lot more sense to me and I uncovered tons of secrets of the mega rich. One of the most important things I learned is that Millionaires have specific strategy for building, growing, and maintaining wealth.
Millionaires have two types of income. One type is active income, which is income that you have to go to work for. Passive income is made without trading time for money.
It is also super important to know that active income is taxed at the highest percent!
Millionaires have multiple sources of income. The world’s wealthiest people do not earn their wealth from one source. They have an average of seven streams of income
Until side hustles came about, most people were getting their money from one job. And lots of people still do. Some people have a side job or even two side jobs.
The problem with this, is that the only way you make money from jobs like these is when you physically show up to work and put in the time. Once you clock out, there is no more money to be made. If you are sick and must stay home from work, you will not be making money. You are trading time for money. And using this as your only source of income is a very dangerous thing. This is not how millionaires build wealth. They may have a job, but it is certainly not their only source of income.
Diversifying your income sources is SO important if you are serious about building wealth. When I first read about this, I can honestly say that I was a little intimidated because I felt like this was something that only someone with a lot of money could do.
But after doing tons of research (and trying it myself) I learned that with a little bit of effort I could create multiple sources of income and YOU CAN TOO.
Are you ready to learn the different income streams of millionaires? Let’s get into it!
Like the rest of us, Millionaires normally have a job or they own their own companies and businesses. They earn a salary and this makes up a good portion of their wealth. Millionaires are sure to find a job that helps them as much as they help the company.
How can I do it?
If you have job, congratulations! You are already in on this income stream. The only way that you can take it to the next level is to ask for a raise or find a job that pays more money.
Millionaires make money from interest payments. They do this from bonds. A bond is when you loan money to a bank and they give you interest in return. The rich also have their money in a high yield savings account. A high yield savings account is a savings account that pays more interest than the average bank account. Most of these high yield accounts are online only through FDIC insured banks.
Example: My regular bank pays me about .06% interest on the money in my savings account. A high yield savings account like Goldman Sachs pays 2.3% this is a HUGE difference and an awesome way to generate a source of income that doesn’t require any work at all. If you have money in a regular savings account, you need to move it over to a high yield savings account asap!
How can I do it?
Wanna know something cool? Anyone can open a high yield savings account! The top banks for these are Goldman Sachs,
You just transfer funds from your regular bank to the online bank and watch it grow!
Capital Gains occurs when an asset increases in value and it is sold. Millionaires like to have many assets like stocks, real estate, This is why it is so important to spend your money on assets instead of liabilities, because assets increase in value and you can get gains from them!
How can I do it?
If you own your own home, you are well on your way to earning capital gains. You can do small projects around your home to help increase the value. If you don’t own a home and aren’t going to purchase one in the foreseeable future, I recommend that you purchase some stocks! Investing in the stock market is an awesome way to earn capital gains.
If you are interested in buying stocks, you should know that some companies will pay their shareholders a portion of its profits on a regular basis. Most businesses distribute payments quarterly. This is called dividends. Wealthy people invest a lot of money into the stock market and earn a return in dividend income. Most times they reinvest that income to grow their wealth even more, but it is an awesome way to add another income source.
When you sell something that costs less than it did to make, this is considered profit income. This is a great way to add an additional source of income that you can do right now! With the internet at it’s peak, people are finding the most creative ways to make profit income online.
How can I do it?
One of the best ways to get in on this is by creating a digital product and selling it. Digital products generally cost very little to nothing to create and can be sold hundreds of times over with little effort on your part.
Wealthy people build their wealth by using real estate, but they have other people pay for their investment properties for them. This is a brilliant income source that I can’t believe I learned about sooner.
Properties are purchased while the market prices are lower than average and then rented out for a profit. This allows the owner to still have the asset in their portfolio, but they aren’t the ones paying for it. Honestly it’s brilliant. Houses aren’t the only rental income source. Commercial real estate, land and even items and machinery are rented out as well.
How can I do it?
If you already own your home but are looking to move, consider renting it out instead of selling it. There are some risks, like having trouble finding a renter or having a bad renter, but every good thing takes risks and it can be an awesome way to pay off that house while simultaneously making money while you sleep.