income streams in business plan

• Real-time data and analysis
• Collaborate and share
• Centralized Budgeting
• Forecast revenue
• Create multiple scenarios
• Automated hiring planning
• Plan for fundraising
• Founders and Small Businesses
• Mid-Sized Businesses

Downloadables

Help Center

Financial Modeling

Fundraising

Founder Story

7 Revenue Stream Examples (How to Pick the Right One)

There are a ton of ways to generate revenue, and modern organizations have plenty of choice when it comes to determining how they’re going to drive cash into the business .

While most businesses will have just a single revenue stream it’s entirely possible to drive revenue from multiple streams.

And, while the revenue model you choose will be largely driven by the business model you’re operating under, as you’ll see shortly, many of these revenue streams can serve multiple types of business.

The key, as always, is to determine what works for your customers and your market. Choose the wrong revenue model, and you might fail to convince many customers to get on board, despite offering an excellent product or service.

In this article, we’re going to explore seven of the most commonly adopted revenue streams.

We’ll look at examples of those streams in action, and walk through some tips on how to choose the right revenue stream (or streams) for your company.

Table of Contents

 What is a Revenue Stream?

A revenue stream is the lifeblood of any business. It’s where your cash comes from.

Before you can have a revenue stream, your company needs assets. But you can generate revenue in several ways using the same asset.

For example, let’s say you own two cars. These cars are your assets, and you want to generate revenue from them. Several income streams are available to you. You could:

• Sell one car
• Rent the cars to people, either by the hour or by the day
• Provide a taxi service using the cars
• Offer advertising space on your cars

That’s four different revenue streams from two assets.

Of course, you can have more than one asset to generate your revenue streams. A business can have a SaaS as their main source of revenue, but the talent on their team is another asset they can use to provide services, as we’ll discuss later.

How Many Revenue Streams Should a Business Have?

While some businesses maintain just a single revenue stream for their entire lifespan, diversification is generally a good idea.

As an early-stage company , you may only be able to manage one revenue stream at first. But the sooner you diversify your business, the safer it will be.

If your only revenue stream dries up, your cash runway will start to shorten until you get back on track. On the other hand, if you have at least two to three revenue streams, you can offset the drop in revenue from a dried-up stream.

Amazon is probably one of the biggest examples of a company with several revenue streams. Here are just some of their revenue streams:

• E-commerce sales
• Amazon Prime subscription
• Amazon Music
• Prime Video
• Audible memberships

You don’t have to be the size of Amazon to have multiple revenue streams though. Look at Icons8, a site that sells clipart, illustrations, and music. They have several revenue streams, including:

• Memberships
• Licensing for their icons/illustrations
• Graphic design software subscription
• Dataset sales

Hubspot, Salesforce, and Shopify are also examples of companies that have used multiple revenue streams to fuel their growth.

7 Types of Revenue Streams You Can Implement For Your Business

Let’s take a look at what types of revenue streams you can use for your company, as well as the pros and cons of each.

1. Subscriptions

The subscription model is popular within the software world. In fact, today, the majority of software companies sell their products as SaaS (software as a service) subscriptions.

Customers pay you a recurring subscription fee (monthly, quarterly, or yearly) to get access to a product or service.

Instead of owning a product or paying once for a service, customers get access as long as they continue paying their subscription fee.

Of course, there are other types of businesses that use the subscription revenue model (magazines and gyms are two classic examples).

Pros of the subscription model include:

• If you can forecast your customer churn rate and new MRR, you can predict how much revenue your business will generate next month (you can do this with Finmark from BILL )
• If your marketing efforts slow down or stop, you can still generate revenue from existing subscribers
• Subscriptions are lower risk than upfront purchases for customers, which makes it easier to close sales

However, there are important cons to keep in mind:

• If your CAC payback period is longer than the average period customers stay around for, your business will bleed money
• You need to invest resources to avoid high cancellation rates
• Revenue can be uncertain during the startup phase

Examples of businesses that use subscriptions as a revenue stream include:

• Streaming services like Netflix
• SaaS companies like Finmark
• Membership companies like country clubs
• Subscription box companies like BarkBox
• Ecommerce companies like Dollar Shave Club

2. Licensing

Licensing comes in different shapes and forms. In software, licensing was the most popular revenue stream before the subscription model took over.

One example of a software company that still uses perpetual licensing is Microsoft. Although they offer their products on a subscription basis, you can still purchase licenses for their products outright, like Microsoft Word.

But software isn’t the only thing you can license. You can also grant the right for someone else to use a trademark or copyrighted material.

Other examples of businesses that use a licensing model include:

• Walt Disney (for example, when they grant McDonald’s a license to use trademarked characters for Happy Meal toys)
• Music production companies grant licenses to film production crews to use specific songs in movies
• Software like Clip Studio Paint

Here are the pros of using licenses as a revenue stream:

• You don’t need to worry about monthly churn since licenses are typically granted long term
• Your business gets more money upfront from purchases

But here are the cons:

• Customers only buy once, unless you create a new and improved product for them to purchase a few years later
• Your revenue will dip to zero if you make no sales in a month

3. Product Sales

Product sales is exactly what it sounds like — selling products. Unlike licensing, customers who purchase products own the product outright.

This is the quintessential consumer-facing business model, and is the main way businesses monetize when they have a physical product to sell.

E-commerce companies are one of the best examples of this revenue stream. Brick and mortar retail companies do the same. Some examples include:

Some companies do a blend of both.

For example, Google offers paid software like GSuite, but they also sell physical electronics like the Google Pixel phones, the Google Chromecast, and the Google Nest smart home products. We’ll talk more later about how successful companies diversify by combining multiple revenue streams.

Here are the pros of having product sales as a revenue stream:

• Low ticket items are easier to sell
• Higher ticket items provide a large influx of revenue at once

But here’s the negative side you should be aware of:

• Products tend to have lower profit margins than software
• Every product needs to be manufactured, stored, and shipped
• It can become cheaper to manufacture products as you scale up, but there is a limit to how cheap you can make it

4. Services and Consulting

If you have talent on your team—whether that’s you or your employees—you have an asset that you can leverage in the form of services or consulting.

Some companies are purely service-based and offer several services, which each represent a separate income stream. Local companies like nail salons or landscaping companies are good examples of this model.

Other examples include:

• Marketing agencies and consultants
• Financial advisors
• Building inspectors

Some other companies provide software, like Evolv.ai with A/B testing, but also provide services to strategize and implement their solution.

Services are a great way to add a new income stream without creating assets from scratch.

There’s no need to invest in research and development for a new product.

You can survey your customers to figure out what services they need, then use your existing in-house expertise to deliver this service.

Services offer several benefits:

• Because services are one-to-one instead of one-to-many, you can also charge more, which means you need fewer clients to reach a certain revenue goal
• For example, let’s say you need to increase your revenue by $50,000 a month — you only need five clients who pay $10,000 each for high-value consulting services compared to 1,000 clients who pay $50 a month for a software subscription

However, here are some cons to watch out for:

• Services aren’t easily scalable — if you want to onboard more clients, you’ll not only need to scale your marketing efforts, but you’ll also need to train and onboard more employees to provide these services
• There are more moving pieces to services than to software subscriptions — for example, customer services need to be much more involved
• You’re more responsible for the outcomes your clients get when you provide a service compared to a product or subscription

5. Advertising

If you have an audience, you also have the ability to sell advertising space.

This can be done in a variety of ways.

For example, let’s say you have a podcast in addition to the existing products and services you sell. You can create ad breaks in your podcast and sell the space to relevant companies.

This is how most podcasts and radio stations make money.

If you have an email list, you can also partner with other brands to advertise their products or services to your subscribers. Or, if you have a blog that generates a lot of traffic, you can place ads in your posts, too.

Then there’s the freemium model for apps. Freemium is where your company offers a “dumbed down” free version of your software product.

In the B2B space, it’s more common to use your free plan as a launching pad to upsell customers into a paid subscription. In the B2C world, though, it’s super common to monetize free users with ad revenue (running ads within the app interface itself).

Duolingo is a classic example of a freemium app that utilizes an ad revenue stream.

Examples of businesses that use the advertising model include:

• The Penny Hoarder and other large blogs
• Sports stadiums that sell space for advertising in their arena
• Real estate owners who put banners on their buildings

Some pros of selling advertising space include:

• It doesn’t require you to spend extra resources to turn on this revenue stream
• Ads can be highly lucrative if you have a large audience

But watch out for these cons:

• You’ll be associated with the brands you advertise, so it’s important to choose your partners wisely
• It may not bring in much if your audience is small
• Ads can distract your audience from your own offers

 6. Leasing and Renting

When you use leasing and renting as a revenue stream, you give exclusive usage rights to the buyer for a specific period of time.

You typically need assets to rent out in order for this model to work for you. For example, E-commerce companies like Rent the Runway allow members to rent out designer clothing.

Businesses like these often have other revenue streams, such as subscription fees and product sales (since people can opt to buy the products, too).

Car rental companies and hotels work in the same way.

Other examples of leasing and renting companies include:

• Moving gear rental companies
• Vacation rentals
• Real estate leasing companies

If you’re a company with a large office space, you could even lease unused parts of your office space to smaller companies or freelancers.

Let’s explore the pros of leasing and renting:

• You can generate a high amount of revenue from a single asset over time
• Customers don’t need to justify long-term purchases, so it can be easier to make sales

But there are some cons to the model, too:

• It can take a while to make your money back after investing in your assets
• You need to account for depreciation of your assets
• Wear and tear will likely happen over time

7. Brokerage Fees

Companies get paid a brokerage fee when they match people with specific companies.

For example, freelancing websites like Upwork make money from matching freelancers with clients who need their help. Twenty percent of the money a client pays for freelance services is taken as a brokerage fee.

Freelancers benefit because they get matched with clients, and clients win because they get access to thousands of talented professionals.

Other businesses that use a brokerage model include:

• Booking.com

Here’s how your business can benefit from using a brokerage model:

• Once your company has the ability to match people together, it can become a relatively low-effort revenue stream, since it doesn’t require you to deliver products or services
• Customers don’t have to pay upfront — you usually take cuts from their transactions — which means that there can be less friction for sales

However, there are downsides to using brokerage fees as a revenue stream:

• It’s not easy to set up — most companies who depend on other revenue streams won’t easily be able to add brokerage fees as a revenue source without investing some serious time and resources into it
• Brokerage fees are only typical in a few industries

How to Choose the Right Revenue Stream

With all these revenue streams to choose from, which one is the best for your organization?

Well, it’s largely going to be driven by the kind of product you have. If you have a software platform, renting and leasing probably isn’t going to be a suitable option.

However, you do have some leeway to choose here. For example, it’s possible to sell software on a perpetual license or subscription basis, or make it completely free but monetize using ad revenue.

Here are a few steps to follow when determining which revenue steam makes sense for your business.

1. Check Out What Your Competitors Are Doing

A good competitor analysis is always an important step in figuring out how you present your business to the market. It’s equally important to determine what revenue streams are appropriate.

Of course, the idea isn’t simply to copy what your competitors are doing, but this analysis can be used to get an idea of what payment models customers in this vertical are comfortable with.

Alternatively, it can be used as a way of differentiating.

If all of your competitors are charging on a subscription basis, for example, you might decide to differentiate by offering your product for free and monetizing through an ad revenue stream.

2. Ask The Market

One step better than using competitor analysis to assess the market is to literally ask your customers themselves.

A survey can be a great simple way to collect some quantitative data, like how much customers would be willing to pay for given features.

Then, you can supplement this with qualitative insights from customer interviews. For instance, you might ask about how ads impact their in-app experience.

3. Audit Your Current Skill Sets

Remember: you can only drive revenue based on the assets you have.

One of your most important assets, of course, is your team, meaning you should audit the skills you already have internally to see what additional revenue streams you could take advantage of.

For example, say you sell an API platform on a subscription basis.

You find that you have relevant expertise on the development team to offer a service where you help customers set up custom integrations using your tool, adding another revenue stream to your belt.

4. Consider Future Trends

Yes, considering the market as it stands today is important: those are the customers to whom you’ll be selling.

But you should also take note of how the market as a whole is developing and what it will look like in the long term. Your plan is to be in business then as well, remember.

Take, for example, the car industry.

Consumers are moving away from outright ownership and toward subscription models, which is already evident in the software world but beginning to break into physical products as well.

A car dealership may do well to consider renting out their vehicles on a subscription basis rather than exclusively selling them.

5. Don’t Be Afraid To Diversify

Lastly, continue to bear in mind that you don’t have to choose just a single revenue stream.

Many businesses fall into this trap; they choose one option and put all of their eggs into one basket.

However, many of the most successful organizations diversify and use multiple revenue streams to protect against market fluctuations, and to maximize their opportunities to capture share of wallet.

In the next section, we’ll take a look at some well-known organizations who leverage several revenue streams for this very reason.

Examples Of Businesses With Multiple Revenue Streams

We’ve already explored how a giant like Amazon uses multiple revenue streams to diversify its income and protect against market fluctuations.

But you don’t have to be a massive international enterprise to take advantage of multiple income streams. Here are a few great examples of companies that excel today with multiple sources of revenue:

• Dollar Shave Club . DSC uses the subscription model as their primary source of recurring revenue, but also sells on an individual basis in their e-commerce store, taking advantage of the product sales model as an additional revenue stream (and likely using this to convert subscription customers)
• Zylo . Zylo is a SaaS buying and visibility platform, meaning they operate on a subscription model. However, they also offer managed services, diversifying their income with a secondary service revenue stream.
• Duolingo . Duolingo is a language learning app that monetizes its free app using ad revenue, but also offers a paid subscription option, diversifying its income with two separate revenue streams.

Diversify Your Company’s Revenue Streams to Make It More Resilient

If your business currently has a single revenue stream, consider adding one or two more to the mix. This will help your company become more resilient to change.

For example, if the market suddenly shifts and one of your revenue streams dries up, you’ll still have other sources of revenue to keep your business afloat while you pivot.

As a final thought, don’t get too carried away with adding all the income streams to your business, though. Make sure your new sources of revenue are still in line with your vision and don’t distract from your purpose.

This content is presented “as is,” and is not intended to provide tax, legal or financial advice. Please consult your advisor with any questions.

Subscribe to the Finmark Blog

Historically financial modeling has been hard, complicated, and inaccurate. But financials are the lifeblood of any company. They’re too important to be ignored or outsourced. They should be a core part of every founder’s job. This doesn’t have to be scary. And you don’t have to do it alone. The Finmark Blog is here to educate founders on key financial metrics, startup best practices, and everything else to give you the confidence to drive your business forward.

You can unsubscribe at any time.

By continuing, you agree to Finmark Terms of Service and Privacy Notice .

Other articles you might be interested in...

Scenario planning and sharing: endless possibilities, effortless collaboration, balance sheet forecasting: a guide for beginners, direct vs indirect cash flow methods: pros, cons, and differences.

8 revenue stream examples for your business

The coronavirus pandemic has emphasized the need to diversify revenue streams. Having all your eggs in one basket and depending on one single revenue stream can be risky, especially in the current climate. While you already have your revenue stream, there are ways to identify new opportunities and diversify your income. 

If you can tap into different ways to generate revenue, you can keep your income flowing and put your business in a more secure position going forward. By understanding the revenue streams available, you can dive deep into your business to identify opportunities to make money.

In this article, we’re going to look at how you can target new customers, create new revenue streams and stay ahead of the competition. 

• What is a revenue stream? 
• The importance of revenue streams 
• How to choose the right type of revenue stream for your business 
• 8 revenue stream examples

What is a revenue stream? 

​​Revenue streams are sources where your business generates money. The sources of income vary depending on your type of business. A revenue stream is not a business model, but it does influence your business model and decisions. Here’s a breakdown of the difference between a business model, revenue stream, and revenue model: 

• Revenue stream – the source of your company’s income 
• Revenue model – the strategy of managing the revenue streams 
• Business models – the structure of the company including your revenue model and streams and how everything works together 

Often, when talking about revenue streams, these three terms are used a lot and it’s easy to confuse them. A business can have a single or multiple revenue streams, depending on the business model. When you’re looking at your revenue model, you’re diving deeper into elements like price and your value offering. Your business model takes everything into account, including your revenue streams and model. It’s a way of optimizing your business so that all elements work together to maximize profits. 

