Six streams of income you should know about


There are two types of streams of income, active income and passive income. Your business or job is most likely an active stream of income. This is whereby you actively work by selling a product or a service, and someone pays for it. It has a very simple and a direct connection between work and payment.

Passive income is however a situation where the income is not directly connected to the work you do. However, it’s good to note there is still work involved to generate revenue. Nothing is good it attained without struggle. To be specific, the work needed for a passive income takes place early on, and the income comes later.

A good example is an online store. Most of the work happens at the beginning where you build a website, upload the products, and promote them. The passive income comes way later as people begin to buy products from your online store. This is considered passive income because people can even buy your products when you are still sleeping.

 I however get to highlight 5 streams of income as listed below

Earned income

Earned income is basically your primary income stream through a job for example.  Most people start here, and many don’t go any further. Its however good to note most people find earned income very limiting and they make effort to tap into other streams of income.

Profit Income

Profit income is as a result of selling a service or product for more than the production cost. This can happen in situations that you could open a store and sell a product or in this case offer professional in service and earn money in return.

It is hard choice to move from earned income to profit income but it is the dream of many existing employees. 

Interest Income

Interest income is earned in a situation where you as an individual or your business has spare cash in the bank account earning interest. 

  This can happen when you invest your money in a savings scheme and use the power of compounding interest to gain a passive income. Also, when you buy government bonds which is another safe investment that will also generate interest.

Dividend Income

One earns dividend income when one buys shares in a certain company and become part-owner of that company which makes you entitled to dividend payments.

Rental Income

One of the excellent ways to invest is property ownership. Investing is a great way to protect your money and generate income from rent. The only downside to this stream of income is that it requires a substantial investment on initial stages unless it is part of an investment scheme. Secondly, it’s a long-term investment it may take a bit of time to enjoy the returns.

Royalty Income

Royalty income is a passive income stream generated by designing, building, or coming up with something new and unique and then charging people and businesses to use it. A good example is Musicians. The musicians receive royalty payment for every album sold and every time it is played to the public.


We are living in a time where spreading your income streams is becoming a necessity due to harsh economic times. The wise saying don’t put your eggs in one basket, applies particularly well to this case. Having more than one stream of income is an excellent way of earning more money and spreading risk\


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