Investment Income

Investment income is income that comes from interest payments, dividends, capital gains collected upon the sale of a security or other assets, and any other profit made through an investment vehicle of any kind. Generally, individuals earn most of their total net income each year through regular employment income. However, disciplined saving and investment in the financial markets can grow moderate savings into large investment portfolios, yielding an investor a large annual investment income over time. Interest earned on bank accounts, dividends received from stock owned by mutual fund holdings, or sales of gold coins held in a safety deposit box would all be considered investment income. Often, income made on investments undergoes different, and sometimes preferential, tax treatment, which varies by country and locality.