An example of a company that has multiple revenue streams is the apparel brand, Lululmeon. First, they have eCommerce and digital sales. But, they also sell wholesale products to health clubs, gyms, and fitness centers to increase brand image. Other streams of revenue include sales from temporary shop locations and showrooms. The brand has also branched out into the home fitness world with the Lululemon Mirror, after buying the fitness startup Mirror last year for $500 million.  

The importance of revenue streams 

Naturally, revenue streams are important because you need an income. It’s no surprise that revenue streams are essential, but they do more than just generate money for your business. You can use revenue streams as a way to evaluate performance across different areas of the business. For any business, revenue is a key performance indicator (KPI). 

By having a clear understanding of your revenue streams, you can track patterns and generate revenue projections across the business. If you can spot changes, trends, or dips in income, you can identify the cause and find out where you need to spend more time. Through a good understanding of the different types of revenue streams, you can identify opportunities to make more money. 

There is a clear need to diversify revenue streams to help reduce risk in an economic downturn. Advances in technology and a shift to digital transformation across most industries mean that there are new ways to diversify your current products and portfolio. From adding a subscription service to offering online workshops and training for customers, you can diversify revenue streams to target new customer segments.

How to choose the right type of revenue stream for your business 

As a startup, you may have to rely on one single source of revenue. But, the quicker you can diversify your revenue streams, the safer your business will be in the long run. Because if your one revenue stream dries up, your business could be in trouble. One of the biggest examples of a company that uses multiple revenue streams to drive growth is Amazon. The online retailer has eCommerce sales, Prime subscription, Amazon Music, AWS, and audible memberships. Of course, you don’t have to be a massive company like Amazon to develop multiple revenue streams. 

The best revenue streams for your business depend on your assets, who your customers are, and your current main source of income. With various types of revenue models and streams available, the right revenue streams can differ. At a high level, a company can generate revenue from transactional revenue from a one-off payment like sales or through recurring revenue like a subscription. 

Here are three factors to consider when choosing your revenue stream: 

• Value proposition – your revenue stream should connect with your value proposition. The value that your product or service delivers should align with your revenue streams. 
• The market – your customer base and market fit will determine your revenue streams. If you target individual customers, a subscription service would make sense. But if you’re a software company, then licensing your service could be more suitable. 
• Competitors – analyze how your competition generates revenue. You can study their strategies, mistakes, and wins to help you determine your own revenue streams. 

A useful tool to help you understand your business model is the Business Model Canvas (BMC). It helps you to visualize and assess your business model and capture value. A BMC includes elements like value proposition, revenue streams, customer segments, and channels to connect the building blocks of your business. Every value proposition should connect with a revenue stream and customer segment. By evaluating your business model as a whole, you can determine the most suitable revenue streams for your business. 

8 revenue stream examples 

There are several ways businesses can make money. Typically, there are pros and cons to each type of revenue stream. Depending on your value proposition and customers, one revenue stream may be more suitable for you than another. Here are eight examples of revenue streams that represent broad categories of ways your business can make money. 

1. Asset sale 

Asset sale or selling assets is one of the most mainstream ways that businesses make money across multiple industries. Your business sells something and then your customers own it. An asset sale also occurs when a business owner sells their company. Usually, it’s a one-off transaction sale. Once the sale is complete, typically, a customer can use the product, resell or even destroy it as they own the asset. The sale of a physical product generates revenue for the business. 

The Customer Engagement Playbook for Your Fitness Business

2. usage fees .

Usage fees are how much a company charges to use its service. The customer pays you based on the amount they use the service. For example, a phone company charges customers for a certain number of minutes and data. Typically, customers pay a monthly fee to access phone service. Another good example is a car rental. The customer pays a car rental company to rent a car for how many miles they travel. A postal carrier charges you to deliver a parcel from one location to another. Essentially, with usage fees, the more customers use a service, the more they pay. 

3. Leasing and renting 

This revenue stream is built around customers using a temporary item for a fixed amount of time. For this, you’re giving customers exclusive use of an asset for a specific amount of time. Examples of businesses that use this revenue stream are Airbnb or car rental companies. 

Another example of this revenue stream is Rent the Runway, which allows members to rent designer clothes for a specific period of time. The designer rental brand offers both a monthly subscription membership and one-off rentals to customers. Memberships start at $135/month and give users access to up to eight items per month. You can see how they are tapping into multiple revenue streams to develop both recurring revenue and transaction revenue from one-off rental purchases. 

4. Advertising fees 

Advertising fees are a revenue stream where you make money by charging to showcase a product, service, or brand on your online or offline company assets. Essentially anywhere you charge a fee to advertise and promote another business. An advertising-based revenue stream is often used by businesses that have websites that attract a lot of traffic. You generate revenue by selling ad space. 

The benefit of this is that if you have a high-traffic space, online or offline, you can monetize it relatively instantly. The downside is that adverts are everywhere nowadays and you want to consider if you want to distract your customers with an advert. Examples of advertising revenue include incorporating Google Adsense on your website or adverts on your podcast or YouTube channel. 

5. Subscription fees 

Many businesses utilize a subscription-based revenue stream. Revenue is generated through customers paying for ongoing access to a service. Examples of companies that use subscription fees are Netflix, Shopify, Adobe as well as gym memberships, and fitness studios.

 In general, these types of revenue streams tend to be lower monthly amounts so customers continue to pay as it’s something you can easily forget about. As a subscription, customers pay a recurring fee to access a service. Other businesses that use this revenue stream are subscription boxes and some eCommerce companies. 

6. Licensing 

Licensing usually involves one-time customer payments that give a single user or group of users access to a software product. While the owner keeps the copyright, the third party can use the content for free. In the last few years, we’ve seen some major players move away from the licensing model to a subscription-based format. 

Companies like Adobe and Microsoft have moved a lot of products to subscription services. But licensing is still a popular option in photography, music, and video games where customers pay to use and access content, while the owner still retains the ownership rights. 

7. Brokerage fees 

When companies match people with a certain service, they can receive a brokerage fee. In a traditional sense, real estate agents and real estate brokers match people with property and receive a brokerage fee. Other examples of businesses that take brokerage fees are Uber, Booking.com, and Airbnb. They all take a fee matching customers to service. 

The benefit of this revenue stream is that you don’t have to deliver the product or service, you simply match the customer with the right business or service. The downside is that this sort of revenue stream really only applies to certain businesses and it takes a lot of time and effort to set up. Any business that acts as an intermediary takes a percentage fee for its services. 

8. Consulting or services 

The people on your team are also an asset. An asset doesn’t have to be a physical item. You can leverage your team in the form of consulting or services. Examples of this include financial advisors and marketing agencies or consultants. These types of businesses can include both retainer and project work. 

Retainer work is similar to a subscription setup where customers would pay a certain amount each month for a specific service. Offering services or consulting is a good way to create a revenue stream without creating brand new assets or developing a new product. 

In summary 

The right revenue stream for your business depends on your value proposition, customers, and your main source of income. While some revenue streams may not be relevant for your business, others could be opportunities to diversify your income and increase future stability. 

A great additional revenue stream is one that doesn’t add too much complexity to your current business model. By evaluating your current assets and surveying your existing customers, you can look to identify a new business revenue stream to expand your company. 

Eamonn Curley

Related articles.

How to start a spin studio in 2021

How to become a franchisor in fitness

The rise of corporate fitness

Grow revenue 89% and streamline your

• Privacy Overview
• Strictly Necessary Cookies
• 3rd Party Cookies

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

This website uses Google Analytics to collect anonymous information such as the number of visitors to the site, and the most popular pages.

Keeping this cookie enabled helps us to improve our website.

Please enable Strictly Necessary Cookies first so that we can save your preferences!

We empower you to boost your business

"I think Glofox speaks to lots of different fitness businesses. I looked at a few options, but the Glofox positioning was more flexible. Without it the business wouldn't be scaleable”

Trusted by studios, and global gym chains.

Revenue Streams: Overview, Types, and Examples

• 14 Sep, 2023
• No comments Share

What are revenue streams?

• a business model is a broader concept describing how a company creates, delivers, and captures value, while
• a revenue model, being part of the business model, is a plan that shows how the company is going to generate income. A revenue model defines revenue streams.

Revenue models in the software business

Okay, let’s get back to revenue streams. A diversified mixture of income sources makes a company more stable and resilient, especially when the market, customer preferences, and economic conditions are changing. Even if one revenue stream suffers a negative impact, chances are that the others can still generate income. And although multiple revenue streams require more management effort, diversification always presents additional opportunities. A well-known example from the world of big tech is Microsoft, whose revenue comes from a variety of sources, including Office products and services, Azure and other cloud services, gaming, search advertising, and more. Another shining example of diversifying revenue streams is Amazon, which earns from online stores, third-party seller services, AWS, advertising, etc. We’ll talk more about diversification in one of the next sections, so bear with us a bit. So let’s see the main types of revenue streams that you can implement in your business.

Revenue stream types and examples

All revenue can be generally divided into operating and nonoperating. Operating revenue is generated by the company's primary business activities, while nonoperating revenue comes from other sources and usually includes interest revenue, dividend revenue, and so on. Operating revenue streams can then be divided into two fairly broad groups: recurring and non-recurring (or single-payment). The latter can be further subcategorized into transaction, project-based, and service-based revenue streams. We’ll describe them one by one.

Revenue stream types

Recurring revenue streams

The main revenue streams for: Netflix, Google Ads, Amazon Web Services, PayPal As the name suggests, the payments within a recurring revenue stream are ongoing or coming in on a regular basis. Those are typically fees for some continuing services, including the following. Subscriptions and memberships – charging a recurring fee for access to a product or service. Some examples are regular merchandise delivery (e.g., magazines, beauty products, meals, etc.), gym passes, streaming video services, online storage space, and so on. Renting, leasing, or lending – allowing customers to temporarily use your assets for a fee, e.g., renting out apartments or leasing vehicles. Brokerage – getting a commission from transactions settled with you as an intermediary, as freight brokers or payment gateway providers do. Advertising – selling advertising space on either online platforms or offline media resources. Affiliate marketing – promoting other products or resources or referring customers to them for a fee or commission. Even though any of these revenue types can be single-payment or canceled at any time, they mostly imply generating a fairly consistent income flow. That’s why recurring revenue streams are usually the most stable, predictable, and manageable.

Transaction revenue streams

The main revenue stream for: Walmart, Ford, American Airlines, Starbucks, Uber This type is considered the most common one as this revenue stream is generated by sales operations. If you sell any goods or services on a single-time basis, that’s a transaction revenue stream. Most retail, wholesale, and eCommerce businesses rely on this type of revenue stream. This group also includes companies that provide single-time services (from haircuts to plumbing to flights to software licenses).

Service-based revenue streams

The main revenue stream for: Accenture, PwC, Deloitte, McKinsey In this case, the fee for services rendered is calculated on an hourly basis. All advisory and consulting firms (in such areas as finance, law, taxes, etc.) fall under this category. So do virtual assistants, therapists, coaches, and other specialists who basically sell their time. Note that often, such services are provided on a regular basis. If a defined amount of work for a fixed fee is charged on an ongoing basis, then such revenue can be considered recurring.

Project-based revenue streams

The main revenue stream for: Bechtel, Epam, Gartner Here, revenue is generated upon successful completion of the entire project. If the project is lengthy, there can be several transactions, which are usually connected to specific milestones. Industries that mainly operate on project-based revenue streams are construction, website or software development, event planning , interior/exterior design, marketing, research, and so on.

Revenue stream diversification examples

As we said above, diversification is the key to stability, so now we’ll look at how some of the world’s biggest companies expanded their revenue stream portfolios to increase customer reach and drive profit.

Walmart revenue streams: not only retail

The well-known retail giant we started this post about turns out to have a variety of revenue streams. The company itself divides its operations into three major reportable segments: Walmart US, Walmart International, and Sam's Club. However, in terms of revenue models and streams, we can single out the following. Transaction-based revenue includes

• in-store sales – Walmart operates 10,500+ stores and clubs in 20+ countries, serving 230 million customers annually;
• eCommerce sales – Walmart sells merchandise online from both retail brands and Sam’s Club; and
• fulfillment fees – Walmart offers storage and fulfillment services to merchants who sell on the Walmart Marketplace platform.

Recurring revenue includes

• membership fees – Walmart Plus membership provides benefits like unlimited free delivery, fuel discounts, early access to product deals, and more for $98/year, while Sam’s Club is a membership-only warehouse club with two plans of either $50 or $110 annually; and
• advertising – Walmart Connect is a platform that brands can use to promote their products through various channels, including online, in-store, and sponsored media across the web.

Walmart still makes more than half of its money from selling groceries, but it doesn’t rely only on retail sales as it did before. It managed to build an entire ecosystem of various services around such a simple thing as selling cheap, everyday merchandise to lower-income shoppers.

Apple revenue streams: not only iPhones

Of course, we can’t bypass the largest company in the world in terms of market capitalization (as of today, Apple is worth around $3 trillion). What started off as a small personal computer manufacturer in the late 1970s has now become a multinational giant generating revenue from

• sales of devices, including iPhones, iPads, AirPods, wearables, accessories, etc.;
• advertising in the App Store and Apple News app;
• commissions on paid apps and in-app purchases;
• subscriptions to its numerous services such as iCloud+, Apple TV, Apple Music, etc.; and
• payment service fees through the Apple Card credit card and the Apple Pay processing platform.

Apple’s 12-month revenue as of June 2023 is $383.933 billion , and even though iPhone sales account for more than 50 percent of the company’s revenue, the share of other segments keeps growing.

Tesla revenue streams: not only cars

Tesla is the world’s biggest electric vehicle producer, having grown to a compound 12-month revenue of $ 94.02 billion . It has sold over 4.5 billion vehicles since its founding in 2008, and EV sales (together with charging accessories and related software) are still its main source of income. But not the only one. Tesla also develops other business directions, namely

• energy generation and storage,
• auto leasing,
• regulatory credits, and
• other services (parts, paid Supercharging, vehicle insurance, etc.).

In addition, Tesla heavily invests in R&D and is now earning its place as a player in the AI and tech market. It currently develops its own autonomous robots, chips, supercomputers, neural networks, and so on – all of which have the potential to become other significant revenue streams for the company.

TripAdvisor revenue streams: not only advertising

If we look closely at the biggest free travel review website in the world, we’ll see that it has multiple revenue streams that together have already generated $ 1.67 billion in 2023:

• advertising and Sponsored Placement fees,
• subscription fees from the TripAdvisor Plus membership program, and
• commission and booking fees from host listings.

And it’s not only TripAdvisor itself that makes a profit but also its diverse portfolio of subsidiaries that operate on various business models, including Bokun.io, Viator, Cruise Critic, FlipKey, TheFork, and others.

How to manage revenue streams?

Depending on your stage of business development, you probably either need to plan on your revenue streams, create them, or monitor their performance.

Defining revenue streams

If we look at the widely used Business Model Canvas introduced in 2010 in the book Business Model Generation , we’ll see that revenue streams must be formulated as one of the nine building blocks of the entire business strategy. Feel free to use our online Business Model Canvas Template to formulate your own business ideas and organize all the essential components. We also have a detailed explainer on how to approach and fill out the BMC .

Classic Business Model Canvas

To start identifying revenue streams, you have to define your target customer groups, their needs, and the value proposition for each of them – since each customer segment typically generates a separate revenue flow. Based on that understanding, you can ascertain the main revenue-related factors. Revenue model . Which revenue model type to implement? Pricing strategy . How to approach pricing? Should it be fixed or dynamic ? Should you set prices based on demand , value, or competition ? Can you afford to offer discounts, free trials, buy now pay later programs, delayed payments, or other incentivizing methods that will impact your bottom line? Willingness to pay . Will your customers pay the price you set? What’s the maximum price your customers will pay for your product or service? What can encourage them to pay more? Payment channels . Online or offline? Cash, card, bank transfers, digital wallets, or other payment methods? To answer all these questions, you’ll have to conduct thorough, in-depth market research and find out what your competitors offer, at what price, and what your target customers think about the current state of things. Only after detailing your revenue streams will you understand what revenues to expect, their certainty and potential cyclicality, as well as possible ways to maximize them.

Creating revenue streams

There’s no one scenario that will work perfectly for every business in any industry. But the general algorithm for creating revenue streams coincides with the BMC in many aspects:

• Identify your target customers and their needs.
• Develop a value proposition for your products or services that addresses the needs of the specific customer segment you defined.
• Research your competition and their offerings to evaluate market opportunities and potential profitability.
• Calculate your costs and define pricing for your products or services.
• Launch new products or services.
• Monitor performance and market conditions closely and adjust as needed.

