7 Income Streams That Make Millionaires Rich

7 Income Streams That Make Millionaires Rich

Andrew Lisa   Mon, May 1, 2023

You can tell a lot about how rich people make their money by looking at their taxes -- which is probably why they work so hard to keep people from nosing around in their returns.

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The IRS gave regular people a glimpse into that insulated world in 2015 when it published the results of a research study titled, "Over the Top: How Tax Returns Show that the Very Rich Are Different from You and Me."

It remains the most comprehensive examination of how rich people get and keep their fortunes. It used estate tax data dating back decades, specifically from Form 706, the United States Estate (and Generation-Skipping Transfer) Tax Return.

If your estate's executor isn't planning to file one of those on your behalf after you die, you probably need to keep saving.

The study's findings revealed seven income streams that millionaires -- and even richer people with real money -- tend to have in common. Are you looking to turn on a new financial faucet in your own life? If you want to get rich, the following various income streams of millionaires are a good place to start.

Capital Gains From Appreciated Assets

Many people face the familiar problem of wanting to buy a giant social media company to assert control over the national dialogue without upsetting their day-to-day cash flow.

Elon Musk faced this very dilemma in when he needed cash on hand in case his now-infamous Twitter deal went through. He solved the problem by selling roughly $7 billion of his Tesla stock, which he exercised the option to buy for pennies on the dollar as part of his compensation package.

While it's not exactly an income stream, millionaires buy and hold appreciating liquid assets like stocks because they can convert them to cash any time they need an infusion of capital.

Dividend Income

Once Elon Musk sold his shares, they were gone forever unless he decided to buy them back.

Dividend stocks, on the other hand, let millionaires have their cake and eat it, too, by making regular payments to their shareholders without requiring them to sell. As the stocks appreciate over time, the dividend payments get bigger. Like the goose that lays the golden egg, dividend stocks are the ultimate passive income stream -- and if you ever need a shot in the arm, you can also sell the goose for a lump-sum windfall.

Interest Payments

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