One of the most common financial myths is that millionaires get a wealth of gains from a big payday – public offerings, lucky stock picks, inheritance of windfalls. Reality? A typical millionaire has at least seven income streams. Diversification is not only used for investment; it is the basis for building and maintaining wealth.
On the journey from work in the company to financial independence at the age of 34, I learned that having multiple sources of income is key to weathering downturns, career transitions and unexpected life events. These seven income streams not only create financial security—they provide the freedom to live in your own life.
So if you focus only on day income, it's time to think about bigger things. In a recession, W-2 income may rush to disappear. But let's start from there.
1. Earned income: Starting point: For most people, their main source of income is work or business. This is your basis - paying the bills and providing cash flow to your investments.
Early in my career, I realized that maximizing wages is not just about working harder. It's about smarter work. Negotiating salary increases, developing high-income skills and strategic conversion work helped me increase my income. But the real magic happens when I dump income into other wealth-building vehicles.
If you are working on a 9-5 job, look for ways to increase your income by promoting, moving sideways or developing skills for demand. Avoid lifestyle inflation. The more you save and invest from your income, the faster you can build multiple revenue sources.
Go beyond the company competition and maximize your 401(k) contribution. If the amount you save per month doesn't hurt a little, then you're undersaling. You will get used to life with less.
Willing to get more salary. One of my biggest mistakes was staying out of loyalty for 11 years. I turned down a two-year guaranteed deal, which increased the salary from upstart competitors by 50%. The wrong loyalty cost me at least $1 million in revenue. Be your own advocate. If your company does not pay your market value, negotiate or find what will be.
2. Business Income: Over Salary: Starting a busy or mature business on the side is one of the fastest ways to increase revenue potential. Unlike a job whose income is limited by a salary band, a business has unlimited ceilings.
A multiple of the income or income that a business sells, making every dollar you generate more valuable than your salary. For example, if your business earns $10,000 a year and your industry business earns 10 times the revenue, you create $100,000 in assets. Grow your profits to $100,000 a year and you have built a $1 million business.
Almost all the richest people in the world are entrepreneurs. They move from consumers to creators and build equity. Employees rely solely on income; business owners generate income and equity at the same time. This is a huge difference.
I launched the Financial Samurai in 2009 as a passion project outside of work hours and didn’t realize it would eventually generate enough income to support my lifestyle. Whether it’s consulting, freelancing or online trading, building a business creates an asset that generates revenue long after completing the initial job.
3. Dividend Income: Reward for Investment: Dividends are one of the closest things to passive income. Invest in dividend payment stocks and ETFs, which means you are only paid to hold the stock. Some U.S. listed companies called "dividend aristocrats" have increased their dividends for 25 consecutive years, demonstrating their financial stability and commitment to shareholders.
During the years of building wealth, I accumulated dividend stocks that now help to pay discretionary fees such as holidays and entertainment. Early reinvestment of dividends maximizes compound interest returns, creating a strong passive source of income.
4. Rental Income: Power of Property: Real estate is my favorite asset class to build wealth. If you plan to stay in one place for at least five years, it is a wise move to have your primary residence. It can solve your living expenses and make everything else more affordable.
Owning a rental property takes this step a step further, resulting in semi-criminal income and long-term wealth. Good property provides consistent cash flow, hedge against inflation and appreciate over time.
I bought my first rental property in my 20s and used my job income to secure a mortgage. Over the years, I have seen how real estate provides stability and room for upwards. Rents rise, real estate appreciation and mortgage repayment are the third level of power to create wealth construction.
Just prepare for maintenance and tenant issues - they are inevitable, which is why rental income is not really 100% passive. The younger you start owning a rental property, the more passion you have for managing them may fade away as you age.
5. Capital gains: Make money over time: Long-term investment in stocks, index funds, real estate, and even collectibles like rare coins can generate capital gains. The key is patience - allowing investments to be appreciated over time, rather than pursuing short-term profits.
One of my biggest investment courses is learning to get my winners running. Premature sales may mean missing out on exponential growth. Short-term traders may be lucky, but real wealth is built with minimal trading through long-term investment.
What are the main benefits of long-term capital gains? The tax rate is lower compared to income. Ultimately, we should all consider selling some winners to fund a better life.
6. Interest Income: Let your risk-free funds work for you: Interest income may not be exciting, but it plays a crucial role in a diversified portfolio. High-yield savings accounts, US Treasury bonds and private lending platforms can generate stable interest income with relatively low risks.
In today's high interest rate environment, I've been keeping more cash in Treasury bills and monetary marketing funds without paying under 4%. This stable income serves as a buffer against market downturns and economic uncertainty.
7. Royalties and Licenses: Income from the Ideas: Here, things get interesting - making money from intellectual property, including books, patents and even YouTube videos. If you create something valuable, you can get paid without actively working hard.
My e-book on how to negotiate severance payments is one of the most satisfying projects of my career, writing “How to Design a Layout.” This book can help people get rid of the financial mat work – I get royalties from it every month, thus increasing my passive income stream. Whether you are writing, creating music or developing software, making creativity profitable can be a game-changer.
If you have specialized knowledge or skills, consider a way to package them into a digital product, course, or license agreement. Early work may be important, but long-term rewards are worth it.
Your goal is not to add all seven revenue streams overnight. Instead, build them gradually. First, maximize your income and then use it to fund investments, affiliates, or rental properties. Each milestone sets the next milestone for you.
Being a millionaire is not about luck – it’s about always making wise financial choices. The more income you build, the more resilient it is. Whether you’re just starting out or already on the path of financial freedom, diversifying your income is the key to long-term success.
“Buy this, not that: How to spend your own way on wealth and freedom” And, recently, (Penguin Random House/Portformation, 2025).
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