Diversifying your revenue streams will increase stability, so once you’ve established your main workflows, think about expanding your income portfolio.

Monitoring revenue streams

Revenue management suggests a number of KPIs that you can monitor in any industry to understand how your revenue streams are performing. Here are some of them:

• Gross revenue,
• Net revenue,
• Revenue growth rate,
• Average revenue per customer/user,
• Average transaction value,
• Customer lifetime value (CLTV),
• Churn rate,
• Customer acquisition cost (CAC),
• Sales Conversion Rate, etc.

Obviously, any industry also has its own metrics to monitor cash flows. For example, the main revenue-related KPIs in hospitality include Revenue per available room (RevPAR), Total revenue per available room (TRevPAR), Revenue per available customer (RevPAC), and so on. Read about these and other hotel KPIs in our dedicated post. Analyzing your revenue streams will help you better understand your business, evaluate its financial health, define weaknesses and opportunities, and make more accurate forecasts.

Revenue streams: Business Model Canvas Explained

The Business Model Canvas is a strategic management tool that allows businesses to visualize, design, and innovate their business models. One of the key components of this model is the 'Revenue Streams', which is the focus of this glossary entry. Revenue Streams are the mechanisms through which a company generates cash from each Customer Segment. They represent the cash a company generates from each Customer Segment, the money a company makes from each customer must be more than the cost of getting and keeping the customer.

Revenue Streams are crucial to the sustainability of a business model as they determine the income a business generates to cover its costs and generate profit. Understanding the different types of revenue streams and how they can be leveraged is key to designing a successful business model. This glossary entry will provide a comprehensive explanation of revenue streams in the context of the Business Model Canvas.

Types of Revenue Streams

Revenue streams can be broadly categorized into two types: transactional revenues resulting from one-time customer payments, and recurring revenues resulting from ongoing payments . Transactional revenues are generated when a customer makes a one-time payment for a product or service. This type of revenue stream is common in retail businesses where customers pay for goods or services at the point of sale.

Recurring revenues, on the other hand, are generated when a customer makes regular payments for a product or service. This type of revenue stream is common in subscription-based businesses such as software-as-a-service (SaaS) companies, where customers pay a regular fee to access the service. Recurring revenues provide a steady income stream and can help businesses predict their future income.

Transactional Revenue

Transactional revenue is a type of revenue stream that is generated when a customer makes a one-time payment for a product or service. This type of revenue is common in businesses that sell physical products or one-off services. For example, a furniture store generates transactional revenue when a customer buys a piece of furniture.

Transactional revenue can be a significant source of income for a business, especially if the business sells high-value products or services. However, it can also be unpredictable, as it depends on the number and value of transactions that occur within a given period. Therefore, businesses that rely heavily on transactional revenue need to have strategies in place to encourage repeat purchases and attract new customers.

Recurring Revenue

Recurring revenue is a type of revenue stream that is generated when a customer makes regular payments for a product or service. This type of revenue is common in businesses that offer subscription services or ongoing contracts. For example, a software-as-a-service (SaaS) company generates recurring revenue when customers pay a monthly or annual fee to use its software.

Recurring revenue provides a steady and predictable income stream, which can help businesses plan for the future and invest in growth. However, businesses that rely on recurring revenue need to ensure they provide ongoing value to their customers to retain them and prevent churn.

Revenue Stream Strategies

There are several strategies that businesses can use to generate and maximize their revenue streams . These strategies can be broadly categorized into pricing strategies, sales strategies, and customer retention strategies. Each of these strategies is designed to increase the amount of revenue a business generates from its customer segments.

Pricing strategies involve setting the price of a product or service to maximize revenue. This can involve setting a high price for a premium product, setting a low price to attract more customers, or offering discounts to encourage bulk purchases. Sales strategies involve promoting a product or service to increase sales. This can involve advertising, sales promotions, or direct sales efforts. Customer retention strategies involve keeping customers engaged and satisfied to encourage repeat purchases and reduce customer churn.

Pricing Strategies

Pricing strategies are crucial in determining the revenue streams of a business. The price of a product or service is one of the main factors that customers consider when making a purchase decision. Therefore, businesses need to carefully consider their pricing strategies to ensure they are attracting the right customers and generating the maximum possible revenue.

There are several different pricing strategies that businesses can use. Cost-plus pricing involves setting the price of a product or service based on the cost of production plus a markup. Value-based pricing involves setting the price based on the perceived value of the product or service to the customer. Competitive pricing involves setting the price based on the prices of similar products or services in the market. Each of these strategies has its advantages and disadvantages, and the best choice depends on the specific circumstances of the business and its market.

Sales Strategies

Sales strategies are another important factor in generating revenue streams. These strategies involve promoting a product or service to increase its sales. This can involve a variety of tactics, including advertising, sales promotions, direct sales efforts, and more.

Advertising is a common sales strategy that involves promoting a product or service through various media channels. This can include traditional media such as television and print advertising, as well as digital media such as online advertising and social media marketing. Sales promotions involve offering discounts or other incentives to encourage customers to make a purchase. Direct sales efforts involve directly contacting potential customers to promote a product or service. Each of these tactics can be effective in increasing sales and generating revenue, but they also require investment and careful planning to be successful.

Customer Retention Strategies

Customer retention strategies are crucial for businesses that rely on recurring revenue streams. These strategies involve keeping customers engaged and satisfied to encourage them to continue using a product or service. This can involve providing excellent customer service, offering regular updates or improvements to the product or service, and building strong relationships with customers.

Providing excellent customer service is one of the most effective ways to retain customers. This involves responding quickly and effectively to customer inquiries and complaints, and going above and beyond to meet customer needs. Offering regular updates or improvements to the product or service can also help to keep customers engaged and satisfied. This shows customers that the business is committed to providing the best possible product or service, and encourages them to continue using it. Building strong relationships with customers involves communicating regularly with customers, understanding their needs and preferences, and showing appreciation for their business. This can help to build loyalty and encourage repeat purchases.

Revenue Stream Innovation

Innovation is key to maintaining and growing revenue streams. As markets evolve and customer needs change, businesses need to innovate their products, services, and business models to stay competitive and generate new revenue streams. This can involve developing new products or services, exploring new markets, or adopting new business models.

Developing new products or services can help a business to attract new customers and generate new revenue streams. This involves identifying unmet customer needs or market gaps, and developing products or services to meet these needs. Exploring new markets can also help to generate new revenue streams. This involves identifying potential new customer segments or geographic markets, and developing strategies to reach these markets. Adopting new business models can involve changing the way a business generates revenue, such as moving from a transactional revenue model to a recurring revenue model.

Product and Service Innovation

Product and service innovation involves developing new products or services to meet unmet customer needs or market gaps. This can involve improving existing products or services, developing entirely new products or services, or combining existing products or services in new ways. Product and service innovation can help a business to attract new customers, increase sales, and generate new revenue streams.

Improving existing products or services can involve adding new features, improving performance, or reducing costs. This can help to attract new customers, increase customer satisfaction, and generate additional revenue. Developing entirely new products or services involves identifying unmet customer needs or market gaps, and developing products or services to meet these needs. This can help a business to enter new markets, attract new customer segments, and generate new revenue streams. Combining existing products or services in new ways can involve bundling products or services together, or creating new product or service offerings based on existing ones. This can help to increase sales, improve customer satisfaction, and generate additional revenue.

Market Innovation

Market innovation involves exploring new markets to generate new revenue streams. This can involve identifying potential new customer segments or geographic markets, and developing strategies to reach these markets. Market innovation can help a business to expand its customer base, increase sales, and generate new revenue streams.

Identifying potential new customer segments involves understanding the needs and preferences of different groups of customers, and developing products or services to meet these needs. This can help a business to attract new customers, increase sales, and generate new revenue streams. Identifying potential new geographic markets involves understanding the needs and preferences of customers in different geographic areas, and developing strategies to reach these markets. This can help a business to expand its reach, increase sales, and generate new revenue streams.

Business Model Innovation

Business model innovation involves changing the way a business generates revenue. This can involve moving from a transactional revenue model to a recurring revenue model, adopting a freemium model, or exploring other innovative business models. Business model innovation can help a business to generate new revenue streams, increase profitability, and stay competitive in a changing market.

Moving from a transactional revenue model to a recurring revenue model involves changing the way a business charges for its products or services. Instead of charging a one-time fee, the business charges a regular fee for ongoing access to the product or service. This can provide a steady and predictable revenue stream, and can help to build customer loyalty. Adopting a freemium model involves offering a basic version of a product or service for free, and charging for access to premium features or services. This can help to attract a large number of users, and can generate revenue from those who choose to upgrade to the premium version. Exploring other innovative business models can involve experimenting with new ways of generating revenue, such as through advertising, partnerships, or other methods.

Revenue streams are a critical component of the Business Model Canvas and play a vital role in the sustainability and growth of a business. Understanding the different types of revenue streams and how to leverage them effectively is key to designing a successful business model. Businesses need to continually innovate their products, services, and business models to generate new revenue streams and stay competitive in a changing market.

This glossary entry has provided a comprehensive explanation of revenue streams in the context of the Business Model Canvas. It has covered the different types of revenue streams, strategies for generating and maximizing revenue streams, and the importance of innovation in maintaining and growing revenue streams. It is hoped that this information will be useful for anyone seeking to understand or apply the concept of revenue streams in their business model.

Whenever you are ready - here are a couple of ways how I can help you grow your business:

1. ​ Business Free Training Design Sprint ​ . Join Over 2,000 founders, creators and innovators in our FREE 7-day crash course on growth design. 7 emails delivered to your inbox giving you a flavour of the strategic planning, business growth systems and methods we use.

2. ​ Builder OS - Online Course - If you're looking to grow your business, I share expertise, methods and step-by-step blueprints on finding growth opportunities, building lean offers and acquiring customers.

3. Venture Builder Newsletter ​ - Sign up for the newsletter to receive 1 weekly email with practical tips on finding profitable niches, creating irresistible offers and traffic generating systems.out your business.

Helping designers and strategists turn their boldest ideas into market-leading ventures through Business, Design and Growth.

Whenever you are ready - here is how I can help:

1. ​ Newsletter ​ . Join over 2.000 founders, creators and innovators and get access to the business builder framework.

2. ​ Business Builder OS - Masterclass on finding growth opportunities, building lean offers and acquiring customers - driven by A.I.

3. Builder Toolkit - 30 ideas on how to grow your revenue.

Actionable advice about spotting new opportunities, creating offers & growing revenue.

Find, build and grow new ventures, better and faster.

©2024 Untaylored. All Rights Reserved.

Multiple Revenue Streams: The Secret to a Resilient Business

Get more out of your business with additional revenue streams, and ensure that your business is as resilient as possible.

As a business owner, you may not know what the future holds, but you can certainly prepare for it by properly future-proofing your company .

By setting up multiple revenue streams for your own business, you can stop stressing about income stability and devote more time to business development instead.

To get started, read on to learn more about revenue streams and how to successfully set up multiple streams as a recurring revenue model for your business.

What is a Revenue Stream?

If revenue is the money that your business generates, revenue streams are the different ways that your company generates cash.

You’ll need at least one for a successful business, but most businesses eventually work their way up to two or more different revenue streams (learn why in the next section).

A freelance copywriter might provide services to large SaaS companies as their main revenue source. To supplement that income, they might offer copywriting courses to aspiring and beginner freelancers as a second revenue stream, and monetize their blog on running a freelance business to bring in even more money.

On the other hand, a web design and marketing agency might base most of its recurring revenue on client retainers, with website templates as a secondary source of revenue. For additional income, they might charge a fee when they refer clients to other businesses they work closely with.

Why Multiple Revenue Streams are Beneficial for Your Business

Your business needs money to run, of course, but understanding your revenue streams also helps:

• Protect your business from fluctuating demands or economic downturns
• Shed light onto the health of your business
• Predict your income from month to month
• Reveal opportunities to expand your business into new markets and increase your revenue further

When a business earns money through only one source of revenue, it becomes totally dependent on it — which could spell trouble if that single revenue stream suddenly dries up.

Multiple streams of revenue offer additional protection in the event that one source underperforms or crashes. You can rehabilitate it while leaning on other sources of income in the meantime, or ditch the failing one completely if it makes more sense to do so.

Say your business brings in $10K a month from client projects, but this month you made $7K instead. If you were completely reliant on project revenue, you might find yourself stressing out about how to make up the difference and cover all of your expenses.

But if you also make another $7K a month in subscription fees, you’d be less affected by the change in service revenue because you have that additional income to fall back on. You can thoroughly troubleshoot issues in your business without feeling like the loss will put you in the red.

4 Easy Steps to Successfully Create Revenue Streams for Your Business

1. assess the current state of your business.

Start by reviewing your current sources of revenue, your customer base, and where your business stands in the industry or market. Do you make most of your income through one-time customer payments, a subscription fee model, or through a recurring revenue stream? What does each customer segment look like? How are your competitors generating revenue—through brokerage fees, usage fees, or some other revenue model?

Consider how each revenue stream fits into your business model, and if there are any gaps in your offerings that can be addressed.

2. Identify New Revenue Opportunities

The best types of revenue streams to pursue are the ones that take the least amount of effort to implement.

Increase your chances of success by going after low-hanging fruit. Consider revenue streams that appeal to existing customers, are complementary to your current offerings, or are similar to ones you have but target a new customer base.

If you’re feeling stuck, answering the following questions can help:

• Are there products or services that your prospects or customers consistently ask for?
• Can you tweak a particular service or physical product so it would be useful for another demographic?
• What are your competitors doing successfully? What are they doing that you can do even better?
• What do you wish your customers knew or did before they started working with you?
• What products or services would set your customers up for further success after they finish working with you?

You may also want to look at your current assets, including the skills your team possesses, and think of new ways to leverage them.

Don’t be afraid to dream big here—the sky’s the limit. Just make sure that, when you narrow down your options, they still make sense for your business. If an income stream doesn’t fit your brand or business model, it’ll be harder for you to implement.

3. Do Your Due Diligence

Once you’ve picked out the top contenders, now you’ll want to validate each of those ideas. Check with your audience to ensure they’re actually interested in your offerings. After all, it doesn’t make sense to roll out a product or service only to learn that no one will buy it.

So, send out surveys to your most engaged customers. Conduct polls for your social media followers. And if you plan on breaking into a new market, ask questions on forums like Reddit or Quora, or in the online communities where your new audience spends time.

Customer relationships are important, so if your customer base seems interested, draft a quick plan to determine if you can commit time and resources to this new offering.

Use your finances to guide your path forward. Accurate bookkeeping and financial statements can help identify which types of revenue streams will have a higher chance of success, based on your current situation.

Create financial projections (different forecasting models) for each revenue stream to discover which one is likely to have the greatest impact or the most success. Make sure to discuss your ideas with your accountant too—they may have insights that you wouldn’t have considered.

4. Analyze Your Results

Congratulations! You’ve launched a new revenue stream for your business. But your work’s not done yet.

For best results, measure and analyze the performance [what’s the key performance indicator?] of this new initiative. If you have the data, compare it against your other revenue streams from around the same point in time (e.g. three months after launch). You may also find it helpful to see how your actual revenue stacks up against your financial projections.

If the new addition is doing well, that’s great! Now would be a good time to think about what went well, what didn’t, and what steps to take next. But if it didn’t, don’t feel obligated to make it work. Cut your losses quickly, and start the process again with another revenue opportunity.

How the FreshBooks Revenue Streams Graph Can Help

To help you better understand where your money is coming from, FreshBooks has a Revenue Stream graph right on your dashboard. This gives you an at-a-glance view of your income streams, right when you log in.

Let’s say you’re a photographer who rents out your equipment to earn extra income. Without seeing how much money that’s making you over time, it can be hard to know if that transaction-based revenue has become a valuable way to diversify your income.

The Revenue Stream graph gives you valuable insights into your profitability by compiling the data from all your streams of income. It helps you make informed decisions in order to grow your business and plan for the future.

Of course, the benefits don’t end there. Use the Revenue Streams graph to:

• Assess the health and performance of your business at any time
• Know exactly where your invoice and non-invoice revenue comes from
• Compare the performance of one stream against all the others
• Identify dips in revenue so you can troubleshoot issues accordingly
• Easily spot trends so you can accurately plan for growth
• Make more informed decisions about how to diversify your revenue

Unlock Your Business Potential With a New Revenue Stream

As you can see, you don’t need a multimillion-dollar company to take advantage of the benefits that multiple revenue streams offer.

