There are three types of income no more no less. And although it’s easy to think that there is just 1 just like about 90% of people do. There are three no more no less and there are different incomes for different people. There is No doubt to that because there are people thinking that there is just one income and this is not true. The three types of income are: Active income, portfolio income, and passive income. These three incomes are perhaps some of the most important things you will ever encounter in life.
As active income has the power to make you slave over it, passive income has the power to make you financially free, and portfolio income has the power to make you win big or lose large or some of both. So you might be thinking right now ”What are these incomes?”. Well active income (Which I cover more directly in the article “active income”) is where about 90% of Americans make there money. To reiterate this is what I was talking about in the first few sentences. Active income is when you work for money.
The most common form of Active income is called a job and chances are sense you can read you have heard of this term “Job”. Active income is when you trade your time for money… pennies of what your really worth but money nonetheless. You might think of this as the only income but you are wrong, and note that it is not a bad thing to be wrong in this case, for there are other incomes that you can make. At any rate I describe making Active income as “The Endless Cycle” and the name fits I’d say, for “you get nowhere real fast.”. Which is a little quote I made and like to use (I talk more about “The Endless Cycle” in another article.) In “The Endless Cycle” you go around and around and around without ever making any real progress, hint getting nowhere. It’s the same concept with a job and with active income.
You work all the time to pay bills that you made and pay other people (the rich) yet you get nowhere even after working for years you might feel like you have not really accomplished much. Yet you might not ever get out of “The Endless Cycle” and most people send their lives there which is terrible, and it is a worst nightmare scenario. Also keep in mind that some people call this income earned income. Either way it all means the same. At any rate I will now go on to talk about passive income which is the income of the rich. Passive income (which I cover more directly in “What is passive income“) is the income of the rich and we are the “wannabes” or the people that wannabe rich, and yes I do like saying that.
So to define passive income, it is income that you make without working for it once it is in place. So in other words once you have a system for making income that income will cash flow into your pocket (cash flow is money over a period of time. I talk about this in another article called “Cash Flow- Cash flow positive, Cash Flow negative”.) So with passive income you make money no matter what you do. You can go to the beach, stay home and watch TV, or even buy a jet if your really good, and you still make money regardless. So a simple definition of passive income I like to use that I heard is. “You make money whether you get out of bed of not.” I love this quote because it gives you freedom. So when you have enough passive income that it exceeds all of your expenses or bills, you will be financially free and out of the endless cycle. If you have even more on to that you’ll be rich and be able buy that jet.
The sad part is that only 10% of people in the richest country, only about 10% earns this income on a daily basis in tremendous amounts. So the question is. Do you want to be part of the 10% and get out of “The Endless Cycle” and be rich and have tax breaks and maybe even live tax FREE? If the answer is yes then I’d recommend you get passive income and get people to work for you. Invest in assets that will all give you that magical income. (I talk about assets more in other articles.) The last type of income I am gong to talk about is the last but not least portfolio income.
I am not going to spend much time on this one. When I looked up portfolio income I saw the definition “paper assets” written down. Well that does not give much sustenance. So after a while of searching I found out that portfolio income is income made from stocks bonds and mutual funds and CDs of a business. In which you can buy stocks in any number and hold it until the market value of your stocks goes up and you sell. While there are countless other strategies, that is the most common one. I would talk more on the subject of portfolio income but I feel that giving a short definition is good for I feel I already got the most incomes out of the way.
Also if you have anything you wish to say to me please do not hesitate to E-mail me at Trenzel123@yahoo.com. I will get back to you if I can. Also if you like this article please take the time to look through the others I made Via my profile page. Thank you for your interest and have a wonderful day.
Written by tren123
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