The Average Millionaire has 7️⃣ Different Income Streams
Investor · Houston, TX · Member since 2022 · 126 posts · 122 votes
The Average Millionaire has 7️⃣ Different Income Streams
Most Popular Reply
Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes
1yIs this based on some data regarding actual "millionaires" or is this just made up?
Also, what people do with wealth once they have it isn't necessarily how they made it to begin with
19 Replies
- Real Estate Agent · Toronto, ON (Canada) · Member since 2018 · 27 posts · 16 votes1y
Multiple streams of income are key to financial freedom. Here’s where I stand—and what I’m working toward:
Earned Income – The daily grind. It pays the bills, but true wealth is built elsewhere.
Business Income – As a realtor, this should be a major stream, but I haven’t closed a deal in a while. That needs to change, and it starts with improving my social and sales skills.
Dividend Income – Slowly growing. Small but compounding, and over time, it’ll become a reliable passive income stream.
Rental Income – My love. Real estate has always been my favorite asset class, and my focus is on scaling up strategically.
Time to Push Forward
I need to grow and enter new business opportunities—something I believe I’d be great at. But first, I need to connect with the right people and create more opportunities through better networking.
One small but meaningful step I’ve been slow to act on: finding a high-interest, highly liquid account to maximize idle cash.
Most Important Next Step (MINS)
I want to connect with people who could benefit from what I’ve learned. I don’t usually push this, but I’ve come a long way—when I think back to how little I knew as a beginner, I realize how valuable real-world experience is.
Beyond knowledge, I have the freedom to be boots on the ground—to make things happen in real estate, business, or investing. If you’re working on something interesting, let’s connect.
On the investing side, I’m exploring creative strategies to acquire more rentals and expand my portfolio. If you’re in the real estate game, I’d love to exchange ideas.
Capital Gains – I’ve made money here before, but as a buy-and-hold guy, I don’t sell often. Still, there are situations where it makes sense—I need to think more strategically.
Royalties & Licensing – A fascinating income stream that I need to learn more about. If you have insights, I’m all ears.
Long-term, I’ve had deep conversations (mostly with ChatGPT) about eco-friendly building and infrastructure projects. Huge goals, but I’m still figuring out how to bring them to life. If you’re in this space, let’s talk.
At the end of the day, the path to financial independence isn’t just about money—it’s about knowledge, execution, and connections.
If anything here resonates with you, let’s chat. Always looking to learn, share, and build.
- Investor · Houston, TX · Member since 2022 · 126 posts · 122 votes1y
Your mindset is exactly what's going to get you to your goals. The drive to diversify, scale, network and continuously improve. Keep your focus and you'll certainly achieve.
Happy to talk more and collaborate —whether it’s real estate strategies, investing insights, or creative ways to expand income streams. Cheers 🥂 to your success!
- Member since 2020 · 217 posts · 167 votes1y
1. Earned Income – Way to time consuming for the 'income made
2. Business Income – Also way to time consuming and a headache if you have employees. But you'll need a rental management company to handle your rentals, which might cost you an hour a week.
3. Dividend Income – Too risky, while you can average a reasonable return, you have to keep an eye on it and there will be downsides, perhaps big ones, like YESTERDAY.
4. Interest Income – Sure, you need a place to park your income before you spend it and lending it shore term, medium high interest works well.
5. Rental Income – Profits from real estate investments. Yep!
6. Capital Gains – Don't sell it if you have to pay tax on it. Work to get it in a Roth IRA so there's no tax
7. Royalties or Licensing Income – Royalties with mineral rights are great, but you need to own the land, not in a stock or bond.
I could argue that Diversify is not necessary. Keep all your eggs in the real estate arena, diversity would be having many income streams from the property your own. TIME is your most valuable asset so I would argue to limit your diversity so your time is spent with little management or work. Travel, having fun and goofing off are WAY more important.