But whether your goal is to rake in the dough or just to have enough to support yourself and your loved ones, protecting your livelihood with different sources of income is a practical way to achieve the life (and businesses) you want.

Need a hand with the Revenue Streams graph? If you have any questions, feel free to reach out here .

This post was updated in April 2022.

Written by Feli Oliveros , Freelance Contributor

Posted on May 11, 2018

Freshly picked for you

Thanks for subscribing to the FreshBooks Blog Newsletter.

Expect the first one to arrive in your inbox in the next two weeks. Happy reading!

The 4 Types of Revenue Streams and How To Use Them To Earn More Money

Table of Contents

I f you’re one of the many people striving to reach financial freedom , you’ve likely heard more than one “money guru” mention the importance of revenue streams . 

Though there’s a lot of bad financial advice out there, diversifying your revenue streams is a time-tested, effective method of growing your personal income. 

And something many people don’t realize is that you can start building multiple revenue streams early on, soon after (or even before!) you’ve started living on your own .

Having revenue streams is a legitimate business model, whether you’re the head of a giant corporation or a recent high school grad.

Let’s explore more about what revenue streams are, and how you can unlock them to grow your personal income and earn more money long-term.

What is a revenue stream?

Before we dive in too deep, let’s establish a revenue stream definition:

A revenue stream is a channel or method through which a person or business earns money. 

That’s it—pretty simple! 

Revenue on its own is the amount of money a business or person generates by selling products or services. (It’s a bit different than the idea of profit, which refers to the amount of money earned after subtracting what had to be spent to make that money.)

But for the purposes of this article, you can essentially think of revenue as income or money in the bank and revenue streams as the different ways you get money in the bank.

Take Apple, for example. It’s a huge brand best known for its iPhones and Mac computers, but selling physical products isn’t the only way Apple makes money. Digital services such as iCloud storage, music or app subscriptions, and warranties are all separate revenue streams that make up an enormous portion  of the company’s total revenue.

On an individual level, many people only have one source of income: the pay they get from their full-time job. 

But every single one of the world’s wealthiest people has multiple income streams. And increasingly, people of all backgrounds and experience levels, in many industries, are realizing that multiple revenue streams aren’t just for the super-wealthy.

Earning more income overall is obviously one of the main benefits of having multiple income streams. But beyond that, having multiple types of income streaming into your bank account provides more security and helps you avoid the vicious cycle known as feast or famine .

Consider this: if your primary source of revenue starts to dry up, you’ll have other streams to minimize the impact. It’s easier to build up those other streams with the right foundation in place rather than starting from scratch if your primary stream starts hemorrhaging money.

4 types of revenue stream models to earn money

Revenue streams can be organized into four basic categories, depending on the type of payment and the products or services provided.

We’ll take a deeper look at those four categories, providing revenue stream examples that you may be able to leverage as well.

1. Transaction revenue streams

This is the most common stream of revenue for a business—typically the primary revenue stream for businesses or individuals selling products.

Any time you purchase groceries, clothes, technology, movie tickets—literally anything that is paid for once and only once, that counts as a transaction. 

Examples of revenue streams for individuals: transactions 

• Creating and selling your own artwork (jewelry, paintings, etc.) 
• Dropshipping Amazon products 
• Screen printing custom t-shirts 
• Selling merchandise on sites like Etsy 
• Working at Vector Marketing (wink wink)

2. Project-based revenue streams

A project revenue stream is similar to transaction-based revenue in that it’s a non-recurring payment at one point in time. However, this form of revenue is usually broken up into several large payments throughout the duration of a project, which may take a substantial amount of time, money, and resources to complete.

Examples of revenue streams for individuals: project-based 

• Launching an online course 
• Developing a mobile app
• Managing a marketing campaign on a freelance basis 
• Creating copy or design for a website 
• Publishing a novel

3. Service-based revenue streams

A service revenue stream is usually based on time instead of a physical product. For example, when you hire a lawyer, they charge an hourly rate for their services—there’s no transaction or project, just a charge based on the time they dedicate to the case.

Examples of revenue streams for individuals: service-based

• Rideshare or delivery driving
• Working as a virtual assistant
• Providing massage therapy
• Consulting or coaching

4. Recurring revenue streams

A recurring revenue stream, as the name suggests, means that payments will be ongoing. You probably have at least a few subscriptions to streaming services or online platforms you use—those are just one type of recurring revenue stream. 

  Examples of revenue streams for individuals: recurring

• Running an online membership/club
• Releasing a regular publication
• Selling a subscription to a Patreon (or something similar) 
• Renting or leasing property

How to create revenue streams for yourself or your business

Now that we’ve detailed the different types of revenue streams, the next step is to examine your own opportunities and find which potential revenue streams work best for you.

You don’t want to go overboard and jump on every revenue stream you stumble across. If you want to be successful, you’ll need to plan and strategize.

Here’s how to get started:

Do your research and choose a stream to test

The first step to building a new revenue stream is obvious: You have to decide what kind of revenue stream you want to start. 

This means doing some research. You can start by looking at our list of potential side hustles to get some ideas of potential revenue streams. 

As you look through this list, consider which ones suit your skills, schedule, and passions, and generally align with what you want to do in life . 

Understand the time, resources, and labor needed to start a new revenue stream. Does it make sense based on your current workload and budget? Do you have a plan to make this revenue stream profitable, or are you just starting one for the heck of it?

Remember, you don’t want to spread yourself too thin by trying all of the interesting potential revenue streams at once. Choose the one or two that seem most logical and test them out for a few months, then reassess and adjust your strategy if need be.

Identify your primary audience and source of revenue

Understanding your target audience and their needs is vital to the success of your money-making endeavor. 

Knowing your audience allows you to tailor your product, services, messaging, and marketing efforts to effectively reach your audience. Taking the time to get this right at the start will ultimately save you time and money.

Some easy ways to get started include researching businesses targeting similar audiences, reading surveys and data, and exploring social media.

Brainstorm opportunities that complement your existing revenue stream

Let’s go back to the Apple example. All of Apple’s revenue streams fall under the umbrella of digital products and technology. The brand didn’t jump off script and start selling automobiles—their streams are cohesive and consistent with their brand. Apply this same principle to your own brand or business. How can you create a network of different streams that still correlate and support each other? Here’s an example—let’s say you own a small business , and your primary source of revenue is selling clothing. You could create an extra revenue stream by starting and monetizing a fashion blog. You’ll earn additional income while showcasing your products and picking up website traffic. Maybe you even make the clothing yourself—creating YouTube tutorials could be another successful source of revenue.

Think about the customer’s journey

The best opportunities for revenue streams often occur along different stages of the customer’s natural lifecycle.

Apple sells an iPhone. What next? How about a warranty on the phone for parts and repairs? Now add apps and streaming subscriptions into the equation. You can see how easily this builds. Now the question is: how can YOUR customer’s unique journey present opportunities for additional revenue streams? The best way to answer this question might be to ask your audience yourself.

Find out what your customers are thinking about before and after they interact with your business, and create your potential new revenue streams around their answers.

Now is a good time to get started

Whether you’re looking to jumpstart a career or make a little extra money , multiple revenue streams are great for big businesses and entrepreneurs alike. Consider adding a new stream of income by working part-time with Vector Marketing. 

We love ambitious entrepreneurs— get to know us and how we can help you. 

Privacy Policy

7 Different Types of Income Streams for Your Business

• Learn the difference between active and passive income streams.
• Find out how to add new income streams to your business.
• Discover 7 alternative sources of income.

No matter what type of business you operate, you rely on having a steady flow of income to keep your bills paid. If you only have a single source of income and it suddenly falters, you€™re going to be in trouble. Having multiple income streams is an insurance policy against economic disaster. It provides a cushion to keep you afloat if your business suddenly falls off.

Though some types of businesses have a clearer path to expanding their income streams than others, with a little creativity you can identify new sources of revenue that can add stability, save you from a downturn, and even add to your bottom line. Want to learn more? Fiducial has information about 7 different types of income streams below!

The Difference Between Active and Passive Income Streams

There are several different types of income streams, all of which fall into the category of either active or passive. If you are making something, selling something, or providing a service of some kind in exchange for direct payment, that is active income. While passive income also creates revenue, the payment is not as connected to the original work.

A good example of someone earning passive income would be an author€™s book sales. While months or even years of work went into the book€™s publication, the income created by the book€™s sales after publication is passive. They go on without the author lifting a finger, with income deposited into their bank account for years after, and even following their death.

How to Add New Income Streams to your Business

We call adding new income streams to your business €œdiversification,€ and it is not as hard as it sounds. Any type of business can create new sources of revenue. A dog grooming salon can start to sell dog toys, clothes, or food. Supermarkets can add pharmacies, hair salons can add spa services like massage and skincare. Many retailers have created online stores that sell their products.

One of the most famous examples of income stream diversification exists in Sir Richard Branson€™s iconic Virgin brand. Though it began as a record store, the company has branched out into a wide range of products and services, including jewelry, cruises, mobile phone service, and even an airline.

Though you may not dream quite as big as Sir Richard, you still have options available to you. Even people who feel limited by their skills in one industry, like plumbers or electricians, can create more revenue streams by making videos of themselves teaching basic home repair skills and uploading them for monetization on YouTube. They may also offer to teach classes at the local high school or at homeowners€™ association meetings.

Alternative sources of income

To help you identify alternative sources of income for yourself or your business, here is a list of 7 different types of income streams:

Capital Gains

This is income that comes from selling stocks and other assets at a profit. Though it is extremely satisfying to buy something for a low price and sell high, the taxes on capital gains can quickly dampen your enthusiasm for this as a source of income. Capital gains are also reliant on market trends and are therefore unpredictable.

Dividends are payments that are distributed to owners of shares in a company. The more shares you own and the more profitable a company is, the more dividends you are likely to receive. They can be an excellent source of passive income.

Earned Income

Earned income is the money that you make from your job. It is straightforward and active and is almost always the primary source of income.

Interest Income

This is passive income earned from investment or savings. The money that you earn in an IRA, a savings account, or by investing in bonds is interest income.

Profit Income

Profit income is active income that is the goal of all businesses. It represents the difference between the cost of selling a service or product and the higher price you sell it for. The greater your profit margin and volume, the more profit income you make.

Rental Income

If you own property that you are not using and are willing to have somebody else use the space, you can offer to rent it. Rental income represents an excellent source of passive income. However, it requires making an initial investment in the property itself, and there are costs and tax liabilities involved.

Royalty Income

Royalty income is paid to people who create something and then get paid every time that it is used. To earn royalty income, you need to have established your ownership rights and created a marketing plan through which you will get paid. Examples are the monies paid to musicians and authors when their music is played or their books are sold.

There€™s an old adage about needing to have money to make money, and that is true of some of these €” you aren€™t going to be able to earn royalties if you haven€™t published music or literature, and you aren€™t going to be able to earn rental income if you don€™t have a property to rent. Still, it is a good idea to familiarize yourself with all of the options so that you can keep your mind open to all of the opportunities. The more income streams you can add to your business, the less risk of financial trouble when one revenue source suffers a downturn.

Do you have questions about income streams as an individual taxpayer or business owner? Call Fiducial at 1-866-FIDUCIAL or make an appointment at one of our office locations to discuss your situation.

Ready to book an appointment now? Click here . Know someone who might need our services? We love referrals !

For more small business COVID-19 resources, visit Fiducial€™s Coronavirus Update Center to find information on SBA loans , tax updates , the Paycheck Protection Program , paid sick and family leave , and more.

Recent POSTS

This site uses cookies. By continuing to browse the site, you are agreeing to our use of cookies.

11 Ideas for Creating Multiple Streams of Income to Diversify

Jessie Moore has been writing professionally for nearly two decades; for the past seven years, she's focused on writing, ghostwriting, and editing in the finance space. She is a Today Show and Publisher's Weekly-featured author who has written or ghostwritten 10+ books on a wide variety of topics, ranging from day trading to unicorns to plant care.

How do people get rich? Typically not from a single income source.

Despite that fact, most people have just one income stream — their job. The problem? If you don’t invest in other assets and learn how to diversify your income, you could lose everything if you lose your job.

In the book, “Rich Habits, Poor Habits,” author Tom Corley found after surveying 233 wealthy individuals, 65% had three streams of income. Generally, these are ordinary people with disciplined saving and investing habits.

When it comes down to it, if you’re looking to grow your wealth like a self-made millionaire, you’ll need to learn how to create multiple streams of income. Here are 11 of our favorite different income streams.

Best Multiple Streams of Income Ideas in 2024

The bottom line: Curious about how to have multiple streams of income? The short answer is that real estate investing produces the best method for building multiple streams of income.

Within the real estate scope, investors can choose among a wide variety of strategies to generate different income streams.

Don’t have the cash to buy investment property?

Real estate isn’t off the table if you don’t have enough money to buy a building or land. Y ou can still invest — even with a small account (as low as $10 in some cases!). Here are some of our favorite platforms for alternative real estate investing:

• Arrived Homes  – Buy shares in rental homes and vacation properties
• Fundrise  – Invest in a wide array of commercial projects around the country
• Yieldstreet  – Access asset classes like art, crypto, transportation, private credit

And let’s not forget REITs. My favorite platform for trading them is  Public , because you can also gain access to other alternative assets on the same platform.

Keep reading — we’ll discuss the benefits of these platforms in greater detail below. Plus, be sure to check out our article about fractional real estate investing .

Note: We earn a commission for this endorsement of Fundrise.

Diversify Now: 11 Multiple Streams of Income Ideas

Below, you’ll read several ideas for potentially generating multiple streams of income. Everyone’s needs will be different; consider your financial situation, goals, and risk tolerance.

1. Real Estate Investing

Purchasing rental property is a great way to add an extra income stream. You get income from the cash flow left over each month after expenses like the mortgage, utilities, and repairs.

When discussing multiple streams of income you also need to consider where it falls on the  ‘scale of passivity.’ I’ve experienced firsthand how active real estate investing can be. If you’re trying to save money on expenses by doing the work yourself, you’re limited to the time you have to dedicate to the project.

Real estate investing includes a wide variety of strategies, including but not limited to:

• Private lending
• House hacking
• Wholesaling
• House flipping
• Multifamily
• Single-family
• Crowdfunding

While a more active approach to real estate investing may take more sweat equity, owning the asset will increase the equity in your portfolio and you can enjoy benefits like appreciation, depreciation, mortgage paydown, and cash flow.

If you want the benefits of ownership and have the cash to buy a house but don’t have or want to devote the time, you can try an investing platform like Doorvest .

They help you own high-yield single family homes without requiring the knowledge or experience. You select investment criteria, close on the property, then reap the benefits of real estate ownership. Doorvest will source the property, complete renovations and manage on your behalf.

Real Estate Investment Trusts (REITs) can be an attractive method to generate extra income. They are companies that own and operate income-producing real estate. REITs are required by the IRS to pay out 90% of their taxable income to shareholders in the form of a dividend.

REITs invest in assets including commercial real estate, storage, senior facilities, office space, and hospitals. This can help you diversify outside of a traditional stock and bond portfolio with potentially high dividends.

The main drawback to keep in mind is some REITs don’t meet the IRS ‘qualified dividend’ definition and therefore, could be taxed at a higher rate.

Remember: It’s important to look at historical success, industry, sector, and fees before making investment decisions.

REITs can be purchased through most brokers — I really like Public , because beyond stocks and REITs, you can also diversify into other assets like collectibles or even luxury goods — areas you may not have considered investing in but that have amazing potential returns.

Also worth noting? If you need help finding REITs, WallStreetZen has a ton of tools to help you filter out the best opportunities. You can choose specific sectors to search so that you can focus on the REITs that are aligned with your investment strategy.

3. Fractional Real Estate

Alternative ways to invest in real estate have transformed the investing landscape over the past decade. Investors now can access assets that used to be set aside for the ultra-wealthy — large multifamily projects, equity in commercial distribution centers, or buying shares in vacation rentals.

The biggest draw to fractional projects is access to unique assets for minimums — as little as $10 on a platform like Fundrise. Fees typically range from 1-3% annually and minimums range from $10-$5,000.

Here’s what you DON’T have to worry about: Sourcing the deal, maintenance, or management.

However, crowdfunded investing isn’t perfect. The main drawback of crowdfunding? Lack of liquidity and control.

