EP 060: The Three Types of Income (And My Eight Types of Personal Income Revealed)

...and in this episode, I am going to reveal my personal 8 streams of income, and the 3 categories they fall into. 

Everyone makes income in 3 different categories, and one of them is more important than the other. 

Audio Only Version:

You can also listen on Spotify, iTunes and Stitcher 

Video Version:

This is the "Money, Markets, and Mindset" podcast and blog post... and with this one, we are going to focus on that first word: MONEY. 

I often get asked what my biggest revenue stream is - YouTube, my actual trades in the stock market, the business... 

I also get asked how long it takes how long it takes to become a "full-time trader". 

What do those have to do with each other?

Well it shows the bigger question here...

And it's not necessarily how much I make, or how much you need to make to go full time.

The bigger question is: 

How many streams of income do you have?

The average millionaire has seven streams of income! 

I want to break down the streams I use personally and hopefully that will open up your eyes to some ideas of what you can do and how they all play into each other, instead of putting all your eggs in one basket. 

There are certain factors with each avenue of income that you can't control. 

For example, in the stock market, sometimes you can't control how long it takes for a trade to mature. So to view that as your one and only job - with no other sources of income - can create unnecessary stress. 

This is what most people are familiar with - income directly from putting in hours or as most people like to call it "a job". 

And this pretty much just means: 

You trade hours in for money. 

Whether your job is labor intensive or you sit at a desk all day... this is your job. This is earned income. 

Now let's get into some areas that many people aren't familiar with... 

This is income generated from a sale from an asset (assuming you purchased the asset at one price and were able to sell it for a higher price).

This would include stocks, options, buying and then selling a house, etc. 

THIS is one of my favorites...

This is income that you do not actively have to earn - you do not need to participate to make money from it. 

For example, this would occur with a rental property. 

Let's say you buy a place and then fix it up. When you are finishing and then rent it out, you get a check every 30 days. 

You only had to buy it and fix it up once. Now you are passively collecting that income. 

Another form of passive income is royalties from music or a book - you record or write it once but you passively collect the royalties. 

This could also come from courses or education - for example, I recorded my module courses ONCE and then people have been able to purchase it since then (besides updates that we do to ensure it is up to date). 

Let's start with the obvious. 

I am a stock and options trader. 

This would fall under category #2 - portfolio income because I buy the asset (stocks and options) at a lower price and then sell it for a higher one. 

What I love about portfolio income is - you can actually do something else while it is working for you. You do NOT need to sit and watch the stock market all day (especially the way I trade). 

This also shouldn't come as a surprise...

I sell courses inside of Power Trades University. 

I took my over-18-years of trading in the stock market, packaged it, bottled it up, and conveyed the education the way I wish I were taught when I was learning about the stock market. 

Selling courses is a form of #3 - passive income. 

I recorded it once (and yes we update it often)... and after it is recorded, it runs itself. I do not need to re-record it EVERY time someone purchases the course. It is already ready for them. 

Also inside of Power Trades University, we have members that pay either monthly or annually to see the types of trades I am looking at and get coached to how to potentially buy/sell them themselves. 

This would be in the #1 category - this is earned income. 

Every week I show up for 2 hours in our live online training sessions, not to mention our incredible extra bonuses like our Master Classes and Hot Seat sessions... as well as participating in the online discussion forums every day assisting members with their trading questions. 

I am actively working and participating and earning that income. If I stop coaching, showing up, analyzation, etc... then obviously no one would pay for that membership. 

Inside of YouTube, people who create content are considered "creators". 

And as creators produce content, advertisers are shown before this content and you get a percentage of that ad. 

This is #3 - passive income category. 

How many times did I record the YouTube video? Once. 

As the ads get shown in front of it, you still get paid for something you recorded awhile ago.  

Affiliate marketing is the process of recommending something you use and had a positive result, and for recommending this product the company pays you a commission rate when someone else buys it because you recommended it. 

Perhaps a workout enthusiast recommends a protein shake on his social media, and he may have partnered with the creator of the shake and gets a commission anytime someone buys it from his social media. 

It helps the workout enthusiast, it helps those who purchase it because he/she is a believer in the product, and it helps the company who made it by getting more sales and getting their brand out there. 

I do some affiliate marketing - if there is a product I love I will recommend it. 

To an extent, affiliate links are passive income (#3) because I only recorded the recommendation video once, and any time someone purchases the product I still get that commission. 

I have a "networking event" company for events around Metro-Detroit. Right now we average about 80-100 people at the events and charge cover at the door, as well as sponsorships. 

In this business we provide value and a space for people to connect businesses and network. It would fall under #1 category because I have to actively work in order to create revenue. 

Because of my other businesses, I have been able to learn how to run ads, how to market, how to YouTube, set up the backend of a business online. 

There are times other influencers, creators, or entrepreneurs will ask me how I have handled my business or will ask me to consult for them. 

This would fall under the #1 category of "earned income" because I will work and consult for someone's business in exchange for a fee. At that time, they would be considered my boss because they cut the check. 

This is something VERY new...

I recently got my real estate license!

I am looking to get into hard money lending, fix-and-flips, investment properties, and lots of incredible stuff this license will allow me to do. 

I could potentially broker my own deals and collect commissions. 

Depending on which strategy I chose to use, this would fall under the #2 and #3 categories of types of incomes. 

We started this off because people ask me two questions:

"What is your main source of income?" and "How long does it take for me to trade full-time?"

But the REAL question is:

"How can you mix the types of incomes so you have multiple streams of income (like most millionaires)?"

And THEN you can determine how much you need from each category of making money so you can replace the current way you make money. 

Because if you are brand new to stock trading... 

You can't control every aspect of the stock market. 

Sometimes it takes longer than the pattern predicts or some world event occurs. Of course there are strategies to minimize risk and maximize profit... But there still are those factors. 

There have been times in the past where I haven't made any money all year long and then in months 11 and 12 I make my $100K-$200K. 

But what if I had NO other means of income? What would I have done for those 10 months? 

I do not have to lean on one stream of income to provide for my family. 

So when you think about going full-time, 

you need to think about multiple ways to supplement your income. 

When it comes to myself, it really depends on the year where I make more money. Some years I make more in the business, and sometimes my investments do better than my business. 

And it doesn't matter which one does better... what matters is I have a combination of multiple streams of income to take care of me and my family. 

And you may be thinking, "Okay now I need to start a YouTube channel". 

Slow your roll. 

My number one thing I recommend getting started with?

THE STOCK MARKET. 

And it isn't because I sell courses about it...

It's because the stock market will allow you still work your full time job and you don't need to be in front of the computer every day - and you don't have to quit. 

The businesses I own took time, money, effort, and so much more to start and run. 

You can get started with very little time and money in the stock market. 

AND you probably are already in the stock market because you have a 401k. 

I didn't start a business on how to start in the stock market first... the FIRST step was that I was already a successful stock trader. 

Think about how you can create multiple streams of income, and how starting in the stock market is the simplest one to do.