Diversifying your streams of income is just as important as diversifying your portfolio, especially in difficult times. Building multiple sources of income is a necessary step to avoid living paycheck to paycheck and the pathway to attaining financial freedom. Having an extra source of income is the most efficient way to build wealth over time.
According to research, most millionaires have at least 3 sources of income. Building multiple streams of income is now a necessity and your salary should not be your only source of income. Here are 4 income streams you should work towards:
Profit Income
This is money you earn from selling anything at a profit. This is the entrepreneur’s forte. By identifying a need and catering to it, you can earn a little more than just extra petty cash. At some point, most people want to move from their salary to profit income but do not, due to the risks involved. The key is to start small and monitor the growth of your business consistently. This might take a lot of your time initially, but once you’ve found your balance and learned to manage it properly, the profits will keep seeping in.
Interest income
This is the passive income you earn from your investments or money saved in online savings platforms. Having this source of income is beneficial to you because it does not require active work. When interest income is combined with the power of compound interest, your finances will grow speedily over time. At Overwood, we offer daily compound interest to all our investors. Start your investment journey with www.overwood.ng.
Dividend income
This is money you gain as a result of owning shares in a company. Dividends are payments made to investors by listed corporations for putting their money into the company. Next to interest income, this is probably the most commonly known passive income source. Dividend investments include stocks, mutual funds, exchange-traded funds (ETFs), etc. While it can be risky, the payouts can contribute immensely to building your wealth over time.
Rental income
This is the income generated from renting a property. Rental income is a must-have because there is and probably always will be a strong need for real estate rentals. If you are interested in fixing up property or managing spaces, owning real estate rentals might be the thing for you. It’s one of the most reliable sources of income, but one of the drawbacks is the amount of money required to build/acquire an asset that can generate regular rental income.
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