Unlike a stock, it may take longer to pull money out of a crowdfunding project like you would by choosing to sell a stock. In addition, you do not have a say in how real estate assets are developed and managed.

Want to explore? Here are our top picks to utilize crowdfunding to develop multiple streams of income:

• Arrived Homes  – Buy shares in rental homes and vacation properties
• Fundrise  – Invest in a wide array of commercial projects around the country
• Yieldstreet  – Access asset classes like art, crypto, transportation, private credit

4. Invest in Small Businesses

Starting a small business can be extremely rewarding. Owning a local establishment like a restaurant, ice cream parlor, dance studio or salon can not only serve the community but also grow into a profitable family business.

While this type of business can be rewarding, it takes a lot of time and money to be successful. Capital outlay for a physical location, advertising, marketing, hiring, and inventory requires money and expertise.

Out of all these factors, the biggest headaches result from hiring turnover.

Alternatively, you can reap the benefits of small business ownership without the headaches. Just like real estate crowdfunding platforms, there are small business investing platforms.

Do you love cooking or want to own a restaurant? You can either spend $40,000-$50,000 to start your own food truck.

Or, you can use platforms like Mainvest  to invest in a small business like this for as little as $100.

Mainvest lets you invest in these businesses, so you can live the small business dream without the hardest parts, like making a business plan or dealing with bank loans or leasing a space.

Mainvest discovers and properly vets small businesses. As an investor, you can help raise money to fund their business and then potentially get a portion of their revenue as a return.

5. Invest in CDs

Growing up, if you asked me if a certificate of deposit (CD) is a good investment I would’ve called you crazy and said ‘Maybe in the 1980s.’ Now in 2023 it is not uncommon to see average returns at 5%.

A CD is a savings product that pays a stated interest rate based on a lump sum of money. Your bank or credit union will typically hold your money for terms of 1-5 years and pay interest in return. While a savings account is liquid and pays low interest, a certificate of deposit is the next step up, paying higher interest with slightly less liquidity.

Overall, CDs are low-risk and passive on the overall income stream spectrum. Just make sure if you’re investing in them to be aware of the features, terms, and minimum required. Companies like CIT Bank allow you to lock in a 5% annual rate. This type of CD is held for 6 months with $1,000 invested.

But CDs aren’t the only banking product that can potentially generate income…

6. Invest in a High-Yield Savings Account

Another financial product available at most banks and credit unions is a high-yield savings account. If it’s ‘high-yield’ then what’s the difference from a CD?

In exchange for a lower interest rate, high-yield savings accounts do not have liquidity restrictions. CDs have maturity dates and therefore, withdrawal penalties if money is removed prior to maturity.

High-yield accounts are better for emergency funds or any unexpected expense where the funds need to be accessed. If you have $10,000 sitting in your bank, for example, you could put $2,000 into a CD, knowing it can sit for 6-12 months without being touched.

M1 Finance  is one of the best platforms for high-yield savings accounts. They currently offer a 5% annual rate — more than 12x higher than the FDIC-reported national average of 0.40%.

7. Dividend Stocks

Dividend stocks are associated with public companies that share profits with shareholders in the form of dividends.

Reinvested dividends over time can be one of the most passive ways to create multiple streams of income. For instance, Coca-Cola Co ( NYSE: KO ) is a notable long-standing dividend-paying company.

Dividend-paying companies are typically more established compared to start-ups and early-stage public companies. They tend to have steady prices and consistent dividends.

On the other hand, younger companies choose to reinvest profits back into the business as opposed to paying dividends to shareholders. In this case, you’ll see no dividends but a possible increase in stock price.

M1 Finance isn’t just good for HYSAs … It’s one of the best platforms to research, choose, and invest in dividend stocks.

On M1 Finance , you can create a customized “pie” of different stocks that includes dividend companies and/or ETFs, or you can simply invest in an expert M1 Dividend Pie.

Plus, with M1 Finance , you can automatically reinvest your dividends for individual stocks or your entire portfolio.

8. Invest in Funds

In the investing world, “funds” refers mainly to ETFs and mutual funds. Both are funds that include a collection of securities. This strategy will offer more diversification compared to individual stocks.

The biggest difference between the two is how they are managed:

• Mutual funds are actively managed
• ETFs are passively managed

Minimum investments vary for both types but overall, ETF expense ratios are cheaper due to their management structure.

More often you may hear about robots or indexes performing the same, if not better, than actively managed funds.

In my opinion, for a long-term strategy, I’d prefer to invest in an ETF that tracks an index like the S&P 500. You can also invest in ETFs that focus on different sectors, like energy, technology, healthcare or real estate.

Get started with online investing platforms like eToro . Their social investing platform allows you to see what friends are buying and selling and learn from their expertise.

eToro securities trading is offered by eToro USA Securities, Inc. (“the BD”), member of FINRA and SIPC. Cryptocurrency is offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. https://www.wallstreetzen.com is not an affiliate and may be compensated if you access certain products or services offered by the MSB and/or the BD.

eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.

9. Invest in Art

Want to learn how to create different income streams that have no correlation to the stock market?

The art world has a market of its own. Historically art as an investment steadily appreciates in value. However, it is hard to value and can depend solely on the reputation of the artist.

Physical art pieces can be purchased online or through live auctions, usually at a heavy price tag.

However, there are other options.

For one, ETFs. Just like you can purchase real estate, tech, or energy ETFs, you can also buy art ETFs through a brokerage account.

If you’re familiar with crowdfunding real estate platforms, you may be interested in a platform like Masterworks .

Here you can leverage the power of a unique asset class to purchase fractional shares of art. The process works similarly to other crowdfunding platforms. They vet the asset, purchase it, securitize it, then sell it in the form of shares.

10. Invest in Wine

Typically when I hear the word ‘wine’ I think of ‘buy and drink,’ not ‘buy and hold.’ Similar to contemporary art, wine is a newer alternative investment that should be purchased with caution.

Investing in wine can carry some of the following risks:

• Potential theft
• Counterfeiting
• Poorly stored product
• Too old of a product
• Purchasing wine whose price doesn’t increase over time

To reduce your risk, some of the same investing principles apply in the wine world – diversify by buying different types, don’t resell too quickly, and look for quality wines with strong ratings and brand equity.

Another way to reduce your risk is to check out platforms like Vinovest . This is an investing platform that helps you build a portfolio of wines. You own 100% of the wines and they take care of the storage. Buy, sell, or even drink your wines and enjoy ‘liquid assets.’

11. Invest in Collectibles

The ‘Shattered Backboard’ Air Jordan shoes from August 25, 1985, are a 1-of-1 piece of sports memorabilia worn by Michael Jordan himself during an iconic moment in basketball history. These shoes and other collectibles are available to buy and sell as fractional shares.

You may have heard of famous collectible items over the years including sneakers, signed jerseys, and rookie trading cards being sold for obscene amounts of money. Now you can get a piece of the action on platforms like Public .

Although collectibles can be speculative in nature, the asset class can add diversity to your portfolio. Dividend stocks or REITs may be more traditional in terms of different income streams, but if you get a hold of a Mickey Mantle rookie card, you might want to hold on to it for a while.

Final Word:

There are many methods for creating multiple streams of income. To figure out what’s best for your situation, consider the following factors:

• Amount of research involved
• Where does it fall on the scale of passivity
• Time required to get started
• Investment required to get started
• Alignment with long-term goals

Overall, the most important concept is to understand how to diversify your income sources. The best income streams will depend on the financial goals of each individual. The best thing you can do is take action and remain patient along the way.

How can I make $1000 a month passively?

The most realistic way to $1,000 per month passively is to purchase a multifamily rental property. Multiple units create economies of scale by having one mortgage payment with multiple units producing rental income. Working up to $1,000 per month is a tall task but it can be done with action and patience.

What are the 7 streams of income?

The 7 streams of income are earned income, capital gains, interest income, dividend income, rental income, business income, and royalty income. Each income stream listed falls into one or more of these categories.

What are 4 types of income?

The 4 types of income come from being an employee at a company, self-employed, big business owner, and investor. These 4 income types are also known as Robert Kiyosaki’s cashflow quadrants.

How do I get multiple streams of income?

In addition to a W2 job, you can get started with little time and money by purchasing dividend stocks and investing on a crowdfunding platform. Depending on your expertise, interests, and financial goals, these 2 methods can get you started with different income streams in familiar asset classes.

Where to Invest $1,000 Right Now?

Did you know that stocks rated as "Buy" by the Top Analysts in WallStreetZen's database beat the S&P500 by 98.4% last year?

Our April report reveals the 3 "Strong Buy" stocks that market-beating analysts predict will outperform over the next year.

About the author

Contributor

Ryan is a Property Financial Analyst and active real estate agent in Michigan. He has worked in the retirement industry for Voya Financial and Alerus Financial as a Retirement Analyst. Ryan holds a bachelor's degree in business from Ferris State University.

Sign up to get daily digests on the stocks that matter to you.

Keep reading.

REITs vs Stocks: Which Should You Invest In?

12 Best Passive Income Investments & Ideas that Work in 2024

The Best Way to Build a Dividend Portfolio in 2024

The 12 Best Real Estate Investing Apps in 2024 (Real Estate Crowdfunding Sites)

THIS is How to Invest in Art in 2024 [Identifying Good Investments]

8 Best Examples of Alternative Investment Strategies & Ideas in 2024

Welcome to wallstreetzen 👋.

8 Ways To Generate Multiple Income Streams

Generating multiple income streams is an effective way to build financial security and stability. While it requires hard-work and dedication, the rewards can be great. Through this guide, you’ll learn the basics of how to create multiple income streams and utilize them to create long-term financial success.

• Types of Income Streams
• What are the Benefits of Multiple Income Streams?
• What is Multiple Income Streams?
• What is Passive Income?
• What is Portfolio Income?
• How to Generate Multiple Income Streams
• Tips for Generating Multiple Income Streams
• What is Active Income?

1. Types of Income Streams

Generating multiple income streams is a great way to achieve financial security and stability. When looking for ways to start creating multiple income streams, it’s important to understand the different types of income streams and how they work.

The most common types of income streams are passive income, active income, portfolio income, and other forms of income. Passive income is generated from investments such as stocks, bonds, or real estate that require little to no effort on your part. Active income, on the other hand, is earned through more labor-intensive activities such as freelancing, consulting, or working a job. Portfolio income is income generated from a combination of investments and other sources. Other forms of income, such as royalties and rental income, can also provide a steady stream of income.

Each type of income stream has its own advantages and disadvantages. For example, passive income requires a bigger initial investment, but can provide a steady stream of income with minimal effort. Active income requires more effort, but can result in higher rewards. Portfolio income can allow you to diversify your income streams, but requires more effort to manage.

When considering how to generate multiple income streams, it’s important to consider which type of income stream is best for you and your goals. With the right strategy, you can create a portfolio of income streams that can provide you with long-term financial stability and freedom.

2. What are the Benefits of Multiple Income Streams?

Generating multiple income streams is a great way to build financial security and stability, as well as diversify your investments. Having multiple sources of income can provide a safety net should one of your income streams become compromised. Additionally, multiple income streams give you the potential to increase your overall earning potential.

By creating multiple income streams, you can spread the risk of an income stream dropping out or not bringing in the amount of money you were hoping for. Having multiple streams of income can also help you achieve financial goals faster. For example, if you have multiple income streams, you can dedicate a certain amount of each income stream to go towards a financial goal such as a down payment on a house or retirement fund.

Additionally, having multiple income streams can help you sleep better at night, knowing that you have a variety of reliable sources of income to rely on. No matter what the economy looks like, you have the peace of mind in knowing you have a number of different income streams to rely on.

Creating multiple income streams can also be a great way to boost your creativity. You can use your current skills to create a variety of income streams that are all connected to one another. This gives you the opportunity to explore different ways of making money that may not have been available to you before.

Overall, generating multiple income streams is a great way to build financial security and stability, diversify your investments, and increase your overall earning potential. With the right strategy and dedication, you can create a plan that will help you maximize your income streams and achieve your financial goals.

3. What is Multiple Income Streams?

Multiple income streams is a great way to increase your financial security and stability. It is the concept of having multiple sources of income – both passive and active – that do not rely on one single income source. This can include investments, businesses, and other income opportunities.

Creating multiple income streams is a unique way to diversify your income and to ensure that you’re not relying on one single source of income. Having multiple sources of income can help you to better protect your financial future and provide you with the security and stability you need to build long-term financial success.

It’s important to note that earning multiple income streams takes hard work and dedication. You’ll need to be creative and think outside of the box to find new income opportunities. You’ll also need to stay committed and motivated to build your multiple income streams and make sure they are successful. This can require a great deal of effort, but the rewards can be great.

Through this guide, you’ll learn the basics of how to create multiple income streams and utilize them to create long-term financial success. We’ll discuss the different types of income streams, strategies for creating multiple income streams, and strategies for managing them. We’ll also discuss the potential risks and rewards associated with creating multiple income streams so that you can make informed decisions about your financial future.

By the end of this guide, you’ll have a better understanding of what multiple income streams are and how to create multiple income streams. With this knowledge, you’ll be able to create your own multiple income streams and use them to build financial security and stability.

4. What is Passive Income?

Passive income is a great way to increase your financial stability and security, and can be a rewarding and exciting experience. Passive income is income that is generated from investments and other sources that require minimal effort or maintenance to generate. This type of income requires a different approach than traditional forms of income and requires a unique set of skills.

For example, investing in the stock market can be a great way to generate passive income, but it requires knowledge of the market and a strategy for investing. Investing in real estate is another popular form of passive income, and it is often seen as a low-risk and high-return investment. Other forms of passive income include royalties from books, music, and software, as well as income from affiliate marketing or online courses.

In order to generate passive income, you must be willing to take risks and have the knowledge to make informed decisions. It is also important to research different investments and find out which ones are best suited for your particular goals and risk tolerance. Additionally, you may need to invest in software or other resources to automate the process of earning passive income.

Creating multiple income streams is a great way to diversify your income and create financial security and stability. Passive income can provide you with a steady and reliable source of income, as well as new opportunities for growth and investment. With the right knowledge and dedication, passive income can be a great way to create long-term financial success.

5. What is Portfolio Income?

Portfolio income is an important part of generating multiple income streams. It is income generated from investments, such as stocks, bonds, mutual funds, and other investments. It is important to remember that portfolio income can come in many forms and does not always have to be generated through stock market investments. For example, if you own a rental property, the rent that you charge can be considered portfolio income.

Building a portfolio is essential for creating multiple income streams. It involves diversifying your investments into different asset classes in order to minimize risk while maximizing returns. The goal should be to create a portfolio that will generate a steady stream of income while also providing potential for capital appreciation.

When building your portfolio, it is important to consider both your risk tolerance and your time horizon. Risk tolerance describes how much risk you are willing to take on, while time horizon refers to the length of time you plan to hold your investments. It is important to find a balance between the two in order to create a portfolio that is suitable for your needs.

By creating a portfolio of investments, you can generate income through dividends, interest, and capital gains. You will also have the potential to increase your income over time as the value of your investments increases.

Portfolio income is an important part of generating multiple income streams. With the right approach, you can use portfolio income to create long-term financial success. Make sure to consider your risk tolerance and time horizon when building your portfolio in order to maximize your returns and minimize your risk.

6. How to Generate Multiple Income Streams

Creating multiple income streams is a great way to gain financial security and stability, but it takes a lot of effort. In order to make the most of it, it is important to do your research and plan carefully. This comprehensive guide will provide the necessary steps to start generating multiple income streams.

The first step is to identify the types of income streams that are right for you. There are many different types, such as passive income through investments, royalties from creative works, or online businesses. It is important to assess your strengths and weaknesses, so you can decide which type of income stream is the best fit for you. This will also help you determine the amount of time and effort you need to dedicate to each stream.

Once you have identified the type of income streams that will work best for you, the next step is to develop a plan. You need to think about how much money you want to make, how much time you have to dedicate to each stream, and what type of investments you are willing to make. Having a well-defined plan will help you stay organized and on track.

The third step is to take action. Once you have identified the type of income stream and developed a plan, it is important to take the necessary steps to put the plan into action. This may include setting up an online business, researching investment opportunities, or creating a portfolio of creative works.

Finally, it is important to stay focused and motivated. Generating multiple income streams requires dedication and perseverance. It is important to stay organized and motivated as you work to build your income streams.

