The Average Millionaire Has 7 Sources Of Income – Here Are 3 You Can Start Building Today

The Average Millionaire Has 7 Sources Of Income – Here Are 3 You Can Start Building Today

The average millionaire has 7 sources of income – here are 3 you can start creating today

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Many people dream of becoming millionaires, but what does it actually take to achieve this level of wealth? According to an IRS report, the average millionaire has not one, not two, but seven different sources of income. That’s right: seven streams of money are flowing into their bank accounts, building their net worth and securing their financial future.

Why are multiple revenue streams so powerful? It all comes down to diversification and risk management. Just like a smart investor spreads their money across different asset classes to minimize potential losses, a millionaire understands the importance of not relying on just one source of income.

Think about it: if you only have one way to make money, like a traditional 9-5 job, what happens if you get laid off or your company goes bankrupt? Suddenly your entire livelihood is in danger. But if you have several irons in the fire, losing a source of income, while certainly not ideal, is not catastrophic. You have other feeds to rely on while you regroup and rebuild.

The 7 sources of income

So, what are these seven sources of income that millionaires rely on? IRS data shows:

1. Stock dividend income

2. Income earned from a paycheck

3. Real estate rental income

4. Income from royalties, intellectual property, inventions, etc.

5. Capital gains resulting from the sale of assets whose value has appreciated

6. Profits of a business

7. Interest from savings, bond or loan activities

Building these seven elements can take years or even decades. But you have to start somewhere. Fortunately, this list contains a few income streams that are very accessible to the average person and can be great ways to start growing beyond just a salary.

Let’s highlight three of the most accessible options:

Dividend income from stocks

Investing in solid dividend-paying stocks can provide you with a steady stream of quarterly or even monthly income. And thanks to the power of compound interest, those dividends can actually compound over time as you reinvest them.

One of the most popular dividend-focused ETFs is the Schwab US Dividend Stock ETF (NYSE:SCHD). With an expense ratio of just 0.06% and a strong track record of performance and growing payments, SCHD is a great way to build a diversified portfolio of dividend stocks. Over the past 5 years, SCHD has generated an annualized return of approximately 11% and currently yields approximately 3.5%. That means a $10,000 investment would generate $350 in dividends per year – not enough to retire on, but a good start.

Trend: If there was a new Jeff Bezos-backed fund offering a 7-9% target return with monthly dividends, Would you like to invest in it?

Rental income from real estate

Owning investment properties that you rent out to tenants is a proven method of generating additional income. And in the age of Airbnb and VRBO, it’s easier than ever for everyday people to become homeowners.

However, purchasing physical real estate requires significant initial capital. This is where a platform like Arrived comes in. Backed by Inc. founder Jeff Bezos, Arrived lets anyone buy fractional shares of rental properties for as little as $100. You get the benefits of being a landlord – passive income, property appreciation, diversification – without having to worry about finding tenants, collecting rent checks, or fixing broken toilets.

Arrived offers actions on both individual properties and their Single-family residential fund for greater diversification. To date, Arrived has completed over 378 real estate transactions with an average dividend yield of 4.2% and has already paid over $4.5 million in dividends to investors. With over $161 million in assets under management, Arrived makes real estate investing more accessible than ever.

You can click here to view properties currently available on Arrived and start earning monthly rental income.

Interest income

In today’s high rate environment, now is the perfect time to start generating interest income and secure higher returns.

Base Camp Alpine Notes by EquityMultiple is an exclusive product for new investors that offers a target APY of 9.0% over a short term of 3 months with a minimum investment of just $1,000. With zero fees, monthly compounding, and Alpine Note’s strong track record of meeting all payment obligations, Basecamp is a great place to put your extra money to work.

If you are looking for a long-term source of income, funds can be transferred into later notes at maturity. In fact, more than 79% of Alpine Note investors choose to continue investing.

You can learn more about Basecamp Alpine Notes and start earning interest income by clicking here.

Don’t wait to start creating multiple sources of income

Creating multiple streams of income is one of the most important steps you can take on your journey to financial freedom and achieving that coveted millionaire status. Starting with accessible options like dividend stocks through the SCHD ETF, fractional rental properties through Arrivedand higher yielding cash investments like Base Camp Alpine Notesyou can start building a diversified portfolio of income-producing assets – without already being rich.

Remember, the average millionaire has seven sources of income. Why not start creating some today? Your future self will thank you.

© 2024 Benzinga does not provide investment advice. All rights reserved.

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