Every person on this planet only has 24 hours in a day. No matter how many hours you can actively work, you will always hit a ceiling on how much you can earn, therefore, how much you can save. However, some business such as passive income streams, are one of the productive wealth-building blocks that can provide unlimited income. Businesses that generate passive income is considered to be significant tool to increases earning or even build wealth, because you will generate income even if you are not physically working.
Millionaires are ordinary people with remarkable discipline and focus habits. Wealthy individuals accumulate fortune by not only working harder or smarter than others, but also differently. One fascinating insight into millionaires is that they typically have multiple streams of financial resources. For instance in 2018:
- 65 percent of millionaires have three streams of income
- 45 percent of millionaires have four sources of income
- 30 percent of millionaires have five or more income streams
While most people have one income source, which is their employment, over half of millionaires have three total income streams. Having multiple income streams is a powerful tool to achieve financial freedom. If you’re looking to grow your wealth, below are the top four streams of income, with no specific order, that can increase wealth:
- Entrepreneur income
Most of millionaires have grown their wealth through entrepreneurship. By for example owning a business, whether creating, selling products or providing services, opens up a world of limitless income possibilities. For example, if you’re a developer and create a game. That game might attract a following and passively earn you an income.
You can take that money and reinvest it in the business to make more, or you can leverage your side passive income source to save more money.
2. Real estate syndications
Real estate syndications are one of the best passive sources of income. A syndication is a group of investors that purchase a particular multi-family or commercial property. These investments typically run for about five years and feature annually returns of around 8 percent. On top of those above-average returns, syndications sell the purchased building, which provides investors with more than 30 percent lump-sum return at the end of those five years.
3. Investment income
Another common type of passive income stream that will grow your wealth is to have investment income. Investment income category is more generic, including dividends from equities and bonds. Many millionaires have Certificate of Deposit CD investments, participate in Peer-to-Peer P2P lending and own shares in a stock, which pays regular dividends.
4. Royalties and licensing
Royalty and licensing streams of income are fantastic, because they typically are consistent. Suppose you invent a new product, for example, and a company buys that design. You will profit from every unit sold. In that case, you can expect a reasonably solid income stream.
If you have the opportunity to create a product, idea or process, you can sometimes license it out and collect a fee every time they use it. Royalty can be on anything — you might even start a band and manage to get your songs on one of the streaming platforms. Or you might create a YouTube channel and earn passive income from views.