“Do you know how many streams of income most people have?”

“Does an average millionaire really have 7 streams of income?”

“Do you know what are the multiple streams of income?”

Probably, these are some of the questions you are thinking when you click on this article.

Here we are going to answer all your questions:

  • First, most people only have 1 stream of income, and that is in the form of your job, aka. earned income.
  • Secondly, you don’t need 7 streams of income to become a millionaire, you just need to focus on 3 streams of income to be successful.
  • Finally, in this article, we are going to find out the 7 types of income streams that can make you a millionaire.

And yes, you can become a millionaire too!

No, we are not talking about overnight success, or striking the lottery

We are talking about equipping you with the know-how to become a millionaire.


Let’s dive in!

How many streams of income to become a millionaire?

Contradictory to popular believe that an average millionaire must have 7 streams of income. You’ll just need to focus on 3 streams of income to become a self-made millionaire. Each millionaire differs from each other on the 3 income streams they selected.

But there is a catch.

The key is to become a millionaire is to be passionate at what you do.

If you are not passionate at what you do. Even with 7 or more streams of income will not make you a millionaire.

Passion is the key. By being passionate in what you do, you will do well in it and create success in that field.

“But it is true that with the increase in the number of income streams, will greatly increase your probability of becoming a millionaire?”

According to a 5 years study on self-made millionaires. Research have found an interesting correlation on self-made millionaire and the number of income streams.

Correlation of self-made millionaire and number of income streams:

  • 65% of self-made millionaires had at least 3 streams of income.
  • 45% of self-made millionaires had at least 4 streams of income.
  • 29% of self-made millionaires had at least 5 streams of income.

Having a multiple streams of income is the same idea as diversifying your portfolio during an investment.

Most people who have only 1 or 2 streams of income will suffer when something happens to their income stream. Events such as retrenchment from their job, or facing a major market crash from the stock market will be devastating.

With the same idea of not wanting to put all your eggs in one basket, you don’t want to have only 1 or 2 streams of income.

Aim to have at least 3 or more streams of income will greatly enhance your success in becoming the next millionaire and secure your financial future.

With this, we shall dive into the 7 different streams of income you can consider in your financial journey.

7 Types of Income Streams for Self-Made Millionaires

There are a lot of ways to earn an income, but most of them falls into these 7 types of income streams.

Some income streams are active income, while others are passive income, or somewhere in-between.

Select 3 or more types of income that you find passionate in and work towards you goal.

Here are the 7 types of Income Streams of Young Self-Made Millionaires:

  1. Earned Income
  2. Profit Income
  3. Interest Income
  4. Dividend Income
  5. Capital Gain
  6. Rental Income
  7. Royalties Income

We shall rate each type of income streams in terms of their ‘income type’ and ‘popularity’ amount millionaires:

  • Income Type: Passive Income or Active Income
  • Popularity: Low or High

1. Earned Income

Type: Active Income

Popularity: Low

Earned income is the fancy word for the more commonly known, salary income. These are the income you get from a job and you will need to exchange your time for money.

Not a lot of millionaires are made from earning from this type of income streams. Unless you are a CEO, or a director of the company, becoming a millionaire by earned income can be quite difficult.

Some people even jokingly said,

“JOB means Just Over Broke.”

In other words, having just a job is just one step from being broke. Not that I will like to agree with such a statement, but most people who only have an earned income will become broke once they loss their job.

Having just a JOB is like putting all your eggs in just one basket.

Unfortunately, most people stick to this one stream of income, because this is the easiest to obtain and having a job keep them in their comfort zone.

People like getting a job because their next payday are somewhat predictable. Having just earn income is also the main reason why many never become a millionaire.

Earned income is a great way to start your 1st stream of income, but if you want to become a millionaire, you should adopt a few more streams of income to increase your chances of success in becoming a millionaire.

If you are really passionate about your job and wish to excel in your career. You can check out some of the best career tips by hqhire.com to help you in succeeding in your career.

2. Profit Income

Type: Active/ Passive Income

Popularity: High

Profit income is also known as, income you get from a business. Profit income is where you earn a profit by buying some goods at a low price, and sell them at a higher price. The difference in price is where you make the profit.

