A Simple Guide to the 7 Streams

The average millionaire has seven streams of income, was a pretty popular thumbnail four years ago. During the pandemi, 9.6 million Americans were unemployed after several businesses closed and couldn’t find toilet paper for the customers they did have. With over 16 million Americans unable to work or working remotely from home, financial gurus all over the YouTube seemed to have one simple answer, ‘build yourself seven streams of income.’ —So, of course, I grabbed seven notebooks.

I don’t know how familiar we are with each other just yet; Still, I became enamored with the speculation that we all got the same 24 hours and that becoming an influencer is pretty much as ‘simple’ as we all believe it to be while sitting at home (wondering what y’all did with all that toilet paper.) On January 18th, I mistakenly figured, why not? I declared myself self-employed (since I had lost my job anyway) and spent my refund on ring lights and waist trainers. Since I was too afraid to utter those dirty words aloud, I searched up the seven streams, filled in the blanks, got myself a Gmail, and called myself a businesswoman. Fetch Beyond Entertainment has been my endgame since Busta Rhymes taught me the word conglomerate. Thirteen years later, I figured we all gotta start somewhere and touched up my resume as a freelance content writer. I’m still not sure if I’m doing this right, but if you’re still reading this, you must have a few questions yourself.

Having seven income streams sounds appealing for more than getting rich quicker or never having another rainy four years. Having multiple income streams gives you the freedom you desire to live the life you want. Knowing there’s always money in the banana stand can also give you a sense of security in life’s most unexpected moments. Most of the ‘streams’ are passive and do not require you to be actively involved. And that’s where the gurus get you, asking you for thousands of dollars for their help to get you to the ‘next level.’ Seven income streams may seem impossible to achieve on your own, especially if you’re like me, a small-town nobody who’s read one self-help blog too many, but finding your seven streams is all about finding the right mix.

As promised — Earned income is the income you earn from your job. Profit, or business income, comes from selling a product. These both are active incomes and are the difference between being employed and being self-employed. Rental income is passive and comes from properties you rent, and interest income is a passive income that generates from a line of credit or interest from loans. The other passive incomes (dividends, capital gains, and royalties) aren’t as common — at least not in my neck of the woods. Every successful business plan starts with a vision, and knowing where you want to end up is important when making major life decisions. Regardless of your goal, it’s always good advice to never put your eggs in one basket and remember that the “good news people” work smarter and go the extra mile. Consider your niche and target audience when deciding what streams can benefit you. With the right mix of active and passive streams, you might fuck around and choose to become an influencer too.

Earned Income

The most straightforward stream to understand earned income is the money you make from working a regular job. The money you make from being self-employed can also count toward your earned income. As long as you are working for the money, it counts as earned income. Since the pandemic, work-from-home and commission-based jobs have become increasingly sought after. While you should consider holding onto your job as long as possible, most people begin building out their streams before announcing to everyone they make $27k a week from passive incomes.

Keeping your 9 to 5 is egg number one in your basket. Whatever your goal, you don’t want to end up standing in line at the post office because you bit off a little more than you could chew.

Profit Income

If you ask me, this is the most (and only really) talked about of the seven streams. Profit, or business income, is income earned from owning a business. As every content creator globally volunteered as tribute to teach you the secret behind these even secreter streams, all the ‘streams’ they speak about are passive and can help you generate income online. Whether it be through dropshipping, YouTube automation, copywriting, or even starting a podcast, these passive incomes aren’t so passive when you’re starting from the ground up.

As I said before, whatever your endgame is, starting a business is a no-brainer second step upstream toward financial freedom. You may not have your eyes set on a blue check like me, but considering influencer marketing is now a $21.1 billion industry, sites like Trend, Compose.ly, and Fiverr can help you profit off of any skill you may not be using and who knows what may happen — You just might get good at it.