How many different income streams are you building? One
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
RENTAL INCOME
Rent your money
Rent your expertise
Rent collected on hard assets
REnt collected from JV deals with others.
REnt collected from putting your Money and Expertise together to create value then sell.
- Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes1y
Is this based on some data regarding actual "millionaires" or is this just made up?
Also, what people do with wealth once they have it isn't necessarily how they made it to begin with
- Investor · Houston, TX · Member since 2022 · 126 posts · 122 votes1y
Quote from @Eric James:
Is this based on some data regarding actual "millionaires" or is this just made up?
Also, what people do with wealth once they have it isn't necessarily how they made it to begin with
No, it’s not made up. There has been research done on the topic and it’s just a common theme found from analyzing financial habits of wealthy individuals.
Quote from @Terra Padgett:
Quote from @Eric James:
Is this based on some data regarding actual "millionaires" or is this just made up?
Also, what people do with wealth once they have it isn't necessarily how they made it to begin with
No, it’s not made up. There has been research done on the topic and it’s just a common theme found from analyzing financial habits of wealthy individuals.
Can you provide the source? There are a lot of things that people believe is fact but are not. In sports the belief that the more times you beat a team the better chance the other team has to win. Statistically this is false even though it is believed by many people. there are countless other samples.
I used to see on this site that investing for cash flow was king. There were some of us that would point out that statistically that was not true. Today the sentiment on this site is very different than 5 years ago.- Investor · Houston, TX · Member since 2022 · 126 posts · 122 votes1y
Quote from @Dan H.:
Quote from @Terra Padgett:
Quote from @Eric James:
Is this based on some data regarding actual "millionaires" or is this just made up?
Also, what people do with wealth once they have it isn't necessarily how they made it to begin with
No, it’s not made up. There has been research done on the topic and it’s just a common theme found from analyzing financial habits of wealthy individuals.
Can you provide the source? There are a lot of things that people believe is fact but are not. In sports the belief that the more times you beat a team the better chance the other team has to win. Statistically this is false even though it is believed by many people. there are countless other samples.
I used to see on this site that investing for cash flow was king. There were some of us that would point out that statistically that was not true. Today the sentiment on this site is very different than 5 years ago.Research from the IRS, the Census Bureau, and studies on self-made millionaires. 7 streams is more of a guideline or general rule per se rather than a strict hard rule for every single millionaire. The key takeaway being that diversifying income is a common trait.
- Investor · Costa Mesa, CA · Member since 2016 · 1k+ posts · 1k+ votes1yTerra, considering that many people commenting on this thread ARE millionaires, I would bet that very few have 7 different streams of income. It sounds like a made up figure, and a poor investing strategy.
Quote from @Terra Padgett:
Quote from @Dan H.:
Quote from @Terra Padgett:
Quote from @Eric James:
Is this based on some data regarding actual "millionaires" or is this just made up?
Also, what people do with wealth once they have it isn't necessarily how they made it to begin with
No, it’s not made up. There has been research done on the topic and it’s just a common theme found from analyzing financial habits of wealthy individuals.
Can you provide the source? There are a lot of things that people believe is fact but are not. In sports the belief that the more times you beat a team the better chance the other team has to win. Statistically this is false even though it is believed by many people. there are countless other samples.
I used to see on this site that investing for cash flow was king. There were some of us that would point out that statistically that was not true. Today the sentiment on this site is very different than 5 years ago.Research from the IRS, the Census Bureau, and studies on self-made millionaires. 7 streams is more of a guideline or general rule per se rather than a strict hard rule for every single millionaire. The key takeaway being that diversifying income is a common trait.
