" Boris Bison Youth Empowerment Incubator | Key Ways to Generate Income and Create Wealth.

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Key Ways to Generate Income and Create Wealth.

Creating and growing wealth requires that one creates multiple sources of income. This will ensure that they earn enough money to enable them to save at least 10 to 30% of their income. A person who cannot consistently save 10 to 30% of their income cannot create or build wealth. In the same way that a container that leaks out more water faster than the rate at which it is being refilled will soon be empty, a person who spends far more than they earn cannot create wealth. Everyone wants to build and create wealth, but very few people have the patience and discipline to patiently learn how to create income streams and deal with the pain and challenges in the process. This is because it involves dealing with failures and disappointments. There are no short cuts to success and prosperity. 

Building wealth requires time, studying, effort, trying or experimenting on different business and investment ideas to create multiple sources of income. A diversified portfolio of various income sources offers protection against unforeseen circumstances and shocks. It is often essential to start early to benefit from the power of time and have the luxury of failing. I have seen people who started practising wealth-creating principles and ended up creating multiple sources of income. They bootstrapped, experienced failure, and learnt.

  1. Earned Income

Earning money by working on a job. Any employee that works for an employer receives a salary payment. Most people often start out in life with one source of income from the regular salary payments. This kind of income can enable one to make a living (satisfy basic needs). For one to make a fortune, they need to get some side businesses and use their savings to create assets that can generate more income for them.

  1. Profit Income

Earning money from buying products and selling them at a higher price and keeping the difference as profit income. This is what commodity traders do; they buy products to sell at a higher price with a profit margin that will cover the transaction costs. Most small and medium-sized businesses in Africa, commonly known as "buyam sellams" in Cameroon, earn their income from profit margins.

  1. Interest Income

Earning income by lending money to a borrower who pays interest or keeping it in a savings or investment account in a financial institution and then receiving interest payments. The interest payments could be loaned back to the borrower or financial institution to enable the money to compound. Loaning money to individuals is a profitable business in most societies (especially in Africa) as individuals are often willing to pay higher interests (higher interest rates), but the challenge is that the risk of defaulting on the payments is high. Also, loaning money to individuals in Africa is very risky because it is difficult to enforce payment contracts and retrieve the money due to the poor judiciary system. However, loaning money to the banks is relatively safe, but the banks pay low-interest rates), and still collect a management fee from the small amount of interest they pay.

  1. Royalty Income

Earning money from letting other individuals or businesses use a patented Intellectual Property. When an individual invents an idea, an innovative product (e.g., a piece of music, a piece of software, agriculture equipment/the machine, etc.), they can receive a royalty payment from other individuals or businesses using their invention.

  1. Dividend Income

Earning money from owning a stock. When more than one person owns a company, the company's total value can be split into small units called shares. The company shareholder can sell their company shares to interested buyers, which could be settled through contracts. When a company is registered at a public stock exchange, its shares can be sold to other traders and traded among the traders in the stock exchange. The stockholders are entitled to dividend payments that depend on the company's profit and growth and its value in the stock market. Therefore, a stock is a share of a company that entitles the holder to a fixed dividend, whose payment takes priority over ordinary share dividends. With the recent advances in Information and Communication Technologies (ICT), someone can buy stocks of companies traded in a given stock exchange. Some individuals who cannot identify companies to buy their stock (that is, they are not good at stock picking) could buy shares of mutual fund financial assets (e.g., portfolios made up of stocks or bonds, exchange-traded funds (ETFs), index funds, cryptocurrencies etc.)

  1. Rental Income

Earning money from regular rental payments by individuals who use one's assets such as houses, lands, farms, cars/bikes, machinery, etc. When one is still working, he or she could save money and then invest the money to create assets that he or she could rent to others and earn a passive income from these assets.

  1. Capital Gains

Earning money by buying assets or products that appreciate in value such as land, houses, minerals (e.g., gold, silver etc.,), and some seasonal agricultural commodities whose value appreciate within a given time frame, and financial assets like growth stocks (stocks that do not pay dividend as the company prefers to reinvest their earnings, but increase in value, and the investor gains from the increase in the value of the stock), cryptocurrencies (earning money from buying cryptocurrencies and their selling when their value increases significantly). When the assets or products appreciate, they can be sold at a higher price and benefit from the profit margin.

  1. Residual Income 

It is the income an individual continues to earn after completing the work or the income-producing work. It includes royalties, rental/real estate income, interest and dividend income, and income from the ongoing sale of consumer goods (such as music, digital art, or books).


The most interesting thing about the modern economy is that one could earn from all four quadrants simultaneously. Initially, one could work full time in either the E quadrant and part-time on the S quadrant (working full time and doing some side hustle part-time). One could then save between 10% to 30% earned from the E or S quadrant, and then create a business (to earn in the B quadrant) and invest the money in income-generating assets such as bonds, stocks, mutual funds, land, houses, farms, other financial products, etc. (to earn from the I quadrant). Therefore, it does not matter which quadrant one is earning, but one should strive to create a diversified portfolio by creating a plan that will enable one to earn from at least two of these quadrants or all of them.


By Godlove Suila Kuaban

Research Engineer, Educator, Entrepreneur, and Polymath