Creating multiple income streams can be a great way to gain financial security and stability. It takes research, planning, and dedication, but the rewards can be great. By following the steps in this guide, you can start creating multiple income streams and achieve long-term financial success.

7. Tips for Generating Multiple Income Streams

Generating multiple income streams is a great way to build long-term financial freedom and stability. Whether you’re an entrepreneur or a freelancer, the ability to diversify your income streams is essential to create a solid foundation for financial success. It’s important to remember that creating multiple income streams requires hard work and dedication, but the rewards can be great.

To begin, diversifying investments is one of the most effective ways to generate multiple income streams. Investing in a variety of different ventures, stocks, and bonds can help to spread out your risk and ensure that you don’t put all your eggs in one basket. Additionally, taking advantage of opportunities, such as real estate investments, can be a great way to create multiple income streams. Investing in a rental property or flipping a house can be a great way to generate a steady stream of passive income.

Finally, taking calculated risks can be a great way to create multiple income streams. While it may be tempting to stick to what you know, it’s important to be open to new opportunities and take risks that could lead to greater rewards. Investing in a new business venture or taking a leap of faith into a new career path can be a great way to generate multiple income streams.

Generating multiple income streams is an effective way to build financial security and stability, and through this guide, you’ll learn the basics of how to create multiple income streams and utilize them to create long-term financial success. By following the tips outlined above, you’ll be able to diversify your income streams and create greater financial freedom in the long run.

8. What is Active Income?

• What is active income? Active income is income from activities that require ongoing effort and maintenance, such as working a job or running a business. It is the most common type of income, as it requires time and energy to generate money. Finding a job or starting your own business are great ways to create active income. The key to success with active income is to find something that you love to do and to stick with it, as it can be challenging to maintain long-term success in this field.
• Benefits of active income Active income is a great way to generate money and create financial stability. The most obvious benefit is that you get paid for the work that you do, and the amount of money that you make is directly related to the amount of effort that you put in. Additionally, it is a great way to gain experience in a field, as it helps to develop skills that can be transferred to other areas of life. Finally, it can provide an opportunity to network and establish connections with people who can help you in the future.
• Challenges of active income Active income can be challenging to maintain in the long-term. It requires dedication and hard work to create a successful income stream. Additionally, it can be difficult to find a job or start a business that is in line with your passions and interests. Furthermore, the success of your income can be limited by the amount of time and energy that you are able to devote to it. Despite these challenges, with the right attitude and dedication, it is possible to create a successful active income stream.
• Tips for success If you are looking to create a successful active income, it is important to find something that you are passionate about and to create a plan to achieve your goals. Additionally, it is important to stay organized and to establish goals that can be achieved in the short and long-term. Finally, it is important to stay motivated and to take advantage of opportunities that arise. With these tips, you can create a successful income stream that will provide financial security and stability.
• Conclusion Active income is a great way to generate money and create financial stability. It requires dedication and hard work, but with the right attitude and plan, it can be successful. This guide has provided you with the basics of creating an active income stream, and with the tips provided, you can create long-term financial success.

Renting Out Your Car Or Property On A Sharing Platform

8 smart money moves for empty nesters, recent posts.

• Mastering the Basics of Option Trading
• Effective Strategies for Budgeting Your Salary
• Powerful Personal Finance Tips for Beginners

Join Our Newsletter

© 2023 DollarSharp

• Terms & Conditions
• Privacy Policy
• Unsubscribe

Are you sure you have over $10k in debt?

Applications with less than $10k in debt will not be accepted, are you sure you have over $10k in debt.

Applications With Less Than $10k In Debt Will Not Be Accepted​

10 Multiple Income Streams to Grow Your Wealth

Some products in this article are from our partners. Read our  Advertiser Discloser.

Having multiple income streams is one of the best ways to protect yourself financially and grow your income over time. It also gives you greater peace of mind and financial security. 

Let’s say that your only source of income is your full-time job. If you unexpectedly get fired, things are going to be financially tight for a while. 

So, to set yourself up for success, start thinking about how to create multiple income streams. However, you may not know how to make this happen or where to start. 

That’s precisely what this article is going to teach you. 

What are the Most Common Types of Income Streams?

Most people diversify their income with various active and passive income streams. Active income is the money you receive for performing a service.

For instance, your job would be considered an active income because you won’t get paid if you don’t do any work. On the other hand, passive income doesn’t involve exchanging time for money. 

There will still be a lot of work involved, but it’s usually put in on the front end. Once you start earning passive income, it generally allows you to be more hands-off. 

Most people start with active income streams and slowly begin branching out into passive income over time. The important thing is just to get started.

So, if you’re looking for ways to create multiple income streams, here are the ten best ways.

1. Full-time job

The idea of building multiple income streams can seem overwhelming at first. But if you and your spouse work full-time, you already have multiple income streams. 

Most people work at a full-time job that provides the primary source of their income. And there are a lot of advantages to keeping this position as long as possible.

According to the United States Census Bureau , the median income in the U.S. is $67,521. This is probably the most common way to make $50,000 or more per year.

A full-time job can also provide things like medical insurance, dental insurance, and disability insurance. Depending on the company you work for, you may even have access to a 401(k). When you’re self-employed, you have to provide those things for yourself.

Plus, working full-time gives you a steady income while you pursue other ventures. You can build your side hustle before and after work, all while maximizing your income at your full-time job.

2. Start a side gig

Most people start with a full-time job and then consider a side hustle they could add to earn extra money. A side gig is typically something you don’t plan on doing long-term , but it can be a good way to make extra money. 

One of the most popular side gigs that have popped up in recent years is becoming a delivery driver. Customers place an order at their favorite restaurant through an app like DoorDash or UberEats, and a delivery driver will pick it up and then drop it off with the customer.

There are a lot of advantages to becoming a delivery driver. You can work when it suits your schedule, which makes this easier to manage alongside a full-time job. Being a delivery driver won’t pay a lot of money, but it is a good way to earn an additional $500 to $1,000 per month.  

If delivering food isn’t the right fit for you, you can also pick up and deliver groceries for Instacart. Or you could become a pet sitter, Uber driver, or wait tables in your spare time. 

The options are endless, so spend some time thinking about the right side gig for you. 

3. Offer a service

If you’re looking for a side hustle that you could scale and possibly turn into your full-time job, why not offer some kind of service? For instance, if you work full-time as a teacher, then starting your own tutoring business could be the perfect additional source of income for you.

Or, if you have any writing skills, you could become a freelance writer . There are plenty of businesses and websites that need a lot of content and are on the lookout for quality writers.

As a freelance writer, you could write blog posts, website content, magazine articles, or press releases. Websites like Upwork, ProBlogger, and Freelancer.com make it easy to pitch clients and find your first few jobs. 

Other services you can consider are bookkeeping , photography, or editing. 

4. Sell items online 

If you’ve ever hosted a neighborhood garage sale, selling items for extra cash may have lost some appeal. But selling items online is one of the easiest and most overlooked side hustles. 

You can use sites like eBay, Amazon , or Craigslist to sell items you don’t want anymore for some extra cash. Doing this is a great way to clear the clutter out of your home and earn some extra money.

Or if you have a knack for finding great deals, you could buy items at a discount and resell them for a profit. Many people do this by browsing garage sales, thrift stores, or antique stores. 

However, you may need to spend some time learning what items are best for resale. Or if you consider yourself crafty, you could open an Etsy store . 

5. Create a course

Increasingly, many people are turning to the Internet as a source of education and learning. According to this article from Forbes , online learning will grow from a $107 billion industry to $325 billion by 2025. 

So if you have any kind of specialized knowledge, you could capitalize on this by creating and selling an online course. Depending on the type of course you sell, you could charge anywhere from a hundred dollars to several thousand. 

And sites like Teachable will host the course for you, so all you have to do is create the content. Creating a course can take a lot of work on the front end , but once it’s created, you can continue to sell it over and over again. 

You may need to update it periodically to ensure the material stays relevant, but it’s a more passive form of income. 

6. Sell a digital product

When looking for multiple income streams, one that’s a little less time-intensive than a course is writing and selling a digital product like an e-book. You’ve probably never heard of many authors who make a good living by writing and selling e-books online.

The traditional route of publishing a book is notoriously difficult and tedious. Whereas you could write and self-publish an e-book in a matter of weeks. And sites like Amazon and Barnes and Noble will let you publish your book for free.

However, e-books are not the only digital products you can sell online. You can also create videos, audio, graphic art, stock photos, etc. Your options are endless. 

7. Rental Property

Purchasing a rental property can be a great way to add income. However, it will require a large upfront investment and ongoing expenses, like a mortgage, utilities, property taxes, etc.

Plus, you have to work to find new tenants and turn it over between tenants. And when you become a landlord, you’re responsible for maintaining the property and responding to your tenant’s needs. 

But if you’re up to the challenge, real estate is a good way to diversify your income and develop a steady stream of cash flow. The return on investment is relatively high, especially when you buy property below market value and put in the work to fix it up. 

Plus, you’ll receive numerous tax advantages you don’t get with other investments. 

8. Crowdfunded Real Estate

One thing that holds many people back from investing in real estate is the 20% upfront down payment required to purchase the property. That’s why many people turn to a real estate investment trust (REIT) instead. 

A REIT is a company that owns and operates income-producing real estate. Most REITs are registered with the SEC and publicly traded on a major stock exchange. This allows you to invest in real estate without purchasing it yourself. 

You have many options and can get started with as little as $10. If you’re interested in going this route, you might want to consider platforms like Fundrise to get started.

9. Invest in bonds

Bonds are a form of debt in which investors lend money to a company or the government. They are a common strategy businesses use to raise money. 

Bonds are also a good way to diversify your investment portfolio because they typically move differently than stocks. This means in an economic downturn, bonds may increase in value as stocks decline.

You can buy bonds directly through your brokerage account, but most purchase bonds through a fund. You should consider working with a financial planner to see the best option for your situation.

10. Investing 

And finally, the most common strategy for income diversification is through investing. Most people begin saving for retirement through vehicles like a Roth IRA or a 401(k). 

And there are a lot of advantages to investing in a Roth IRA or 401(k), especially if your employer is willing to match your contributions. 

But just like you want to diversify your income, it’s important to diversify your investment strategy. That way, your retirement plan doesn’t hinge on any single investment. 

One of the best ways to diversify your investments is by investing in a mix of mutual funds or ETFs. A mutual fund comprises a pool of money invested in bonds, stocks, or other securities. 

Many people like investing in mutual funds because you gain access to a professionally managed portfolio at a low price point.  

On the other hand, an ETF is an investment fund traded on a major stock exchange, just like stocks. It typically will hold stocks, bonds, and other commodities. 

Multiple income streams can help diversify your income and maximize your future earning potential. Hopefully, this article has shown you a variety of ways you can start doing this immediately. 

You don’t need much money to get started; you could start a side business today with $100. Anything you do will require work, but the financial rewards will be worth it. 

Jamie Johnson is a freelance writer who writes about personal finance and small business.

She attended University of Kansas where she studied Psychology. She also writes for a number of other well-known financial sites, including Credit Karma, Quicken Loans, and Bankrate. Her work has also been featured in Credible , Yahoo Finance and Business Insider .

Similar Posts

15 Sites Like Craigslist to Buy (or Sell)

8 Ways to Work From Home as a Bookkeeper

Gigwalk Review: Can You Make Money With This App?

23 Best Driving Apps To Make Money

23 Easy Ways to Make 10 Dollars a Day

15 Jobs That Can Make You Rich

Leave a reply cancel reply.

Your email address will not be published. Required fields are marked *

Thanks for the article Jamie. It helps one gain perspective.

A lot of people make the mistake of choosing side ventures that are only in line with their passion

It took me years to realise that I can use my skills for other things outside my passion

Articles like this one serve to open our eyes when we are considering what else to do. Improving our chances of making it as entrepreneurs

So glad this helped you! There are so many ways to use passions to make money

Great post, it occurred to me one benefit of wiring your way up the corporate ladder is that entry level peeps get salary, and that’s all. Middle management usually gets sizable bonuses too. And corporate officers get juicy stock benefits. So you can go from one source of income to three just in your 9 to 5 job. Of course you could lose them all at once so there is still a stability benefit to those others you mentioned that aren’t tied to your job. My last year of 9 to 5 corporate life I more than doubled my salary with my bonus and stock benefits!

That’s a good point! Bonuses can be huge and helpful, but there isn’t alsowwys job stability.

Small Businesses That Run Themselves? Here Are the Best 10 Automated Business Ideas

Jenni Sisson, Contributor

• Updated March 26, 2024
• Co-authored by: R.J. Weiss

Looking for automated business ideas or passive income strategies? 

This guide details the top 10 hands-off models that run smoothly with minimal ongoing work after initial setup:

• Selling digital products like online courses, which only need to be created once but can be sold indefinitely.
• Monetizing a YouTube channel through ad revenue from videos that continue earning money indefinitely after being uploaded.
• Affiliate marketing through promoting other companies’ products and earning commissions, with little ongoing effort.
• Dropshipping physical products through online stores without needing to handle inventory or shipping.
• Building an income-generating blog through evergreen content, affiliate links and ads.
• Selling print-on-demand products like t-shirts, mugs and bags with artwork, where printing and shipping are automated.
• Developing mobile apps that provide passive income through subscriptions and advertising. 
• Licensing music tracks through stock music libraries.
• Writing an e-book that continues earning royalties with little updating required.
• Renting out assets like your home, car, parking space or boat.

Follow along as we detail how to systematize these hands-off business models to run smoothly on their own with minimal input needed from you once set up.

Table of Contents

What Makes For a Great Automated Business Idea?

We define a passive income business as the ability to earn money today and in the future for work that you’ve done in the past. In other words, your business’s ability to generate revenue doesn’t depend on you trading hours for dollars.

There are two ways a business can run without your ongoing active participation:

• Automation : Use technology to perform repetitive tasks.
• Delegation : Have someone else perform repetitive tasks.

With the right systems in place (and in some cases, the right people), most good business ideas can generate passive income. To understand why, let’s look at what a business is at the most basic level.

As described in the now-classic business book, The Personal MBA by Josh Kaufman, a business has five distinct parts:

• Value creation : Discovering what people need or want, then creating it.
• Marketing : Attracting attention to, and building demand for, what you’ve created.
• Sales : Turning prospective customers into paying customers.
• Value delivery : Giving your customers what you’ve promised and ensuring that they’re satisfied.
• Finance : Bringing in enough money to keep going and make your effort worthwhile.

Think of value creation as your overall business idea. This is where you’ll need to put in the bulk of your up-front effort and investment. To create passive income, the goal is to create something of value — a product or service — that has no marginal cost of replication .

As angel investor Naval Ravinkant said in his famous Twitter thread how to get rich (without getting lucky) :

From there, you want to automate the marketing, sales, value delivery and finance parts of your business. Of course, this is easier said than done.  But your business won’t be truly passive unless you automate each part of it!

For each of the passive income ideas listed below, we’ll address how and to what extent you can automate these elements of your business, leaving out finance, as that aspect of the business is largely automated by default with these options.

The Best Passive Income Business Ideas

Remember: nearly all passive income streams require work on the front-end, during the value creation phase and systemization process. 

Expect to put in the effort to set up the systems, software and people that will minimize your future inputs for your business.

Once those pillars are in place, what you’ve created should continue to run with only occasional work from you, creating value that compounds over time. 

Each of the options below will require minimal inputs after you’ve set up these compounding systems.

#1. Create Information Products

The demand for information products (like e-books, online subscriptions to premium content, digital patterns, tutorials, membership websites and digital courses) has risen sharply over the years , and it isn’t slowing down. We ranked this as the top passive income idea because of its efficiency: you create the product once and sell it over and over again. 

Learn how ChatGPT and other AI creation tools are simplifying the process of launching a business, such as creating and selling information products, in our article on how to make money with ChatGPT .

Beyond value creation, how can other parts of this business be automated?

Marketing : If you build your information product on an existing course platform like Udemy or Skillshare , where audiences are visiting specifically to purchase courses, a lot of the marketing work will be done for you. (With the caveat that these sites take a share of the profits.)

For platforms where you’ll need to bring the audience (such as Teachable ), you can create ads or even leverage affiliates to bring attention to your product.

Sales : Once you’ve brought in potential customers through your marketing, you can run an evergreen sales funnel to move them from interested to buyer.

