Investment income refers to earnings generated from various financial assets, providing investors with passive or active returns. Here are the most common types:

1. Dividend Income
Paid by stocks (equities) to shareholders, usually quarterly.

It can be ordinary dividends (taxed as income) or qualified dividends (lower tax rate).

Some companies offer dividend reinvestment plans (DRIPs) for compounding growth.

2. Interest Income
Earned from fixed-income securities like bonds, CDs, and savings accounts.

Government and corporate bonds pay periodic interest (coupon payments).

Typically lower risk than stocks but with lower returns.

3. Capital Gains
Profits from selling an asset (stocks, real estate, crypto) at a higher price than purchase.

Short-term capital gains (held <1 year) are taxed as ordinary income.

Long-term capital gains (held >1 year) are taxed at lower rates.

4. Rental Income
Earned from leasing out real estate properties.

Can provide steady cash flow but requires maintenance and management.

5. Royalties
Payments for intellectual property (books, patents, music, oil/gas rights).

Common in energy investments (mineral rights) and creative works.

6. Business Income (Distributions)
Profits from private equity, partnerships, or sole proprietorships.

Often seen in venture capital or small business investments.

7. Options & Derivatives Income
Earned through selling covered calls, cash-secured puts, or other strategies.

Can generate premium income but involves higher risk.

Each type has different risks, tax implications, and liquidity, so investors should diversify based on their financial goals.