The Average Millionaire has 7 Streams of Income (2024)

FAQs

Does the average millionaire have 7 streams of income? ›

According to a report from the IRS, the average millionaire has not one, not two, but seven different sources of income. That's right – seven streams of money flowing into their bank accounts, building their net worth and securing their financial future. Why are multiple income streams so powerful?

The most written about income streams typically include: earned income, profit income, interest income, dividend income, rental income, capital gains, and royalties. The theory goes that diversifying your income in this way can protect you against financial downturns and accelerate wealth accumulation.

You can have as many income streams as you want, but the right number for you will depend on your goals and current resources. If you don't have a lot of time to devote to establishing many passive income streams, it may make sense to only have a few until you can free up time.

According to IRS standards, a monthly income of approximately $45,000 qualifies someone as wealthy. However, if you're aiming for the top 1% as measured by the Economic Policy Institute (EPI), you'd need to earn about $68,277 monthly.

Ninety percent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests his money in real estate.

The Bible also offers some pretty amazingly specific guidance on diversifying our income streams. Ecclesiastes 11:2 says, "Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth." In other words, don't put all your eggs in one basket.

It follows, then, that equity income, including capital gains, provided the main source—83%—of total lifetime income for the wealthiest 0.1%.

Most income streams are account based, that is you set up an account with your super fund, transfer a portion of your super to the account and then your fund pays you the amount you choose (subject to minimum drawdown requirements).

a regular supply of money that comes from something such as an investment or business: These bonds provide steady income streams. There would be an attractive income stream from renting out part of the property. The idea was to give them not only homes, but also an income stream from the rental units.

How do beginners start passive income? ›

This means your earnings per stream can fluctify depending on total monthly streams and subscription revenues. Also, Spotify's pay per stream averages around $0.0032. Therefore, to earn $1000, you'd need roughly 312,500 streams. But remember, this is an estimate.

To live "comfortably" as a single person in 99 of the largest U.S. metro areas, you'll need a median income of $93,933, according to a recent SmartAsset analysis.

Furthermore, Richard Corley, author of “Rich Habits: The Daily Success Habits of Wealthy Individuals”, analyzed IRS data and found that 75% of millionaires have multiple income streams.

According to Schwab's 2023 Modern Wealth Survey, Americans perceive an average net worth of $2.2 million as wealthy​​​​. Knight Frank's research indicates that a net worth of $4.4 million is required to be in the top 1% in America, a figure much higher than in countries like Japan, the U.K. and Australia​​.

Economic downturns, unexpected layoffs, or even personal circ*mstances can quickly disrupt the safety net of a single income. That's why creating multiple income streams is no longer a luxury, but a necessity for professionals seeking financial security and freedom.

% of Millionaire Households

As you can see, it's far more likely for a household with someone in their 50s or older to have a net worth exceeding $1 million versus households in their 20s and 30s. The median income for millionaire households is $215,000.