7 Streams of Income That Can Help You Become a Millionaire

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Last Updated on March 16, 2022 by Rebecca Lake

7 Streams of Income That Millionaires Have

Do you dream of becoming a millionaire?

If so, the secret to your success may be creating multiple streams of income.

According to a study that’s been linked to the IRS, the average millionaire has 7 streams of income.

That’s right, 7.

Your typical millionaire isn’t counting on a single paycheck to build wealth. And if you want to get out of debt, save money and improve your financial life, you shouldn’t be either.

Fortunately, creating multiple streams of income is a realistic financial goal for many people.

Related post: How to Get Rich From Nothing and Become a Millionaire

7 Streams of Income Quote: Where Did It Come From?

If you Google “multiple streams of income” you’ll see lots of websites and blogs that mention the typical millionaire having 7 streams of income.

While there’s no specific 7 streams of income quote, there is a report that was published on the IRS website that takes a closer look at how the rich (and not-so-rich) manage their finances.

That report (here’s the link if you want to dig through it) basically says something that’s pretty straightforward:

The wealthier you are, the more diversified your sources of income are likely to be.

And it makes sense.

Because when you have extra money to invest, start a business or turn into passive income, you’re less likely to get stuck living paycheck to paycheck.

But in case you’re looking for a 7 streams of income quote, here’s a great one from Warren Buffett (who, by the way is a money genius):

“Never depend on a single income. Make investment to create a second source.”

Personal Capital is a go-to pick for managing your money, including:

  • Creating a monthly budget
  • Tracking your spending
  • Minimizing investment fees
  • Monitoring your retirement readiness

Sign up for Personal Capital now to see all your financial accounts in one place!

What Are the 7 Different Streams of Income?

If you’re interested in creating multiple streams of income, here’s something that’s important to remember:

You don’t necessarily need to aim for 7 sources of income right out of the gate. 

Having as few as two income streams versus is a good place to start. If you get laid off from work, for example, you have a second income stream to make up for your lost paychecks.

As you go through this list, consider which of the 7 streams of income are the best fit for your financial situation.

1. Earned income

Earned income is just what it sounds like–money you earn.

According to the IRS, there are two ways to get earned income:

  • You do work and someone pays you for it
  • You own or run a business or farm

The IRS definition of earned income includes wages, salary pay, tips and money you earn from self-employment.

What all these types of earned income have in common is that they’re active income. In other words, you have to do something for this income stream to continue.

If you’re interested in achieving millionaire status, then what you want to add into the mix are some passive income ideas.

Passive income or residual income is money you generate while doing little to no work. And the more passive income you have the less you have to work.

Read these posts for ideas on how to boost your earned income:

How to Make More Money in 2021: 21 Genius Ways to Grow Your Income

12 Top Money Making Skills That Can Help You Earn a Six-Figure Income

2. Interest income

Interest income is money earned money you save, usually in a savings account, money market account or certificate of deposit account.

Adding interest income into your 7 streams of income lineup may not make you rich unless you’re keeping a ton of money in savings. But it can be a simple way to create extra income from month to month.

Banks pay interest income to savers to encourage them to keep their money there. In exchange, banks can charge you fees for a savings account.

So that makes it important to get the best interest rates on the money you save. And for that, I recommend skipping the traditional bank and going to an online bank instead.

Online banks tend to have lower overhead costs than regular banks. So they can pass that on to savers in the form of higher interest rates.

Plus, online banks tend to charge fewer fees so it’s a win-win.

If you’re looking for the best online savings account, I recommend a Savings Builder Account or a Money Market Account from CIT Bank. Both offer an APY that’s well above what you’ll find at traditional banks.

3. Dividend income

Dividend income is money that you receive for being a shareholder of a company. It represents a percentage of a company’s profits.

Not all stocks are dividend stocks. But many publicly traded companies offer dividends to their shareholders.

Dividend income can be a great option for creating passive income because you don’t have to do anything to earn it, other than own a dividend-paying stock. And you can easily grow your dividends by reinvesting them into more shares.

A simple way to get started with dividend investing for passive income is to open an online brokerage account.

With an online brokerage account, you can buy and sell individual shares of stock. Some brokerages also let you invest in mutual funds, exchange-traded funds, bonds and other securities.

If you’re interested in opening a brokerage account to trade stocks, I recommend M1 Finance.

This investing app makes it super easy to start building a portfolio and earning dividend income with minimal fees.

>>Download the M1 Finance app now to start generating a passive income stream!<<

4. Rental income

Of the 7 sources of income millionaires have, rental income can be one of the most lucrative.

