There are several types of Income streams through which people earn money. Seven of them are discussed in this write-up.
Increasing the variety of sources of income is now a crucial tactic in pursuing success and financial independence. Even though having just one job can give security, it’s frequently insufficient to build wealth and become a billionaire.
That’s when the idea of having several sources of income becomes relevant. The average millionaire, as the cliché goes, has seven sources of income.
We’ll examine seven different types of income streams in this post and see how they can help you reach your goal of becoming a millionaire. We’ll also give instances of how different sources of money can be used.
7 Types of Income Streams to Consider in Kenya
1. Earned Income
The main money you receive from your job or career is called earned income. It’s the familiar monthly salary that most people rely on. Earned money is a starting point, but its earning potential is frequently constrained. People in the Philippines have access to earned income in a variety of sectors, including manufacturing, services, healthcare, and technology.
Example: John receives a steady monthly salary from his job as a software developer at a global corporation in BGC.
2. Income from Interest
Savings accounts and products with fixed interest rates for short-term bank deposits produce interest revenue. Even though interest income offers some stability, your money may lose value over time because bank interest rates are usually lower than the rate of inflation.
Example: Maggie earns interest income from her bank deposits and keeps a high-yield savings account. Nevertheless, it is difficult to keep up with growing costs given the low-interest rates.
3. Revenue from Profits
Profit revenue is derived from a variety of side projects, gigs, and businesses. It entails using your network, abilities, and talents to generate extra revenue. This form of income can be generated through part-time enterprises, freelancing, or entrepreneurship, and it has the potential to develop significantly.
As an illustration, Maina successfully operates an online store offering goods that are obtained locally. By utilizing his marketing expertise and growing his clientele, he makes money.
4. Dividend Income
Investing in dividend-paying assets like mutual funds, dividend-paying stocks, company ownership or Real Estate Investment Trusts (REITs) generates dividend income. Dividends are a regular source of revenue that corporations provide to their shareholders as a portion of their profits.
Example: Sarah invests in dividend-paying equities listed on the Nairobi Securities Exchange. Her portfolio consistently generates dividend income for her, which adds to her overall wealth building.
5. Income from Rentals
Leasing or renting out properties to renters is how owners generate rental income. In Kenya, real estate has long been a well-liked investment option, and rental properties can generate a reliable passive income stream.
Carlos, for instance, owns several homes in a Kenyan city. He makes more money than he pays for his mortgage by renting out these houses, which also helps him develop financially overall.
6. Income from Royalties
When copyrighted works—like music, images, or literary content—are licensed for commercial use, royalties are received. Even though royalties might not seem like much at first, producing large quantities of your work or allowing others to use it can result in a reliable source of passive income.
For instance, Andrea is a gifted songwriter who receives royalties when her songs are featured in movies and ads. Royalties come in steadily as her songs become more and more successful.
Read also, Ten Passive Income Ideas to explore in Kenya
7. Capital Gains
Realizing capital gains income involves selling assets like stocks and mutual fund shares. Individuals can profit from capital gains by investing in assets that appreciate in value and then selling them for a greater price. Certain investment schemes, such as Mutual Funds, provide exemptions from capital gains taxes to encourage participation.
Jameson, for instance, has a diverse mutual fund portfolio. His investments increase in value over time, and he sells them to realize capital gains. These successes advance Jameson’s financial accumulation and move him one step closer to becoming a millionaire.
Conclusion: Types of Income streams to consider in Kenya
Whether you are already in the game or you are just starting over, having multiple income streams could easily change or elevate your financial status.
