Tue, October 15, 2019

Streams of Income

Multiple streams of income means you are getting money in more than one way. Some examples would be

  • Trading time for money
  • Leveraged income
  • Residual income
  • Time value of a dollar

The first is “trading time for money.”  This is simply trading your time or services for money; it is what we call a “job.” An example of this would be getting paid for mowing yards.

The second is “leveraged income.”  Simply put, you hire someone to do the work for you and you get paid for their work. An example of this would be catering.  I may cook, but I hire people to serve the food and pay them a small fee.  I get paid $100 for serving, I pay them $75 to serve.  I can’t do it by myself, so my time is leveraged.

“Residual income” also called “passive income.”  It is money that you contiue to receive once you start an effort. Some examples are

  • renting a room to someone
  • royalties: payments for books or music
  • payments for an invention or patent

The good thing about this one is that you could break your leg, go on vacation or spend all your time another business you  still make money.

The last one is “time value” of a dollar is the belief that a dollar today is worth more than a dollar will be a year from now.  This is very cool because things like stocks, CD’s or bonds will usually be worth more in a year.  Your money makes money for you. It is how banks and credit cards make money: Interest.

So, to wrap it up,  it is probably a good idea to have more than one way of making money.

(article by Tyloid)

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