Some millionaires are made from earning a profit income. And most recently, with the help of the internet, businesses can be set-up with relatively low risk and capital.

People setup their online eCommerce stores selling different items to billions of customers world wide.

These online stores are open 24/7 everyday, all day.

With as low as $100 you can too setup your own business and earn your first profit income.

The $100 Startup by Chris Guillebeau is a great book to start learning how others have achieve this.

3. Interest Income

Type: Passive Income

Popularity: High

Interest income is where you lend your money to others or organisations for a certain amount of interest paid to you over a period of time.

Some examples of such interest income is by buying bonds, or Treasury bills from the government.

Buying Bonds, or Treasury bills means that you are willing to borrow the organisation, or government your money for a said period of time for a certain interest rate.

This interest rate usually lies in the range of 0.1% to 50% depending on the risk of default and the time frame your are willing to lend your money to the borrower (organisations or government).

Interest income for U.S. Treasury Bill or Government Bond for the last 5 years range from 1.37% to 3.24%. This low interest rate is because of the low risk of the U.S. government defaulting the money that you are lending them.

Interest income for Bonds for organisations can range widely from 0.1% to 50%. This huge range is highly depending on the defaulting risk of the borrower.

Higher defaulting risk usually result in a higher interest rate, and a lower defaulting risk usually result in a lower interest rate.

Here are some of the best performing bonds for the past 10 years according to the most recent data just for your reference:

  • High-Yield Bonds 7.98%
  • Emerging Markets Bonds 7.78%
  • Long-Term U.S. Corporate Bonds 6.97%
  • Long-Term U.S. Government Bonds 6.78%
  • Barclays U.S. Aggregate Bond Index 4.62%

The average interest rate for bonds for the past 10 years is at 4.62% to 6.78% which is not too bad for a low risk interest income.

4. Dividend Income

Type: Passive Income

Popularity: High

Dividend income is the income you get from the distribution of company’s earning to its shareholders. Some companies pay their dividend on a half-yearly basis, while most pay their dividend on a quarterly basis.

In fact, dividend income is my favorite type of income. It is passive, and the return on my investment can be really good. Some people even basically live off with just their dividend income (I am still working towards this goal).

Not only a good dividend income can help you to retire without worries, it helps young investors to build their wealth.

Many multi-millionaires are made through dividend income with the help of the power of compounding. With time at your side, compounding can work miracles.

Albert Einstein was famously quoted:

“Compound interest is the 8th wonder of the world.”

Dividend income is so important that I even write a whole series of article about Dividend investing, or some may call it ‘income investing’..

In this series, we will show you some of the pros and cons of dividend investing. If you are interested, we give you a detailed guide on how to find a good dividend stocks.

Why I love dividend income so much?

Warren Buffett created a high dividend yield portfolio through sound investing in great companies for the past few decades. He was reported to have received $3.8 Billion dollars in dividend in the year 2018 and the numbers is still growing every single year.

When investing is done right, the power of compounding will help you create miracles.

So, does dividend income create Millionaires?

No, dividend income create Billionaires.

5. Rental Income

Type: Passive Income

Popularity: High

Rental income is the income you get from renting out an asset which you own. This asset is usually a house, a room, or even a car.

“oh, so my car is my asset?”

The answer is ‘Yes’ and ‘No’.

You car can be an asset, or an liability. The difference is pretty simple. As explained by Robert Kiyosaki’s Bestseller ‘Rich Dad Poor Dad‘.

Asset are things that help you bring in money.

Liabilities are things that take money out from your pocket.

So, if you buy your car and for daily use such as communing around the town. It is basically an liability, as you have to pay it’s car loan, maintenance etc.

But, if you rent out your car, or use it as a tool to help you earn an income. It is now an asset which helps you to bring in money into your pocket.

Increase your rental income by building your asset.

There are many millionaires earn their millions by buying rental properties. They buy properties at good location that gives a high return on investment. And by renting each property out, they will have multiple streams of rental income which they can use to future invest in more rental properties.

