This same opportunity does not exist when we focus our time on earned income, dividend income, and interest income. You can continue investing in rental real estate.īy focusing on rental income as our primary income stream, you unlock the doors to all other income streams. You can invest your rents into other small businesses. You can invest your rents into bonds, CDs, etc. You invest your rents into dividend stocks. TIME is the most important asset we have and you can now leverage your TIME to create new income streams. Once you have enough rental income to walk away from your job, you now have TIME. The main reason why is because it has the potential to reduce your need for earned income. This income stream should be our #1 priority. of stock in the companys early years also turned into multi-millionaires. In my humble opinion, rental income is the single most important income stream. Dividends return wealth back to the shareholders of a company and are paid. If these same people do create additional income streams, they’ll typically choose the two income streams offering the lowest income: dividend income (stocks) and interest income (bonds) These income streams will come from their contributions into their 401k plans. Instead of building new income streams, they continue working on their existing limited income stream: paycheck. This expense is the opportunity cost of the time lost at work. In addition to this time limitation, there is another expense they incur. This paycheck is limited by the number of hours of their life they’re willing to trade away. They spend the majority of their time earning a paycheck. Most people focus on three of these income streams: earned income, interest income, and dividend income. The order in which you create these various income streams dictates the ultimate success you’ll enjoy. 1.3 American Puts 1.3.1 Time Value (if no dividend) T.V.(0) PA(0) KB(0,T)S. This leaves five basic income streams to study, pursue, and possibly create. Exercise is optimal ithe dividend is large enough ( >interest loss + T.V.), therefore, if the dividend is small, time-to-maturity is large, it is unlikely to exercise early. Capital gains from selling appreciated assets. I have zero interest whatsoever in these two income streams:Ģ. Of the seven income streams, I’m personally only interested in pursuing five of them. I am however, extremely interested in the income streams of millionaires and found this summary to be interesting. It doesn’t change your life in any meaningful way. Paper wealth is (for the most part) meaningless. I’m personally not interested in the “millionaire” status. Interest from savings, CDs, bonds, or other lending activities. Capital gains from selling appreciated assets.ħ. Royalties from selling rights to use something they’ve written or invented.ĥ. According to the IRS, most millionaires have these seven income streams:Ĥ.
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