The rest of the list is other passive streams of income. When I decided to write on this topic, I figured it was an excellent way to sneak in that I’m starting to build my seven streams. We all know there is no perfect formula for success. But when I turned to Google late that night for questions I already knew the answers to, I read it was time to stop making excuses and put in the work. If this secret key to financial freedom was somewhere between streams three and six, I strapped up my yellow boots and grabbed the nearest pole for fishing.

Rental Income

Renting properties is another straightforward stream and may seem like a good idea now that you think about it. It is a passive income, but it could become a third job if you dream as big as I do. You get out what you put in life, and the amount of money you make will depend on how much work you put in. I clicked around the Internet long enough to find the ‘real estate investors’ offering half-off training courses and buy-one-get-one workshops and was left feeling like, what’s a couple of classes? Once you receive your real estate license, you can begin working for yourself or find an entry-level position at an established real estate company.

Your life may not shape up like a Love It or List It episode, but investing in a property with the potential for high rental demand can protect you against inflation with the rising cost of living and is typically earned monthly. That’s three eggs if you have the time and resources.

Interest Income

Honestly, I don’t totally understand how a loan can earn you money. But this income stream can be a reliable and predictable source, as interest rates are typically fixed and made over a set period of time. I considered forming a private strategies team and creating an investment group to check it off my list. Right along with everything else we discovered on the Internet in the last four years, I grew curious about crypto, NFTs, and AI art. (mostly Googling “Can I sell AI art as an NFT for crypto?”) Other options include shopping around for high-yield savings accounts, investing in government or corporate bonds, certificates of deposit that offer competitive interest rates, or turning your living room into Shark Tank.

Generating a stream of interest income can be as simple as loaning money to others or as complicated as loaning money to others. Once arranged, however, this stream is entirely passive. But keep in mind that the amount you’re able to earn is limited to the amount you can lend.

Dividend Income

This stream may be a little intimidating if you don’t have any experience with the stock market and trading. But ever since The Wolf of Wall Street, I’ve been Googling ways to infiltrate the big board like Kim Kardashian did the State Bar of California to get my hands on some illegal tender. Earned from socks, experts find dividend income more reliable than capital gains because dividends are earned by owning stocks that pay out a portion of the company’s profits to shareholders.

Passive and relatively stable, this stream requires capital to get started. If you know what you’re doing, you can get started by investing in high-quality dividend-paying stocks with a consistent track record of payouts and stable earnings.

Capital Gains

As simple as I can make it, capital gains are a form of income earned from selling property or other investments that increase in value. Real estate and stocks are the most commonly received capital gains. The difference between dividends and capital gains is that the investment must be sold to generate income. Limiting your stream to how many assets you can buy and sell. Which turned my attention back to NFTs and crypto. In terms of building wealth, saving money to invest can be hard. And after reading Nick Maggiulli’s summary of the streams, I agree that after you’ve invested, capital gains is a truly passive form of income that requires relatively little effort on your part.

As my boy Nick said, to maximize your capitals stream, consider continually investing in a variety of stocks, bonds, and other assets like antiques and artworks, and hold them for a long time before selling them.

Royalty Income

Royalty income is exactly what you think of; payment for the use of intellectual property like music, literary works, and logo artwork. There are two types of royalty streams, payments for copyrights, trademarks, and patents and payments for extracting minerals like oil and gas. You can make money by either selling the property outright and receiving your royalties upfront or by charging for the use of the property. Nick also mentions that while royalty income scales well, it requires a product with demand, and there is no guarantee that you see a return.

So my mind landed back on crypto and figured if I’m building a stream to my new future, whatever happens over on OpenSea will be egg number four. (I also created some for Rarible, so if it works out, I guess that’s five.)

Of course, you don’t need all seven streams to become a millionaire. Finding a balanced mix that works best for you and your vision is more important than checking a list. You could have one of each or seven different businesses. The goal is to build one stream from the next, like taking some of your earned income and investing it for interest or dividends.

What stream would you paddle up toward financial freedom if you could start today?