Rental income is generated by renting something you own, typically real estate. Paula Pant of Afford Anything has built an investing empire around rental income.

Getting into rental investing and becoming a landlord can have its pros and cons.

On one hand, you could easily create a solid stream of passive income this way. But on the other, being a landlord isn’t right for everyone.

Plus, purchasing a rental property can mean parting with some serious cash or taking on mortgage debt. And neither one may fit your financial situation.

But there is another way to generate rental income. And best of all, you don’t have to own real estate directly.

Real estate crowdfunding platforms like PeerStreet make rental property accessible for everyday investors.

When you invest in a rental property with PeerStreet you can earn a return without having to manage real estate yourself. PeerStreet does all the work for you.

If you’re interested in creating multiple streams of income with rental real estate, learn more about what PeerStreet offers.

5. Profit/business income

Profit income or business income is money you earn from selling something, usually a product or service.

For example, the bulk of my income is business income that I earn from freelance writing. And aside from passive income, this is my favorite type of income stream.


Because business income is something you can directly control.

You can’t necessarily dictate how much an employer pays you. But you can decide how much to charge for the products or services your business sells.

That’s one of the reasons I’m able to make multiple six figures a year in my business.

If you haven’t considered starting a business or side hustle yet, I strongly consider making it one of your 7 sources of income.

And if you need some ideas for starting a business or side gig, here are some of my best money-making suggestions:

60 Profitable Home Business Ideas to Start Now to Make Money

10 Flexible Side Hustles for Women That Pay Well (Earn a Full-Time Income!)

25 Creative Ways to Make Money From Home (Without a Job!)

How to Make $2000 a Month From Home With Flexible Side Hustles

6. Capital gains income

investing for passive income

Capital gains income represents income you receive after selling an investment for a profit.

You can generate capital gains income by selling things like:

  • Stocks
  • Mutual funds
  • Real estate

The great thing about capital gains income is that you can make a lot of it if you’re a savvy investor. (Just ask all the people who benefited from the Gamestop trading craze.)

The downside is that like other streams of income, capital gains income is taxable.

You’ll owe short-term capital gains tax or long-term capital gains tax, depending on how long you owned the investment you sold.

But there are strategies you can try, like tax-loss harvesting, to offset what you owe. (You can do this inside your M1 Finance brokerage account if you have one.)

Capital gains and investment taxes can be confusing. So if you’re considering this as one of your 7 streams of income, be sure to talk to a tax pro first.

7. Royalty income

Royalty income comes from letting other people or businesses use something you created.

The best example of royalty income is when musicians get paid to have their songs used in movies or on TV shows.

This stream of income isn’t common for most people.

7 Streams of Income Book Recommendations

If you’re interested in creating multiple streams of income to become a millionaire (or just improve your financial life) you may be wondering if there’s a book that can teach you how to do it.

The truth is there’s no specific 7 streams of income bible or anything like that floating around. But there are some great personal finance books that can teach you how to:

  • Create passive income
  • Earn more while working less
  • Start a profitable side hustle
  • Build a legacy of wealth to leave behind for your kids
  • Change from a broke mindset to a wealth mindset

If you’re looking for some 7 sources of income books to try, here’s my recommended reading list:

7 Streams of Income FAQs

How many streams of income do millionaires have?

Going by the oft-repeated 7 streams of income quote, then the average millionaire must have at least 7 sources of income.

The reality is that millionaires can have more or fewer streams of income; it’s difficult to know every person’s exact financial situation.

What’s clear, however, is that the concept of “less is more” doesn’t apply here.

If you want to be a millionaire or at least be in a position where you don’t have to worry so much about money, then having multiple streams of income is a good thing.

Having more than one stream of income means you don’t end up in a financial jam if your paychecks suddenly dry up or an investment flops. You’ve got backup sources of income that can keep cash flowing in.

How many streams of income do you need to be a millionaire?

The answer to this question is, it depends.

And honestly, you may already have multiple streams of income without even realizing it.

For example, you might have income from:

  • Your paychecks
  • A side gig
  • Interest earned on a savings account
  • Dividends from your 401(k) investments

That’s already four sources of income right there!

The key to reaching millionaire status with multiple streams of income is making the most of each one that you have. 

So for example, with earned income, you might aim to negotiate a higher salary for bigger paychecks.

With interest income, you could switch to a bank that pays a better rate on savings. (Again, I love CIT Bank!)

For dividend income, you could reinvest those payments into more shares of stock to grow your portfolio.

And with business or profit income, you could start multiple side hustles or businesses or focus on growing just one of them into the six-figure range.

