2 Millionaires Reveal 7 Lucrative Income Streams You Can Use, Too
Making more money usually starts with a familiar equation: Work more and earn more. For many wealthy people, however, the equation eventually changes. Their income grows, not from additional hours but owning businesses, investments and other assets.
Austin Hankwitz and Robert Croak, multimillionaire entrepreneurs and cohosts of the Rich Habits Podcast, where they recently offered two examples of that progression. Croak, best known for creating Silly Bandz, has spent four decades building businesses, while Hankwitz began his career in mergers and acquisitions before becoming an entrepreneur and investor.
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“No millionaire started with seven streams of income,” Croak said. “We start with that earned income and we work our way up.”
Here is how Hankwitz and Croak built those seven income streams, starting with the money they earned from working.
1. Earned Income: The Money That Starts It All
A salary, hourly wage or freelance income is where most wealth-building begins, but Croak’s approach was to treat it as starting capital rather than the finished product. Earned income once accounted for all his monthly income. Today, it represents roughly 10% to 15%. Hankwitz estimated his at 20% to 25%.
The key is keeping some of what is earned. What remains can go toward savings, investments or building a business.
“The goal is not to maximize earned income forever,” Croak said.
The first move, then, may be putting some of that income toward assets that can eventually produce income of their own.
2. Business Income: Separating Money From Hours
Federal Reserve data found that nearly half of families in the highest income decile owned a privately held business in 2022. Business income breaks the link between hours worked and money earned. Products, employees or systems can allow a business to grow beyond one person’s time. Croak did this through businesses such as Silly Bandz, which at its peak generated millions in annual profits. Hankwitz grew service businesses by hiring employees.
Croak suggested aiming for $500 to $1,000 in monthly profit, perhaps by turning an existing skill into a product or building a service that can eventually grow beyond the owner’s own workload.
3. Interest Income: Put Idle Cash to Work
“That’s money that I earned in interest income for not doing anything differently. I just had cash parked in the right places,” Hankwitz said about the nearly $15,000 in interest he had earned over three to four years.
He generally keeps $30,000 to $50,000 earning interest across his emergency savings and investment portfolio. The principle works with smaller balances. Before trying to earn more, check what existing savings are earning.
Cash sitting in a regular checking or savings account may earn little interest. A high-yield savings account or short-term U.S. Treasury investment could help that money earn more. A certificate of deposit (CD) pays interest on money held for a set period, though withdrawing it early may result in a penalty, according to Chase.
4. Dividend Income: Getting Paid for Ownership
Once savings become investments, ownership itself can begin producing income. Dividend-paying companies distribute some of their earnings to shareholders. Croak said he has shifted more of his portfolio toward dividend-paying stocks and funds as he has gotten older. Hankwitz reinvests those payments through a dividend reinvestment plan (DRIP).
“Over time you now have more shares of stock that’s going to pay you more in dividends,” Hankwitz said.
Owning more shares can potentially increase dividend income over time, although companies can reduce or eliminate payments.
5. Capital Gains: Where the Big Paydays Can Happen
Some of Croak and Hankwitz's biggest gains have come when assets they owned increased in value and were eventually sold.
“The sale of a single business can generate more wealth than 20 years of earned income,” Croak said.
Hankwitz sold a newsletter business he'd co-founded, for seven figures. The same principle applies to a stock or fund bought for $1,000 and later sold for $1,500, producing a $500 capital gain. The IRS typically classifies gains on investments held for more than one year as long-term, which may be taxed at lower rates than short-term gains.
6. Real Estate Income: Combining Cash Flow and Appreciation
Croak’s first real estate investment was a four-unit property. He lived in one unit and collected rent from the other three, helping cover his housing costs while building an asset.
The strategy, known as house hacking, can generate rental income alongside potential appreciation. Buying property is not the only way in. Real estate investment trusts (REITs) provide exposure to income-producing real estate without directly purchasing or managing a property, according to the U.S. Securities and Exchange Commission (SEC).
7. Royalties: Create Once, Earn Repeatedly
“You create something once, that brand, that design, that product or that piece of content, and you earn money every single time someone else uses it or sells it,” Croak said.
Croak has earned millions from licensing Silly Bandz. Hankwitz earns advertising revenue from older podcast episodes that continue attracting listeners. For someone starting smaller, the same idea could apply to an ebook, online course, app or digital template.
“Each new stream made the next one easier to build because I had more capital, more knowledge, more compounding,” Hankwitz said.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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