Investment Income Definition

Investment income is income derived from savings or investments, as opposed to income derived from employment. Common forms of investment income are interest payments, stock dividends, and capital gains from the sale of stocks. For younger workers, investment income is typically a negligible component in overall income whereas for retired individuals investment income forms the bulk of overall income. The old adage "a penny saved is a penny earned" is a colloquial expression lauding the concept of investment income.