- Investor · Houston, TX · Member since 2022 · 126 posts · 122 votes1y
I generate income from 6 out of the 7. Some deliver greater returns than others and carry a larger share of the load. However still multiple income sources. Again, not a hard and strict rule for every millionaire but certainly a common theme
Quote from @Terra Padgett:
1. Earned Income – Salary or wages from a job or business.
2. Business Income – Profits from owning a business.
3. Dividend Income – Earnings from stock investments.
4. Interest Income – Earnings from savings, bonds, or lending capital.
5. Rental Income – Profits from real estate investments.
6. Capital Gains – Money from selling assets like stocks, real estate, or businesses.
7. Royalties or Licensing Income – Earnings from intellectual property, books, patents, or franchises.
A key takeaway: Diversify. Having eggs in multiple baskets 🪺
How many different income streams are you building?Which ones?
This list is nonsense, 3, 4, 5 and 6 don't move the needle until you already have a lot of money. Even a high dividend stock like British tobacco, you need 100k to make 500/month. And number 7 is a spinoff of number 2. If you are trying to become rich, it's about increasing income without increasing spending so you can invest more. People become rich in one of two ways building their own business, building a real estate business, and for a select few having a very high income career. Succeeding in any of those requires that you don't diversify and instead focus heavily on the one thing that will make you rich. Then use diversification after you've become rich.
Quote from @Terra Padgett:
Quote from @Dan H.:
Quote from @Terra Padgett:
Quote from @Eric James:
Is this based on some data regarding actual "millionaires" or is this just made up?
Also, what people do with wealth once they have it isn't necessarily how they made it to begin with
No, it’s not made up. There has been research done on the topic and it’s just a common theme found from analyzing financial habits of wealthy individuals.
Can you provide the source? There are a lot of things that people believe is fact but are not. In sports the belief that the more times you beat a team the better chance the other team has to win. Statistically this is false even though it is believed by many people. there are countless other samples.
I used to see on this site that investing for cash flow was king. There were some of us that would point out that statistically that was not true. Today the sentiment on this site is very different than 5 years ago.Research from the IRS, the Census Bureau, and studies on self-made millionaires. 7 streams is more of a guideline or general rule per se rather than a strict hard rule for every single millionaire. The key takeaway being that diversifying income is a common trait.
The census bureau nor irs collect or releases that type of info. It is not in their responsibility. I use census data regularly (on virtually every underwriting) and am fairly familiar with their website.
I join the others that skeptical to your list unless you can provide a link to a half way reliable source showing the data. You may be simply passing on info you have heard somewhere, but that is NOT a reliable source
- Investor · Houston, TX · Member since 2022 · 126 posts · 122 votes1y
Quote from @Dan H.:
Quote from @Terra Padgett:
Quote from @Dan H.:
Quote from @Terra Padgett:
Quote from @Eric James:
Is this based on some data regarding actual "millionaires" or is this just made up?
Also, what people do with wealth once they have it isn't necessarily how they made it to begin with
No, it’s not made up. There has been research done on the topic and it’s just a common theme found from analyzing financial habits of wealthy individuals.
Can you provide the source? There are a lot of things that people believe is fact but are not. In sports the belief that the more times you beat a team the better chance the other team has to win. Statistically this is false even though it is believed by many people. there are countless other samples.
I used to see on this site that investing for cash flow was king. There were some of us that would point out that statistically that was not true. Today the sentiment on this site is very different than 5 years ago.Research from the IRS, the Census Bureau, and studies on self-made millionaires. 7 streams is more of a guideline or general rule per se rather than a strict hard rule for every single millionaire. The key takeaway being that diversifying income is a common trait.
The census bureau nor irs collect or releases that type of info. It is not in their responsibility. I use census data regularly (on virtually every underwriting) and am fairly familiar with their website.
I join the others that skeptical to your list unless you can provide a link to a half way reliable source showing the data. You may be simply passing on info you have heard somewhere, but that is NOT a reliable source
Both the IRS and the U.S. Census Bureau publish data on income sources and wealth distribution, but they don’t explicitly release reports stating, “Millionaires have seven income streams.” Instead, researchers analyze those datasets to draw these conclusions. You don’t have to agree or believe the trends. However many millionaires do, in fact, have multiple income streams.
