Do you want to earn more in 2020?
Then you need to learn how to expand your sources of income.
We all know that the major source of income for most people is either by earning a salary or being a Buisness owner but have you ever thought about other ways you could earn money apart from those two?
If your answer is yes, then this article is for you.
Asides your main hustle, there are so many other things you could do as a side hustle to earn more income.
According to reaserch, most billionaires have at least 3 -7 streams of income that they actively earn from.
To begin with, let’s check out the different sources of income we have:
(1) Earned income:
This is the income you get from working a fulltime or part time job. The income mostly comes in form of salary, wages or commission.
Basically, you’re being paid for your time and man power and It usually requires your full commitment at the time you are there.
It is the most commom type of income people receive.
Some of the People under these category are bankers, doctors, laborers, e.t.c
Throughout our careers as income earners, we are constantly hoping for our income to grow, which is why we take more educational courses, we gain more experience, become more efficient and offer more value to employers which in turn mostly leads to an higher pay .
Earned income is good and important to an extent but it will never by itself lead to that financial freedom you desire or give you the opportunity to retire from a full time job.
In order to acieve all the above mentioned freedom, you must establish other sources of income.
(2) Passive income:
Passive income is income that requires little to no effort to earn and maintain.
It is called progressive passive income when the earner expends little effort to grow the income.
Passive income is basically when you’re still being paid after the work is done.
Most of which includes revenue from real estates or business investments , royalties from song or movies.
It is a very sweet type of income in the sense that most of the times, you don’t need to be actively present in order to earn from it, its either you have done the job down and you’re being paid back over a long period of time or you’re letting your money work for you .
Later in this series, we will be looking at some passive income ideas that we can use to make more money but before then, let’s examine the types of passive income sources we have.
Types of Passive Income
(1) Interests Income:
Interest income is the money you get from lending money to someone else to use, with an agreement between you and the borrower that your money and an added gain will be returned at a stipulated time .
For example, lending your money to the government in form of buying teaesury bills.
(2) Business/Profit Income:
This is basically money gotten from selling something (a product or servce) for more than the cost price.
For example, you could buy a product at a cheap rate from a manufacturer and add your own gain when reselling to other people.
In order to earn from a business you need to either be an Entrepreneur or an investor.
This is basically the Income you get in return for buying shares in a company.
This is a very passive type of income, it also gives you the right to be a shareholder in the company.
This is the money gotten as a result of letting someone use your products, ideas or services and getting a return from it.
The people who are with your products or idea make all the revenues, they do all the hard work to make the product or idea sell and then at the end you are given a small percentage of whatever they earn.
For example writers earn royalties from their publisher.
(5) Capital gains:
Capital gain is the money that you get because there has been an increase in the value of an asset that you own.
For example if you bought a house in Lagos in year 2000 for N5 million, because of the development in the area, that same house would cost N55 million in the year 2010 and you might decide to resell it.
Once you resell the house for N55million, your capital income is N50 million naira.
There might be some taxes to be sorted out but that varies in different countries.
(6) Rental Income:
This is Income that you get as a result of renting out an asset that you have, for example your house.
It is a very profitable source of Income but most times it takes a very huge amount of start up capital to have acquire the assets that can be used for rent.
It is paramount that we should all have different sources of income, but we also need to study each of these sources of income, determine at least 3 that works for us best and try to get the best income out of it.
I can assure you that by doing this, you are on your way to infinite financial freedom.
Check out my next article where I would be writing about different passive income ideas that we can use to earn more money.
Did you know that your family and friends should also be financially free so that they won’t have to always beg you for money? Therefore, don’t forget to share this post with them.
Please click on the like button and also share your comments, it gives me a better insight on how to help you grow your financial life better.
I will leave you with this quote from Warren Buffet that says,
The more you Learn, the more you Earn.