Investment Income

What is 'Investment Income'

Investment income is income coming from interest payments, dividends, capital gains collected upon the sale of a security or other assets, and any other profit that is made through an investment vehicle of any kind.

BREAKING DOWN 'Investment Income'

Generally, most people earn a large portion of their total net income through 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.

In income statements of publicly traded companies, you will commonly see an item called investment income (or losses); this is where the company reports the portion of the net income that was obtained through investments made with surplus cash as opposed to being earned with the company's usual line of business.

RELATED TERMS
  1. Net Investment Income

    Income received from investment assets (before taxes) such as ...
  2. Income Investment Company

    A money management firm whose primary investment goal is to generate ...
  3. Income

    Money that an individual or business receives in exchange for ...
  4. Portfolio Income

    Income from investments, dividends, interest, royalties and capital ...
  5. Net Income - NI

    1. A company's total earnings (or profit). Net income is calculated ...
  6. Equity Income

    1. Dividend income that is earned through an investment in stocks ...
Related Articles
  1. Savings

    All About Income

    Income is the money you or a business earns by providing goods or services, or through investments.
  2. Professionals

    Tax Consequences of the Investment Company's Activities

    FINRA Series 6 Exam Study Guide - Tax Consequences of the Investment Company's Activities. In this section, Mutual Funds, Capital gains distributions, Gross Investment Income, Net Investmant ...
  3. Investing Basics

    How Will Your Investment Make Money?

    Discover the basic types of investment income and which asset classes pay them.
  4. Retirement

    3 Ways Retirees Can Generate Income From Investments

    Retirement can last a long time, which means people not only have to save for retirement but see it generate income. Thankfully there’s lots of ways to do that.
  5. Investing Basics

    Yield vs. Total Return: How They Differ

    Understanding yield vs. total return is essential in constructing portfolios that meet income generating needs while providing growth for the future.
  6. Professionals

    Mutual Fund Characteristics and Taxation

    FINRA/NASAA Series 66 Section 2 - Mutual Fund Characteristics and Taxation. In this section mutual fund taxation and distribution.
  7. Professionals

    Income and Taxation

    FINRA Series 7: Section 2 - Income and Taxation
  8. Bonds & Fixed Income

    Satisfy Your Investment Objectives With Income Funds

    Discover the various categories of income funds and the types of investors for whom they are appropriate.
  9. Professionals

    Federal Income Tax Regulations

    FINRA Series 6 Exam Study Guide - Federal Income Tax Regulations. In this section, four types of income tax: Tax on Ordinary income, capital gains, dividends, passive income
  10. Professionals

    Income And Assets

    This section of the exam details various income and asset sources for individual taxpayers.
RELATED FAQS
  1. What is the difference between capital gains and investment income?

    Learn about the difference between capital gains and other types of investment income, such as dividends paid on stock or ... Read Answer >>
  2. What is the difference between earnings and income?

    See how earnings and income are different and when they are used in relation to personal finance versus a business' financial ... Read Answer >>
  3. What is the difference between gross income and earned income?

    Being able to distinguish between earned income and gross income is an important tool in preparing for and filing your individual ... Read Answer >>
  4. What is the Difference Between Operating Income and Net Income?

    Understand the difference between operating income and net income, including the calculations and interpretations of each ... Read Answer >>
  5. Is operating profit the same as net income?

    Understand the difference between operating profit and net income, including how each type relates to the other and how both ... Read Answer >>
  6. What is the difference between comprehensive income and gross income?

    Learn the specifics of both comprehensive income and gross income, how they are legally defined, and the primary difference ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center