Income Streams of Millionaires, According to the IRS
Millionaires don’t rely on one job or one investment. They build multiple income streams that work together, each one adding more control, more income, and more freedom.
In this gallery, we’ll break down the types of income millionaires use to build wealth, generate passive income, and stay financially free.
👉 Scroll or click through to see the income streams millionaires actually use.
Table of Contents
The Average Millionaire Has 7 Streams of Income
IRS data shows that millionaires don’t just earn more, they earn in more ways. IRS data shows wealthy individuals receive income from a mix of sources.
The common sources of income for millionaires include wages, interest, dividends, capital gains, rental and business income, and more.
👉 Keep reading about some of these millionaire income streams.
Millionaire Income Stream: Earned Income
Earned income means trading time for money: your paycheck, freelance gigs, or anything tied to work hours. It’s where most people start, and it’s usually where they stop. But for millionaires, it’s just the launchpad.
The goal is to use earned income to fund investments and build streams that don’t need your time. High-income jobs are common early on, but wealthy people don’t stay dependent on active income forever. They move from labor to leverage.
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Income Stream of Millionaires: Business Income
Business income is where things scale fast. This includes running a company, owning a small business, or holding equity in a private venture.
According to Federal Reserve data, 40% of households in the top 10% of wealth hold business equity. Compare that to just 2.5% in the bottom 10%, and the pattern is clear: ownership matters.
Millionaires know the real money isn’t in being the worker, it’s in being the owner. Business income can grow without limits, especially when other people are doing the work.
Millionaire Income Stream: Capital Gains
Capital gains happen when you sell an investment like stocks or real estate for more than you paid. It’s not predictable income, but when timed right, it’s powerful. Millionaires often use long-term capital gains to reduce taxes and cash out only when it makes sense.
This stream rewards patience. The rich don’t panic-sell, they hold assets for years, then take profits when the math lines up.
Related Video: The Most Common Jobs of Millionaires, According to The Millionaire Next Door
Income Stream of Millionaires: Dividend Income
Dividend income comes from owning stocks that pay you regularly. It’s a classic source of passive income that grows with time, not effort. Millionaires use dividend-paying stocks to create consistent cash flow while holding on to appreciating assets.
It’s a simple but powerful way to get paid without selling. The best part? Dividends can be reinvested to grow even faster, or used as tax-efficient income in retirement.
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Millionaire Income Stream: Interest Income
Interest income comes from lending your money out. That could be bonds, high-yield savings, or private lending. It’s not the flashiest stream, but it adds consistency to a portfolio.
Millionaires often use it for stability while riskier investments do the heavy lifting. The goal isn’t to make millions on interest, it’s to keep your money working at all times, even while you sleep.
Income Stream of Millionaires: Rental Income
Real estate income is one of the most common millionaire income streams. Rental properties generate monthly income, offer long-term appreciation, and come with powerful tax benefits.
According to Yahoo, 90% of millionaires own real estate investments. It’s not about flipping houses, it’s about owning assets that pay you every month and grow in value over decades.
How I Used Real Estate to Retire at 42 (And Believe It Still Works)
Millionaire Income Stream: Royalties
Royalties pay you again and again for work you did once. Books, music, patents, even digital products, if it earns money every time someone uses it, that’s a royalty.
While fewer millionaires earn this way, it’s one of the most passive and scalable streams out there. It’s income with a long tail, create something valuable once, and it could pay you for life.
The Millionaire Next Door Says It Too
In The Millionaire Next Door, authors Thomas Stanley and William Danko found that most millionaires live simply, but earn widely. They often own real estate, small businesses, and investments that pay them in multiple ways.
The book confirmed what the IRS shows now: real wealth comes from stacking quiet, steady income, not chasing the next big thing.
Millionaires Don’t Count on One Stream, And Neither Should You
If you’ve got one income source, you’re one step away from zero. Millionaires build backups, then backups for the backups. Even having two or three streams can change your life.
You don’t need to master all seven today, but you do need to start building. Your future income should work harder than you do.
Pick one, get it going, then add another. That’s how real wealth is built.
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