Thank You for your comments and thoughts! Quote from @Terra Padgett:
Quote from @Dan H.:
Quote from @Terra Padgett:
Quote from @Dan H.:
Quote from @Terra Padgett:
Quote from @Eric James:
Is this based on some data regarding actual "millionaires" or is this just made up?
Also, what people do with wealth once they have it isn't necessarily how they made it to begin with
No, it’s not made up. There has been research done on the topic and it’s just a common theme found from analyzing financial habits of wealthy individuals.
Can you provide the source? There are a lot of things that people believe is fact but are not. In sports the belief that the more times you beat a team the better chance the other team has to win. Statistically this is false even though it is believed by many people. there are countless other samples.
I used to see on this site that investing for cash flow was king. There were some of us that would point out that statistically that was not true. Today the sentiment on this site is very different than 5 years ago.Research from the IRS, the Census Bureau, and studies on self-made millionaires. 7 streams is more of a guideline or general rule per se rather than a strict hard rule for every single millionaire. The key takeaway being that diversifying income is a common trait.
The census bureau nor irs collect or releases that type of info. It is not in their responsibility. I use census data regularly (on virtually every underwriting) and am fairly familiar with their website.
I join the others that skeptical to your list unless you can provide a link to a half way reliable source showing the data. You may be simply passing on info you have heard somewhere, but that is NOT a reliable source
Both the IRS and the U.S. Census Bureau publish data on income sources and wealth distribution, but they don’t explicitly release reports stating, “Millionaires have seven income streams.” Instead, researchers analyze those datasets to draw these conclusions. You don’t have to agree or believe the trends. However many millionaires do, in fact, have multiple income streams.
Thank You for your comments and thoughts!When you have been asked to provide a link to a single reputable source of one of these “researchers” you have failed repeatedly to provide the source. I believe your post is Bs. It may be someone’s view, but not a view from a reputable source.
Show that I am incorrect and post a reputable source. Otherwise realize this is only someone’s opinion with no research to support it (which is my belief and various other posts).
- Member since 2024 · 110 posts · 56 votes1y
The 7 streams myth has been repeatedly debunked. This study shows that it's actually 3 streams: https://www.entrepreneur.com/leadership/grow-your-wealth-wit...
There's a lot of misconception regarding who is and isn't getting to $1M (which isn't even that much in today's money.) I highly recommend reading Dave Ramsey's Study on Millionaires. This was a study done by surveying 10,000 millionaires that were considered to be representative of the US population. The majority of them got to $1M by slow and steady investing (401K) and living under their means and are the "millionaire next door" type.
High income earners don't always have high net wealth as they feel pressured to spend and live a certain lifetyle. Teachers are in the top 5 professions most likely to be millionaires. No one expects them to go on lavish vacations or drive fancy sports cars so they can quietly invest instead.
- Member since 2020 · 217 posts · 167 votes1y
It's hard to figure out what the income streams of millionaires are, most of us don't know who the millionaires are. Read the book "the Neighbor Next Door". They don't have lavish lifestyles, fancy cars or big homes. They drive average cars and nothing fancy about them, but there's some that are worth several million. Most did not make it with a W2 income, but you can.
If you're in your late 30s you should be half way there, late 50s you should be worth $1MM, and if not, you're below average. If you're in your 20s and 30s and just buy a house a year, (not slums) you should hit 1MM in 10 years, keep it up and you can imagine where you can be later in life. And that's only in real estate. And that's from only real estate and your W2 job, if you have one. Get rid of the job and you can do better, unless your W2 is at the high earner level.
So, no, you don't need multiple income streams to be a millionaire. The IRS and/census, or any part of the government does NOT know your net worth, only you do.
- Member since 2024 · 222 posts · 161 votes1y
Over My lifetime I certainly have used various income streams some of which I continue.
The primary vehicle is real estate which is my business income and other streams are incidental.
Join the conversationCreate a free account to reply, vote on answers and follow this thread.