7 Income Hacks: Salary, Rent Out, Invest, Create, Sell Assets, Lend Cash, Royalties Money You Make: The cash you earn from your job or running your own business is the foundation of your money life. This includes your paycheck hourly wages, sales cuts, and even what you pocket from your own company. The government takes a slice of this income, and getting how it works is key to planning your spending, putting money aside, and reaching your money goals. Profit You Gain: Money you make from buying and selling is also known as “capital gains”. Here’s how it breaks down: Buy and Sell: This can mean different things, from flipping houses to trading stocks . In all cases, you buy something (a house, stock, etc.) at one price and then sell it for more.Capital Gains: This is the extra cash you get when you sell something for more than you paid. So, if you buy a stock for $100 and sell it for $120, you pocket $20 as your capital gain. Interest Income: Interest income is simply the money one makes from allowing one’s money to work. In most cases, it is regarded as compensation that you get for lending your money to another. Now, this may happen in different ways, such as: Savings Accounts: This is when banks are able to pay interest for putting money in a savings account. With a low-interest rate, little risk is involved, and it is an easy way to get additional income.Certificates of Deposit: Enjoy a preferable interest rate in a CD if you let your money be there for a lump sum of time in comparison with regular savings accounts.Bonds: Bonds are essentially a type of loan you make to governments or companies. In exchange, you get interest payments from time to time and the eventual return of principal.Peer to Peer Lending: Online platforms accumulate money to lend it to different people or businesses in need of loans. You can invest in these loans and gain interest on their repayment. Dividend Income: Dividend income is a small return for being a shareholder of the company. It literally means part of their profit is returned to each shareholder. Think of this once more: suppose that Company A has actually had an extremely good year, with really good money in their pocket. Therefore, they would want to reinvest some of it back into the operation of the business and share some of the extra profits to investors as dividends. This profit distribution is referred to as a dividend. Dividends are typically quarterly, although the frequency and amount may be variable depending on the performance and policies of the company. Not all companies pay dividends, though established and profitable companies do use them to help attract and retain investors. Worth noting is the fact that, unlike interest income, which is seen as a source of more stable income, dividend payments are not compulsory and may be dependent on the financial health of the company. Rental Income: You get rental income when you let someone use your property for a certain time. It’s a common way to make money from real estate investments, whether you own a house, apartment, or even a business space.Let me explain how this works: As the landlord, you lease your property to someone through a rental agreement. The person renting pays you a set amount each month, for the right to live or run their business on your property. This rent can give you a consistent income, but it also brings duties like upkeep of the property and handling relationships with those who rent from you. Capital Gain: As I mentioned above. This is the extra cash you get when you sell something for more than you paid. So, if you buy a stock for $100 and sell it for $120, you pocket $20 as your capital gain. Royalties: Royalties are periodic payments subtracted by a user and earned by the owner or originator of the property. Think of it as licensing fees. Here is how it goes: Intellectual Property: That would involve artistic works: music, novels, artwork; inventions, which are patented; brand logos and trademarks.License: The owner of the intellectual property grants permission, i.e., most commonly, a license to another party, for its use in a particular way. For example, a musician may license a song to a streaming service or an inventor may license a manufacturer to use patented technology.Payments: A royalty is the money a subject pays a holder in return for the license, usually portioned as a percentage of turnover or running time from the use of the intellectual property. For example, each time a song is being played on a platform, the musician gets a certain percentage as a royalty.Royalties are literally a mine of continuous income for creators and inventors long after they are dead and gone, much after the act or initial creation or invention has been done. It is, in essence, monetization of intellectual property and therefore acts as an incentive for innovation and creativity. On the other hand, there should be a justified royalty rate with the licensing agreement safeguarding, at all costs, the interests of the owner of the intellectual property.