Rental income with properties is not only a great passive income, but also gives high return on investment due to leveraging.

But there is one big drawback on the rental income.

Rental income usually requires you to have a certain amount of money to buy your first asset. It is not that easy to start having a rental income until you have accumulated a certain level of wealth.

But there are other alternatives which you can easily get your first rental income.

The other alternative is to rent out your room, which can be done quite easily.

Buying Real Estate Investment Trusts (REITS) can be a great alternative as well. With just a few hundred dollars, you can invest in a portfolio of professionally managed properties.

If you want to learn more about REITs, you can check out my REITs investing series as well.

REITs have many benefits over buying the whole property which you might be interested. Each types of REITs have their own characteristics.

My favorite is Healthcare REITs, what’s yours?

6. Capital Gain Income

Type: Semi-Passive Income

Popularity: High

Capital Gain Income is the money you get from the appreciation (increase in value) of an investment. Example of capital gain can be from the increase in the value of the stocks you own, or the property you own.

Great stocks or properties that is located in good area usually increase in value over time. These assets can sometimes double or even increase ten times the original value over time. 

Take stocks for an example:

  • You buy 100 shares of a great company at the price of $10, 10 years ago. You paid $1000 for 100 shares.
  • Today, after 10 years of holding the stocks. Each shares of the company raise to $20 per share and you decided to sell the 100 shares you own.
  • You sell 100 shares at the price of $20, you received $2000 for selling 100 shares.
  • $2000 (You Received Today) – $1000 (You Paid 10 Years Ago) = $1000 (Capital Gain)

The difference between the price you pay, and price you sell is the capital gain. 

Many millionaires earn their money through sounds investing and getting a good capital gain from each of their investment.

But the downside of this investment is that, it is non-recurring. Once you have sold the asset, you need to find a good valued asset again and repeat the process.

7. Royalty Income

Type: Semi-Passive Income

Popularity: High

Royalty income is to allow others to use your original products, ideas, content, design, or process in return for a payment. Example of such an income is Franchise, eBook, Music and photos etc.

Royalty income can be earn by first creating an original product, or ideas. The you will sell this temporary usage rights to someone who want to use it in exchange for a cut from what they earn from your product. 

What they pay is a royalty fee and what you earn is called royalty income.

Some of the most famous companies build through royalty income is MacDonald or KFC. People who wants to open a new MacDonald franchise will pay MacDonald a royalty fee for using their logo, marketing and process.

You on the other hand can get royalty income by writing eBooks and sell them in Amazon, or any other publisher. Each book they sold, will give you a certain percentage as a royalty income.

Although royalty income requires a lot of work, but its potential can be quite limitless.

  • First, the starting cost is very low, which gives you a very low risk to start.
  • Secondly, there is no limit on how many original products you can create.
  • Thirdly, there is no limit on how many of the products you can sell.
  • Lastly, you determine your own success.

My Takeaway

Multiple income streams have made thousands of individuals into self-made millionaires every single year. With each additional stream of income will greatly increase your chances to become a millionaire. But the key to success is to be passionate in what you do and do it well. 

The 7 Streams of Income of Self-Made Millionaires:

  1. Earned Income
  2. Profit Income
  3. Interest Income
  4. Dividend Income
  5. Capital Gain Income
  6. Rental Income
  7. Royalties Income

Aim to have at least 3 streams of income which you are highly passionate in and do well in them. With discipline and determination to succeed, you will too become a millionaire.

But before you can truly become a successful, there is something you need to have.


Knowledge is what differentiate a dreamer from one who succeed. People achieve success not by lottery but because they have the right knowledge to and know what to do when an opportunity arises.

An average CEO read approx 52 books a year.

Knowledge can be learn from books or articles like this one. Reading can only make you wiser and smarter, so that you too maybe able to make the right decision when the opportunity presents itself.

Will Durant Said:

“Education is a progressive discovery of our own ignorance.”


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Disclaimer: I am not your financial adviser or lawyer, information found in our website are just my opinions. You should always ask your financial adviser or lawyer for any financial or law related advice.

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