Step 36: Income stream 4: Capital Gains

Step 36 of the 100 steps to financial independence: Income strem 4: Capital gains
Step 36: Income stream 4: Capital gains

The fourth income stream that we’ll look at is that of capital gains. Whether or not you feel like working towards developing this income stream or not (some people don’t), capital gains in a key source of income to many people.

Capital gains are the profits one makes when selling something at a higher price than the original purchase price they paid. The difference with profit income is that profit income comes from something you made or created over time as part of your regular business activity, whereas a capital gain involves an original investment, and then the value of this investment increasing over time, but not a result of a regular business activity. Continue reading

Step 34: Income stream 2: Profit Income

Step 34 of the 100 steps mission to financial independence: Income stream 2: Profit Income
Step 34: Income stream 2: Profit Income

Where step 33 described the features, (dis)advantages, and possibilities for change of an earned income, we are now going to look at profit income. A profit income is the money you get when you have a company (which can be anything from an Etsy shop where you sell handmade things to a multinational company) and are able to sell your products or services above the cost price thereby taking (some of) the profits as earnings.

Many people dream about having their own company, and although this can indeed be a lucrative project, being an entrepreneur also requires a lot of hard work, and often at least a few years before a company starts making a profit. It furthermore involves a lot of new skills, quite a bit of risk and a lot of perseverance, so the life of an entrepreneur isn’t always as rosy and making a profit income isn’t always as straight forward as it might seem. (You can take my work for this, I have some experience..). Continue reading