Value delivery : Information products must be revised occasionally to reflect the latest updates and stay relevant, so while this income stream is largely passive, there will be some periodic ongoing maintenance required. There’s also a customer service aspect to running an information product business, which can be easily outsourced using a virtual assistant.

Resource : Create and Sell Online Courses – A Step-By-Step Guide .

#2. Leverage Affiliate Marketing

This option is just as good as information products. The key difference is that with affiliate marketing, you’re not the one making the products — just the one selling them.

Small, boutique websites and blogs, as well as giant juggernauts like Amazon, will pay you a commission (and often a recurring commission) for the customers you send their way. 

The value creation aspect of running an affiliate marketing business is your ability to provide value that can help people make a purchasing decision. This is where the real potential lies, as the mistake beginners make in affiliate marketing is thinking it’s just about getting as much traffic as possible.

While that can help you make a quick buck, if you’re promoting bad products (or even good products) and not adding value, the traffic you worked hard to acquire will not stick around.

Marketing : To be effective at affiliate marketing, you have to attract people who are interested in what you have to offer. Creating a blog or your own YouTube channel and focusing on traffic from search allows you to attract an audience by putting in the work up-front, which can then bring in the right people for years to come.

Of course, the more work you put in (and continue to put in), the higher the potential.

Regardless of the platform you choose, your audience must know, like and trust you enough to buy the products you’re promoting. Once they do, they’re more likely to buy the products you promote, which will create affiliate commissions for you.

Sales : Once you bring qualified traffic to your platform of choice, your goal is to provide those people with the information they need to help them make the right purchasing decision. A common example would be doing a product review, which details your experience and thoughts on a given product or service.

Value delivery : While you may send your audience away to make the actual sale of the product or service, it’s still important to treat every person who visits your platform as highly-valued. An evergreen email funnel can allow you to maintain a relationship with them — as can more valuable content, to make additional purchasing decisions.

Resource : Affiliate Marketing For Beginners – What It Is + How to Succeed .

#3. Develop Mobile Apps

If you have the technical know-how, developing and monetizing an app is another way to build something once and sell it forever. Many apps are even monthly or annual subscriptions, where if you’re able to maintain a low cancellation rate, you can build a large source of consistent income.

Marketing : You’ll need an initial push to reach your target users or else your app will get lost in the jungle that is the App Store. Use tools like social media, news outlets or App Store optimization to make your app visible to the people who will benefit from it.

Sales : In the beginning, focus on overdelivering value while encouraging highly-satisfied users to leave reviews. An app with a lot of early five-star reviews can grow quickly with no other marketing, as the sheer size of the app store can help you increase your exposure,

Value delivery : Any software requires continuous development and support, but most of the code and beta testing will be done upfront. After that, you can add the occasional update or new feature to keep your app relevant and helpful to your users.

If your app solves a problem for your users and is good enough for them to share with friends, developing an app is a great way to leverage your technical skills into a passive income stream. 

Recommended reading : How I Made Over $70,000 Developing iPhone Apps .

#4. Start a Blog

Not every blog is a passive income stream. Blogging involves considerable work in the beginning, writing content, managing affiliate links, optimizing for search engine traffic and more.

If you want your blog to be one that’s largely set-it-and-forget-it, choose a blogging niche that’s evergreen: information that is both relevant and unchanging from year to year. 

For instance, a blog about optimizing your tax strategy would not be evergreen, because the tax code changes each year. On the other hand, one about dating tips would be evergreen, because things like being thoughtful and smelling nice will never go out of style. 

Marketing : Structuring your blog in a way that Google can find your posts (known as search engine optimization or SEO ) is key to gaining readers. You can also use platforms like YouTube — which is actually the world’s second-largest search engine — to drive traffic.

Sales : Ads and affiliate revenue are the two biggest sources of income for beginning bloggers . Once your email list and search rankings grow, you can add physical or digital products to boost your blog’s income.

Value delivery : Helpful, inspiring, motivational and educational content is a blog’s lifeblood. But that doesn’t mean you have to write every word on your blog. Upwork , Fiverr and many other freelancing websites are full of capable writers who can help you (passively) deliver value to your readers.

Setting up an evergreen blog (and the proper team to support it) will generate thousands in ad and affiliate revenue for years to come.

Resource : How to Start a Money-Making Blog .

#5. Create a YouTube Channel

Switch the time you spend watching YouTube videos to making your own and you can see a steady stream of profit from ad revenue.

Marketing : While there are over 2 billion YouTube users , the platform is a competitive place for content creators. Optimizing your thumbnails and titles for both YouTube and Google searchers gives you a two-for-one on driving traffic. Structure your videos as a series and cross-promote them to maximize your creative efforts. 

Sales : Unfortunately, it will take some steady work on the front-end to monetize a YouTube channel . Currently, Google requires 1,000 subscribers and 4,000 hours of watch time in one year before you’ll see money from the ads that run before your videos. If you pair a YouTube channel with a blog, digital course or affiliate marketing, you can double-dip with ad income from a video that drives traffic to another passive income stream.

Value delivery : Creating and editing clickable videos takes a lot of time, although the work can be delegated. Maximize the value delivery of your videos by creating evergreen content. A clip on how to build raised garden beds or a compilation of funny cat videos will be just as relevant in five years as it is now. YouTube favors videos with high watch time, so keep your content timeless.

People watch 1 billion hours of videos on YouTube each day, so this platform is a great opportunity to build passive ad income.

Related reading : Here’s how much YouTubers make + the best YouTube monetization strategies .

#6. Sell Designs 

Graphic designers and artists can print their art on all sorts of things (t-shirts, coffee mugs, tote bags, etc.) and gather passive income from the sales. Many print-on-demand (POD) sites like Etsy , RedBubble , Teespring and Merch by Amazon will take care of the printing and distribution process for you.

Marketing : Once you load and categorize your design, these sites will do some of the marketing work for you. You can get a boost, of course, by offering these products through your own site or social media. 

Sales : Since the website handles the printing, sales and shipping, you’ll only get a portion of the proceeds from each sale. Each site structures payouts and pricing differently.

Value delivery : The POD site should have its own customer service, so keeping your customers happy shouldn’t be too hard. You’ll need to keep tabs on what’s popular and keep your portfolio stocked with designs that appeal to today’s market, which can be delegated.

If you’re the creative type, print-on-demand sites are a great option to passively monetize your work — or just get more sales from artwork you’ve already created. 

Recommend reading : How to Make Money on Etsy: 5 Tips + 3 Big Mistakes .

#7. Write an E-Book

The popularity of e-books has been climbing steadily for years and is poised to continue to do so. Writing an e-book can provide passive income, and it also positions you as an expert in your field, which can lead to additional money-making opportunities (like selling courses).

Marketing : Affiliates are a great way to market an e-book, as are guest appearances on podcasts and sponsored blog posts. This content stays online for a long time, so if a person reads a blog post or listens to a podcast featuring your book two years after it has been released, they’ll still hear a plug for your product.

Similar to the app store, if you’re selling on Amazon, the goal is to get a surge of five-star reviews early, which will then get your book noticed more across the site.

Sales : If you sell your e-book through online bookstores like Amazon and Barnes & Noble, the sales and distribution process is largely automated through their websites. 

Value delivery : Readers will give you feedback on your book via online reviews, so you can make adjustments to your product in future editions if needed.

Writing an e-book is a great standalone passive income stream, and it dovetails nicely with having a blog, an affiliate marketing site, or another revenue source.

Resource : How to Self-Publish an E-Book on Amazon .

#8. License Music

Stock music is a great way for artists to generate income from things they’ve already made. Podcasts, radio shows, YouTube channels and other media need background music, and they license it from stock music libraries like AudioJungle and Pond5 .

Marketing : Choosing appropriate tags is key so that people searching for your variety of music are able to find it. If you’re using a website or social media to promote your brand and music, consider enlisting the help of a virtual assistant or social media manager so you can spend more time creating music and less time on the computer.

Sales : Stock music libraries take care of the sales and licensing process. There are different commissions for exclusive (listed in only one music directory) and non-exclusive (listed in multiple libraries) tracks.

Value delivery : Music websites allow your customers to preview your songs before they buy them. The music library facilitates the delivery system and downloading, so there isn’t much for you to do.

You probably won’t get famous or cut a record deal this way, but you will generate a reliable stream of passive income.

Recommend reading : How to Earn Passive Income as a Musician .

#9. Sell Physical Products

Many Amazon, eBay and other online sellers use dropshipping to automate their businesses. A dropshipper sells a product online (on their own website or on a large, existing marketplace like Amazon) but does not keep the inventory on hand like a traditional store would. Instead, the dropshipper places orders on behalf of their customers with the manufacturer or a third-party distributor of the product, who ships it directly to the customer.

See also : How to start a dropshipping business .

Marketing : If you sell through Amazon or eBay, they’ll take care of much of the marketing. You’ll just need to properly categorize and tag your products, as well as create thorough, accurate descriptions so they can show up in search results. If you sell on your own website, you’ll need a plan to attract customers through ads or social media.

Sales : Online marketplaces will take a cut of your earnings, but that’s a fair exchange for all the publicity you get and for taking care of the sales transaction. By setting up a Shopify or other e-commerce store, you can automate the sales process on your own site as well. 

Value delivery : You’ll want to keep a pulse on how well your distributor is filling orders. Delays in shipping or sub-par products will tarnish your reputation and hurt your business. You can outsource some of your customer service to a virtual assistant to make your business more passive.

Just because you sell a physical product doesn’t mean you can’t set up your business to be passive. 

For more information, learn which items sell best online .

#10. Sell Stock Photos

Are you great at photography? Millions of blogs, news outlets, social media accounts, and more are searching for stock photos every day. Sell yours through a stock photo site to make some money while you sleep.

Marketing : The best marketing for your photos will be done before you take them. Do some research to see what people are searching for, then take photos that fill their needs. A photo of people in business casual at a board meeting may not be sexy, but businesses will buy that photo over and over. Be sure to tag your pictures appropriately so internet searchers will find your photos.

Sales : Stock photo sites like Dreamstime , Adobe Stock and Getty Images will give you a commission each time your photo sells. You can sell the same photos over and over to different buyers.

Value delivery : The stock photo sites take care of the licensing, monetary transaction and downloads for your users. 

If you’re the creative type and good with a camera, selling your stock photos is a fantastic passive revenue stream. 

Resource : How to Get Paid to Take Pictures with Your Phone .

Bonus: Rent Out Your Assets

What better way to make money than to rent out things you already own?

Peer-to-peer lending sites allow you to do just that. Here’s how to make money from things you have while you’re not using them.

• Home : Airbnb , VRBO and other vacation sites allow you to rent out your home (or bedroom) to vacationers for a few days. Learn more in our guide to starting an Airbnb business .
• Car : Your car sits in a parking lot or driveway for most of its life, but it can make you passive income if you rent it to others on Turo .
• Parking : Allow others to rent your driveway or parking space on Spacer and SpotHero .
• Storage : Sites like StoreAtMyHouse and Neighbor allow you to rent storage space in your home, shed, basement or garage to people and businesses. Think Airbnb, only for storage. You can learn more about the pros and cons in our Neighbor review .
• Boat : When you’re too busy to use your boat, rent it out on GetMyBoat , Boatsetter or Click & Boat to turn your toy into a passive income stream. 

Passive Income Business Ideas: Closing Thoughts

Every human on planet Earth has only 24 hours in a day, so there is only so much time you can devote to making money. 

By leveraging passive income ideas , you can expand your earning power because you’re no longer trading hours for dollars.

Creating passive income can take many forms. It involves anything from creating and selling a digital product to just making a little cash off of something you already own. 

If passive income is new territory for you, start small and in an area where you have some expertise. Choose one or two passive income streams to create. Once you put forth the initial effort and investment, the revenue will flow to you with little effort on your part.

And if these businesses seem like more than you’re looking for, try some of the best passive income apps ; they won’t make you nearly as much (we’re talking about a little extra spending cash), but they also take minimal time and effort.

Leave a reply Cancel reply

Your email address will not be published. Required fields are marked *

Comment Read our comment policy.

A Message From Our Founder

Welcome to The Ways To Wealth. I founded this site to help make a difference in people's lives by delivering objective, reliable advice and recommendations that help them make more money, save more money, and invest wisely.

• Money Management
• Debt Payoff
• About The Ways To Wealth
• Media & Advertising
• Privacy Policy

Latest Posts

M1 review (2024): a fantastic all-in-one investing choice, how to build credit at 18: six smart tips, infinite banking explained: how it works and should you do it, arrived vs. fundrise (2024): pros, cons and what’s best for you, 11 ways to get free walmart gift cards (2024 update), popular tags.

• Reading Lists

The 18 Most Profitable Passive Income Streams

By Theresa Bedford

Published on Nov-10-2021

Updated on Jun-14-2022

Creating several passive income streams is a dream for many people. It can accelerate plans to make extra income, pay off debt, and invest in building wealth. But what exactly is passive income? Are these streams truly passive? What can we do to begin tapping into this hidden stream of profits? Read on to find out how you can start producing passive income today.

What Is Passive Income?

Who doesn’t want an extra source of income or some extra cash to splurge here and there? Well, passive income is the best income stream that you can have. It’s cash flow without considerable effort.

Passive income streams is all about money making money 24/7 . You know the famous make money while you sleep idea. It’s about buying money-producing assets and investing time to build products that generate income without future effort.

Your ability to generate an income, become rich , and accumulate wealth is infinite. Sure, you may have to find multiple passive streams to keep it going depending on market cycles and economic conditions. But it’s there for the making. There are two main ways to generate passive income: purchasing and creating assets that earn money.

Truly Passive Income Streams: Purchase and Forget It

Passive income that is always passive is usually found in the form of investments. With this type of income, you make a purchase and forget it. Therefore, you don’t have to devote time or energy to generate money from these passive income streams. 

• Income From Stocks

There are two main ways to make money from stocks . First, you can start investing. Purchase and forget it. Then make money when you sell the stock down the road through capital gains. That isn’t a continuous form of income, but it can come in handy when you’re ready to retire.

On the other hand, you can see regular passive income in the form of dividends from dividend stocks. Here, dividends are directly paid to you in cash, but you can reinvest the dividends. Large and well-established companies usually offer dividend-paying stocks with profits that they want to return to shareholders. As a bonus, these stocks may be less risky and less volatile than growth stocks.

Although you may choose to buy dividend stocks individually from well-known companies, you can also find them in index funds and exchange-traded funds (ETFs) as a group of stocks that mimic the market or industries. This form of investing minimizes risk by diversifying investments while still offering regular income through dividend stocks.

Some investors may argue that income from dividends isn’t a type of passive income streams. But I argue it’s passive because you don’t have to actively do anything to make it. 

• A Bond Ladder

A bond ladder is a portfolio of multiple bonds that mature at different times. When the bonds mature, you can reinvest the returned principal in new bonds and start a new ladder or continue adding on to your current one.

Bond ladders provide current income while limiting rate risks. Investors can have predictable passive bond income depending on maturity dates. However, bond ladders may need to be re-balanced depending on rate changes over time. Investors should consider different types of bonds when creating their portfolio for passive income with bonds.

• Income From Interest

You can earn passive income with interest when you loan money to someone else. For example, you can loan banks money in the form of a high yield savings account, and you can lend businesses money in the form of bonds. But you also earn interest when you loan money to peers.

Peer-to-peer loans are personal loans between you and a borrower using third parties like Peerform, Upstart, Lending Club, Funding Circle, or Prosper. You have to keep in mind that peer lending is high risk due to the unsecured nature of the loans. But with higher risks, you’re likely to make more interest than using high-yield savings accounts.

Rental properties are expensive and time-consuming. If you love real estate but don’t feel like putting in the work or money to flip or manage properties, check out real estate investment trusts (REITs). Real estate investing with REITs is like buying and selling stocks on major stock exchanges. These funds include commercial real estate, movie theatres, apartments, office buildings, and more. 

• Invest In Crowdfunded Real Estate

Invest in real estate without buying property through crowdfunding real estate platforms. These platforms connect investors to real estate investment properties. Money is pooled together to buy multifamily properties, commercial or retail properties, office buildings, single-family homes, and more. In addition, investors collect passive income through the form of dividends. 

• Rent Your Parking Space

There’s nothing like owning a piece of asphalt that can make you some easy money. Renting out your parking space in crowded cities where parking is precious can earn you a few hundred extra dollars a month. Of course, location matters, but size can also be important. Some renters may be willing to pay more for lighting, security, electric charging stations, and cameras. Check out third-party platforms like CurbFlip, SpotHero, or ParkingCupid to look for renters. Just keep in mind they may take some of your profits while serving as the middleman.