How do you get 7 streams of income?

side hustle cash

Setting up multiple streams of income is easier than you might think. And as I mentioned earlier, you might have several streams of income going for you already.

If you’re interested in creating 7 streams of income (or more) you can start with taking a page out of the millionaires’ playbook and investing.

Investing can create four different streams of income:

  • Interest income
  • Dividend income
  • Rental income (if you’re investing in real estate)
  • Capital gains income

There are different ways to invest. The simplest may be to start with your 401(k) at work if you have one.

If you don’t have a 401(k), you could open an Individual Retirement Account or an online brokerage account instead.

IRAs are usually for the money you don’t plan to spend for several decades. You could trade stocks in a brokerage account to create capital gains or dividend income in the short-term.

Again, I recommend M1 Finance for stock trading, since it’s commission-free.

Aside from investing, here are a few other ways to start building multiple streams of income.

Switch to a high-yield savings or money market account

I mentioned this already but changing bank accounts is a simple way to earn more interest income each month. Again, take a look at the CIT Bank Savings Builder or Money Market Account to see if either one meets your needs.

Open an investment account

I’ve already touched on how great M1 Finance is for investing. But if you’re not ready to start day trading yet, there are some simpler ways to create investment income.

For example, you could download the Acorns app.

The Acorns app links to your checking account. Each time you have a transaction, Acorns rounds up the difference and invests your spare change in low-cost ETFs.

Acorns isn’t necessarily a substitute for a 401(k) or a regular brokerage account. But it’s a great way to start creating some investment income as you learn more about the markets.

>>Download the Acorns app and get a $5 bonus to start investing!<<

Start a side hustle or business

I’m a huge fan of side hustles and I believe everybody should have at least one.

Side hustles can generate profit income and there are so many ways you can do it, online or off. If you need some ideas, here are 117 legit side hustles you can start right now to make extra money.

What is residual income and are there 8 streams of income?

In writing this post, I could have easily titled it “8 streams of income” instead of 7. That’s because there’s one more stream of income you can have: residual income.

Residual income is money you earn after work has already been done.

This type of income is the passive income I mentioned earlier. To get residual income usually means doing some type of work upfront, then making money on it later.

The easiest way to earn residual income is to create something that will make you money on autopilot.

For example, you can create residual income by:

  • Selling stock photos online
  • Creating and selling an ebook
  • Creating and selling an online course with a platform like Teachable or Thinkific

The beauty of residual income is that can be mostly set-it-and-forget-it. You may need to update your ebook or course occasionally but otherwise, you’re making money while you sleep.

Blogging can also help you create residual income in a way.

For example, you can make money by running ads on your site. As long as people are visiting your blog regularly, you’re making money.

You can also make money passive through affiliate marketing or selling products, like courses or printables.

That doesn’t mean blogging doesn’t require any work, however. In fact, there’s a lot that goes into it in the beginning.

But once you get your money-making systems down you can earn a residual income around the clock.

To learn more about how to make $3000+ every month blogging, check out my ultimate how to start a money-making blog guide.

Or if you’re ready to pull the trigger on starting a blog to make passive income, head over to Siteground now to sign up for hosting!

How can I make $1000 a month in passive income?

If you need to make $1000 a month or more in passive income, this might seem like an overwhelming goal. But it’s actually pretty realistic, given how many ways there are to make money these days.

I’ve got a post that outlines some of the best ways to make an extra $1000 a month you can check out next.

7 streams of income

What are you doing to create multiple streams of income?

If becoming a millionaire is one of your big financial goals, then having 7 sources of income (or more) can help you get there.

The tips I’ve shared here can help you get on the path to creating multiple sources of income but now I want to know:

Do you have a tip or secret for creating multiple income streams?

If so, I’d love to hear about it!

Drop me a comment and tell me your multiple streams of income success story. And don’t forget to pin and share this post!

Read these posts next for more money-making inspiration:

15 Best Survey Sites for Making Quick and Easy Money

35 Legitimate Online Proofreading Jobs to Make Money From Home

40 High-Paying Side Hustles for Moms Who Want to Make Extra Money

7 Streams of Income You Need to Become a Millionaire

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About Rebecca Lake

Rebecca Lake is a freelance writer, personal finance expert and homeschooling single mom of two. Since 2014, she's paid off nearly $100,000 in debt and grown her net worth to seven figures. Her work has appeared online at top personal finance websites, including Forbes Advisor, Bankrate, Investopedia, The Balance, CreditCards.com and U.S. News & World Report. Find out more.