There are many ways to make money. From freelancing on the internet, to starting a small business in your own community, you can choose from a wide range of income generating activities that will suit your lifestyle and interests. This post shares a list of income generating activities.
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- What are the income generating activities?
- What are the 3 income producing activities?
- What are the important income generating skills?
- What are assets that generate income?
- What are the 7 sources of income?
- How can I make more income?
- What is income generation?
- What is the difference between wealth creating venture and income generating venture?
Disclaimer: This blog post does not seek to provide financial advice. Seek professional help before making investment decisions. Investments can go up as well as down in value. This page may contain affiliate links that earn this site a small commission at no extra cost to you.
What are the income generating activities?
Income generating activities are things that you can do actually to generate money for your business. One of the hardest things in having a business – whatever the niche or industry is managing your time so that you allow yourself the maximum ability to generate cash, rather than just being busy for the sake of being busy.
Within the context of a blog or website, income generating activities can be:
- Optimising blog posts to rank higher in search to generate more traffic and in turn generate more advertising/ affiliate or product revenue
- Preparing a newsletter to share valuable information with your following, solving some of their problems which in turn will build trust and encourage a purchase from your blog/ site
- Writing an ebook to sell
- Negotiating an affiliate partnership to drive more product sales
- Taking the time to invest your income generated into a diversified stocks and shares portfolio
- Basically, any activity that directly brings income into your business!
What are the 3 income producing activities?
- Discovering: How are people finding you and your business?
- Nurturing: How are your users getting to know you and trust you to make a purchase/ sale
- Delivering: Do what you promised and exceed the customer’s expectations.
People need to be able to find you and your business. For the example of a blog or website, people need to find the blog or website. So the first step is to generate traffic. This may be through search engine optimisation, Facebook ads,/ Google ads.
For someone to purchase from you, they need to know you / your brand. They need to like you and your brand. Finally, they have to trust you and your brand. This may be through having a good e-mail opt-in that delivers immediate value to the user or solves a particular problem on a website or blog.
Through your e-mail list, you continue to add value to the user and provide a way for the user to get to know you and trust you (regular updates, useful articles etc.). The user may then be willing to make a purchase. You have to nurture the relationship though – it won’t just happen automatically.
It is important that your product delivers and exceeds the user’s expectation once the purchase is made. A good customer experience will bring you further business, recommendations and referrals via word of mouth, and hopefully good reviews.
What are the important income generating skills?
- Time management: there is no point in being busy for the sake of being busy
- Organisation and prioritisation: there are only 24 hours in a day. Spend your time where you will get the largest reward and prioritise those activities
- Commercial awareness: know your business and your niche well to allow you to spot high-value opportunities and not get sucked into useless ventures that will waste your time and money.
- Getting on with other people: It is impossible to be everybody’s friend and keep everyone happy. That said, to be really successful, you need to be able to work well with others.
- Motivation: Making money is HARD. If it were easy, everyone would do it. There will be a lot of ‘grinding’, lots of hours that may not necessarily yield a result straight away, so you need to find a way to push through the pain!
- Having a strong inner conviction to go against the grain! Whilst it is important to be a good listener, sometimes, having the courage to do unpopular or pursue out of favour opportunities often provide some of the highest income generating rewards.
One of the best books I read that has helped me not just in business, but in life, was How to Win Friends and Influence People.
What are assets that generate income?
- Stocks and Shares
- Property Investment Trusts or Fund
- Small business
- Blog/ website
- Basically any of your own products: Anything that can generate cash is an income producing asset, e.g. machinery in a factory that allows a product to be manufactured and sold is an income producing asset!
1. Stocks and Shares
Simply put, stocks and shares are ownership of a company or enterprise that entitle you to a percentage of the profits generated. The profits are what provides the income.
Bonds are a loan to a company or an organisation whereby you lend them some money and in return the company or organisation pays your interest for a period of time until the original amount is repaid. The interest payments generate case.
Property ownership generates income by being able to rent out the space for a monthly or annual rent.
4. Property Investment Trust or Fund
A property investment trust or fund aims to pool the resources from several people or investors with the goal to purchase property and generate cash from the rent. Buying property is expensive and can be illiquid – i.e. takes time to buy and sell. Property investment trusts or fund aim to make investing in property more accessible by being able to contribute much lower amounts to be able to invest.
Farms are an excellent asset that generate income. Through crops or livestock or renting land, income is generated from the farm. Small business
6. Small businesses
Small businesses can generate income through their trading by providing products and services.
7. Blog/ website
Blogging/ websites are able to generate income through:
- Product sales
- Affiliate marketing e.g. Amazon Affiliates
- Advertising revenue
- Guest posts
- Sponsored posts
- Becoming an online brand ambassador
A royalty is an income paid for the ongoing use of a given item, e.g. Amazon distributing and selling your book or ebook. You, as the owner of the book, would receive a percentage of the profits. The same applies to any produced or distributed items by a 3rd party under a licence agreement.
What are the 7 sources of income?
- Earned income
- Profit income
- Interest income
- Dividend income
- Rental income
- Capital gains
1. Earned income
Earned income is the money you make from working for someone else. It’s also called wage and salary income, because it’s a fixed amount of money that you get paid over time by an employer.
2. Profit income
Profit income is earn from selling a product or service. Once you deduct all your costs to produce or supply the service, you are then left with your profit.
3. Interest income
Interest income is typically through savings accounts. For agreeing to store your money with a given institution or bank, they would agree to then pay you a percentage interest on the amounts saved with them.
4. Dividend income
Dividend income is earned from investing in a company and the profits being distributed to shareholders (owners) in dividends.
5. Rental income
Rental Income has been a popular strategy for the many years. It’s an excellent way to generate passive income and is a great investment tool.
6. Capital gains
Capital gains are the profits a person or company makes when they sell an asset. The capital gain is calculated as the difference between what you paid for your asset and what you sold it for.
Royalty is the payment made by the producer of an article, book, song or other product to a person who owns the copyright and sells it. The royalty amount usually depends on how many units are sold and what type of royalty agreement was agreed upon in advance. It can also include music publishing royalties given to composers for a song that they wrote, recorded, and are sold by another company.
How can I make more income?
How can I make more income in employment?
- Maximise your worth and salary. Are you being paid what you are worth? Roughly every 5 years, I would do a serious review of what opportunities were out there regarding my job role and see if I could get a better package with a new company/competitor.
- Work overtime if available
- Reduce your debt and save more. Debt interest compounds against you, so clearing your debts faster can increase the amount of extra income you have
How can I make more income passively?
- You need to produce more than you consume. This can be through salary or if you back to the old days – producing more from your fields than you need
- Save the excess. If it is salary, then start a savings account and build up some of your saved income.
- Find a way to compound and grow your savings. Growing your savings may be through investing in a property, investing in a diversified portfolio of stocks, starting a blog etc. Almost anything!
- Multiply your income and generate wealth by continuing to reinvest your profits
What is income generation?
Income generation is a term used to describe the process of generating revenue or profits. The goal of income generation is to generate enough money to cover your expenses and have some leftover savings.
What is the difference between wealth creating venture and income generating venture?
The difference between a wealth-creating venture and an income-generating venture is that wealth creation takes place over a much longer time span – typically a lifetime – 25 plus years. Income generation is more concerned with a shorter time span and generating immediate cash.
As an example, wealth creation could be having a portfolio of properties. Income generation could be having a single property that pays rent.
Do you have any ideas for income generations? Please leave a comment in the section below – I would love to hear from you!