Passive Income Streams that Requires Upfront Work, Then Becomes Passive 

Despite its name, passive income is rarely 100% passive. Instead, many passive income streams take upfront planning and work to produce a continuous money flow.

• Income From Royalties

Earning passive income from royalties is more popular than you might think. It’s the money you earn as people pay you for a percentage of the sales of your intellectual property. It can be anything like copyrighted music, pictures you sell on a stock photography platform, books, or more. Royalties are paid every time a third party sells your creation. And if you get famous enough, your name can earn royalties too.

Although freelance writing may not be passive income, writing a book once could be. 

• Income From Publishing

Of course, if you want to put in a little extra effort, you can publish books and music yourself instead of earning money from royalties. You’ll make a more significant profit because you’re removing the third party from the equation. The process is also faster than working with publishers and agents because you’re making the calls. Only you can weigh the pros and cons of working with a larger agency. 

• Income From Patents

Do you have the next best solution to the world’s biggest problem? If so, patent the invention and start a stream of passive income. Once you have the patent, you can create the product and sell it or license your patent to be produced by someone else who can then sell it. You’re the brainchild, but you don’t have to do much work when you license it. You can also sell patents if the price is right or used as collateral for loans.

• Income From Affiliate Sales

Affiliate marketing is becoming one of the most popular passive income streams. According to PayScale, the average base salary for affiliate marketers is $51,788 per year. Affiliate marketers promote products through email marketing, social media, or paid advertising for various products. Once marketers have built a large audience, they spend less time promoting the products. It only takes a few high ticket items and good blog posts or email evergreens to make a noticeable passive income.

• Create An App

Who hasn’t used an app? Very few people, that’s who. Mobile apps can create millionaires overnight or at least a few extra thousand for the right person. If you have a knack for coding and programming , maybe it’s time you create an app to make money online. Once you publish it, you’ll earn passive money for quite some time. Even if your app is free to use, you can make money through advertisements.

And don’t worry about the time you’ll have to invest later to update the app. You might make enough to hire someone to help down the road.

• Advertise On Your Car

If you’re looking to make some extra money while doing all the things you usually do, try advertising on your car . Think of making money on the commute to work or while running errands. If nothing else, you’ll offset the costs of gas while getting things done. Check out companies like StickerRide, Wrapify, Carvetise, Free Car Media, and ReferralCars for some car-related passive income streams.

• Create A Blog Or YouTube Channel

Become a content creator to make passive income online with a blog or YouTube channel. You can generate revenue through advertising, affiliate marketing, and sponsored content. Of course, there’s a lot of upfront time invested. However, you only have to write an article or make a video once with blogging and YouTube, even though the article or video has traffic multiple times over. Once you establish a community and rank content with high traffic, you can outsource more to grow without doing the work. That’s less and less on your effort and time over time.

• Sell Designs Online

Now is prime time to sell your graphic designs and artwork online. Bloggers, store owners, virtual assistants, influencers, and others need graphic designers to help market and promote their products. You may find that you enjoy designing templates for social media or website designs, or maybe you create cute shirt designs. Your imagination is your only limitation.

You can sell your designs directly on sites like Etsy, Creative Market, or a personal website. You could also try building a membership community where people can access all of your designs for a monthly or yearly fee. Selling designs online requires a little upfront time investment, but you can put it on autopilot once the work is done creating additional passive income streams.

• Purchase A Blog

Everyone knows that blogs can generate money through advertising and products. But sometimes, people don’t want to build a community, which can sometimes take years. You can buy a blog that is already established for 2-3 times its annual earnings to get a head start on owning a successful blog. It will probably take a few years to see a return on your capital, but it shouldn’t be a problem if you keep the blog well maintained. You may even run an email program to the already established email list that regularly sends visitors to your site. Blogging is another one of the most popular passive income streams today.

• Create An Online Course

Put in a little work to create a course or product and watch the money steam in without much more effort from you. While this form of income does require you to have a strong brand and presence, it’s still doable. You can successfully earn passive income for a significant amount of time after you create an online course. People are looking for systems that teach them everything from exercising and losing weight to stress management and personal finance. There’s something for everyone. What’s your passion? What can you teach the world?

• License Your Photos

If you’re the sole owner of your photography, you can consider licensing your work for commercial use, non-commercial use, exclusive rights, non-exclusive rights, one-time use, or creative commons. Every time someone purchases a license, you get a kickback even though you only had to take the picture once. It took a little upfront work, but the return can be infinite.

• Start An ATM Business

Have you ever wondered who owns the ATMs you see in the gas station, movie theatres, restaurants? Well, it’s probably everyday people like you. You can purchase an ATM and set it up anywhere to collect passive income. Starting a passive business with ATMs is simple. You’ll need to find a location, set up a contract with the business owner, and stock the machines regularly. You’ll have to share some of the ATM fees you receive with the business owner and the ATM processor, but the rest is yours, and you only have to put in a little work to get it.

Final Thoughts

It’s essential to have different streams of income. So, if you genuinely want to generate passive income, look for ways to make money without big-time commitments and work. Building a steady income stream may take a little time, but it’s worth it.

Imagine building wealth and financial freedom with relatively little long-term effort. This list of 18 passive income ideas is a perfect first step to generate more income and additional revenue with multiple income streams for years to come.

This post originally appeared on Savoteur .

• Side Hustles
• Power Players
• Young Success
• Save and Invest
• Become Debt-Free
• Land the Job
• Closing the Gap
• Science of Success
• Pop Culture and Media
• Psychology and Relationships
• Health and Wellness
• Real Estate
• Most Popular

Related Stories

• Side Hustles 33-year-old makes $14,600 a month in passive income:   'I work just one hour a day’ on my business
• Earn This 24-year-old makes $8,600 a month in passive   income—and works 'just 2 hours a day.' Here's how
• Side Hustles This 38-year-old makes $160,000 per month in passive   income: 'I work only 5 hours a week now'
• Six-Figure Side Hustle 23-year-old's side hustle brings in   $124K/year: 'You can start with $5'
• Side Hustles How this 23-year-old built a side hustle   that brings in $10,300 a month

36-year-old brought in $77,000 in passive income from Etsy in 2023—she spends 5-10 minutes per day on it

After years of building out her successful Etsy store, Rachel Jimenez is now focusing her efforts on other projects . The store features printables like Elf on a Shelf games for Christmas and has made six figures in passive income in past years. She founded it in 2019.

Etsy brought in $77,000 in passive income in 2023, with Jimenez working just "five-to-ten minutes" per day or so checking messages, she says. That, plus some of her and her husband's other moneymaking efforts made her realize she could start being pickier about her projects.

In considering her "now what," Jimenez realized she wanted to focus on projects that could both "have a bigger impact and help people," she says, like her blog and newsletter.

Here's how the 36-year-old is sharing her wealth of knowledge and building out her content, including how much each venture brought in last year, pre-tax.

'Optimize Your Life Academy' brought in $12,250

In early 2023, Jimenez released a virtual course about positive psychology and its ability to bring about success, "Optimize Your Life Academy." That brought in about $12,250 in 2023 altogether.  

She publicizes it through various online efforts like email blasts and a free webinar she released. "I still have that funnel setup," she says. "And so it's still bringing leads in and people are still buying the course." She charges $297 for it.

DON'T MISS:  The ultimate guide to earning passive income online

In September 2023, Jimenez also launched another course, "Passive Income 101," about what passive income is, how to start a passive income business and how to invest. Thus far, she's only let the people receiving her newsletter know about it. She charges $97 for it and made about $900 from it last year.

Affiliate links in her blog brought in $24,000

Jimenez started her blog in 2019 and her weekly newsletter in October 2021. Both cover topics such as passive income, personal finance and positive psychology.

"I will say my blog, some weeks I miss," she says about trying to keep up her posting routine, "but my newsletter I am proud to say I have not missed a week." The newsletter is free and comes out every Thursday. It now boasts more than 8,000 subscribers, she says.

Altogether, the two take about four hours to write per week. The blog makes money through affiliate links and brought in about $24,000 last year. The newsletter makes money through ads and brought in more than $1,500.

Jimenez is currently working on sharpening her marketing skills to grow her audience in both. "Pinterest has always been a black box for me," she says, so she's currently taking a course about "how to use that to drive more traffic to blogs."

Teaching brought in about $10,450

Finally, as of summer 2023, she's teaching classes as an adjunct professor at Mt. San Antonio College.

Over the summer, she taught three: home-based business I, home-based business II and a mobile technology class teaching the basics of cell phone use like texting.

This semester, she's down to just one, home-based business II, which focuses on marketing your business. She works three hours per week and makes $66 per hour. Last year she brought in about $10,450.

The classes give her an opportunity to talk to a potential audience of her content. "I can guess at what their problems are," she says, "but when I have conversations with real people, that's the best market research you can do."

Want to make extra money outside of your day job?  Sign up for  CNBC's new online course How to Earn Passive Income Online  to learn about common passive income streams, tips to get started and real-life success stories. Register today and save 50% with discount code EARLYBIRD.

Plus,  sign up for CNBC Make It's newsletter  to get tips and tricks for success at work, with money and in life.

• Top Stories
• Stock Market
• BUYING RATES
• FOREIGN INTEREST RATES
• Philippine Mutual Funds
• Leaders and Laggards
• Stock Quotes
• Stock Markets Summary
• Non-BSP Convertible Currencies
• BSP Convertible Currencies
• US Commodity futures
• Infographics
• B-Side Podcasts
• Agribusiness
• Arts & Leisure
• Special Features
• Special Reports
• BW Launchpad

• Editors' Picks

Filinvest Development targets 20% annual income growth in 5-year plan

GOTIANUN-LED conglomerate Filinvest Development Corp. (FDC) said it is aiming for at least 20% annual growth in net income over the next five years.

“What we’ve announced is a four- or five-year plan of at least 20% annual growth,” FDC President and Chief Executive Officer Rhoda A. Huang said during a media roundtable last week.

This year, the FDC is hoping to reach or exceed the company’s pre-pandemic net income of P12 billion, she said.

  In 2023, FDC’s attributable net income climbed by 58% to P8.9 billion as total revenues and other income increased by 31% to P92.8 billion.

According to Ms. Huang, the previous operating year saw robust growth across all business lines, attributing the performance to a renewed focus on business fundamentals. FDC reported revenue and other income growth in its banking segment at 35%, real estate at 20%, hospitality at 77%, power at 35%, and sugar at 16%.

Ms. Huang also said that FDC is “well-positioned” to take advantage of improving economic data.

 “When you look at controlled inflation, interest rates are coming in, there is a drive in terms of a consumer-led economy. I think it is very positive,” she said.

 On Monday, the Bangko Sentral ng Pilipinas maintained its benchmark interest rate at 6.5% for a fourth consecutive meeting. The country’s inflation rate rose to 3.7% in March, up from 3.4% in February, driven by elevated food prices.

 “We’re well-positioned. Despite the high interest rates, the ability to sell, in terms of sales and revenue for Filinvest Land, Inc. (FLI), there is still a shortfall in available housing in the low to medium segment,” Ms. Huang said.

 “We see greater receptivity below the P3.6 million price range,” she added.

 She also noted that the conglomerate is keeping an eye on certain risks, such as US interest rates and geopolitical tensions.

The company has allocated between P20 billion and P25 billion for its capital expenditure (capex) budget this year. It invested P13 billion in capex in 2023.

FDC Chief Finance Officer Brian T. Lim has said that 60% of the budget would be allocated to real estate, 15% to renewable energy, another 15% to hospitality, with the remaining 10% allocated to other businesses. FDC’s ongoing renewable energy projects include a 20-megawatt (MW) solar energy project in Misamis Oriental and a 12-MW solar energy project in Cebu.

FDC’s expansion in the hospitality segment includes the ongoing construction of the 200-room hotel in Baguio City under the Grafik brand, which will open in the first quarter of 2025.

FDC is also renovating and expanding its Crimson Mactan Hotel, according to Ms. Huang.

Aside from FLI, FDC is engaged in real estate through Filinvest Alabang. The conglomerate also has presence in the power sector via FDC Utilities, Inc., as well as in the hospitality business with Filinvest Hospitality Corp.

 At the same time, the holding company is involved in the banking sector through East West Banking Corp., as well as in the sugar and infrastructure sectors.

FDC shares were last traded on April 8 at P5.51 per share. — Revin Mikhael D. Ochave

RELATED ARTICLES MORE FROM AUTHOR

FDI net inflows surge in January

PHL doubles efforts to finish rail projects as traffic hurts growth

RRR cut unlikely by 3rd quarter — BSP’s Remolona

Food security strategy to consider imports a ‘last resort’ measure

Pcc clears robinsons retail-rose pharmacy deal, shares drop further on inflation data, virus fears.

Student-loan forgiveness through Biden's new repayment plan faces another lawsuit from 7 GOP states

• Another group of GOP states filed a lawsuit to block the SAVE income-driven repayment plan.
• The lawsuit argued the SAVE plan diminishes the value of PSLF and harms MOHELA's revenue.
• It's the second lawsuit so far to block the student-loan repayment plan.

Another lawsuit to block President Joe Biden's new student-loan repayment plan has arrived.

On Tuesday, Missouri's Attorney General Andrew Bailey led six other GOP states in filing a lawsuit to block the new SAVE income-driven repayment plan. The lawsuit argued that the plan, established in July 2023 to give borrowers more affordable monthly payments, is unconstitutional and is in "defiance of the Supreme Court" decision that blocked Biden's first attempt at broad debt relief at the end of June.

Specifically, the Education Department implemented a provision of SAVE ahead of schedule in February: $1.2 billion in debt relief for 153,000 borrowers who originally borrowed $12,000 or less and made as few as 10 years of qualifying payments.

Related stories

That provision was originally set to be implemented in July, and the lawsuit said there is "no justification for the early implementation of this provision."

"This latest attempt to sidestep the Constitution is only the most recent instance in a long but troubling pattern of the President relying on innocuous language from decades-old statutes to impose drastic, costly policy changes on the American people without their consent," the lawsuit said.

This student loan lawsuit is personal for me. I paid for my education in blood, sweat, and tears in service to my nation, as did so many others. It’s a slap in the face to every working American to be left with the tab for someone else’s Ivy League debt. pic.twitter.com/E67qx1RMsP — Attorney General Andrew Bailey (@AGAndrewBailey) April 9, 2024

This lawsuit comes just a couple of weeks after a separate group of 11 GOP state attorneys general filed a lawsuit also targeting the SAVE plan. An Education Department spokesperson said at the time that the department doesn't comment on pending litigation. However, the spokesperson noted that "Congress gave the US Department of Education the authority to define the terms of income-driven repayment plans in 1993, and the SAVE plan is the fourth time the Department has used that authority."

One of the key distinctions between Bailey's lawsuit and the other lawsuit to block SAVE is Bailey's argument that the SAVE plan would hurt the revenue of student-loan company MOHELA, which is based in Missouri.

It's a similar argument to the lawsuit Biden v. Nebraska, which the Supreme Court ruled had standing to strike down Biden's first broad debt relief plan. Missouri was one of the plaintiffs in that lawsuit and argued that any debt relief would harm MOHELA's revenue because it would service fewer accounts under any loan forgiveness.

"The Supreme Court determined that MOHELA suffers financial harm whenever loans that it services are discharged," the lawsuit against SAVE said.

"So when student loan balances go to zero, as they will under the Final Rule, MOHELA will lose the revenue from servicing those loans," it continued. "Thus, by accelerating the forgiveness timeline for the typical borrower by as much as 15 years, the Final Rule imposes financial harm on MOHELA, and thus the State of Missouri, by depriving MOHELA of up to 15 years in servicing fees."

The states also argued that the SAVE plan diminished the value of the Public Service Loan Forgiveness program, which forgives student debt for government and nonprofit workers after 10 years of qualifying payments. It said that due to the generosity of the SAVE plan, fewer borrowers will enroll in PSLF, thus undermining states' recruitment efforts into the public sector.

This lawsuit follows Biden's release of new details for his broader student-loan forgiveness plan, which is set to benefit over 30 million borrowers . While that plan will not be implemented until the fall, at the earliest, Bailey wrote on X on Monday that lawsuits will likely come: "See you in court."

Watch: Why student loans aren't canceled, and what Biden's going to do about it

• Main content