The 3 Types of Income
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Earned Income
Rich exchange money for time, Poor and middle class exchange time for money.
All the people say go to college and have good grades then, you can get a good and safe job and receives paychecks, make your money through earned income.
If you are doing this it simply means that you are an employee who works 9 to 5 or more in a day and exchange their time with money. For example; When you work as an employee as a police officer, a store cashier or a web designer, you are getting paid a predetermined amount of money to do that jo for a certain amount of time, when you stop working then the cashflow while stop.
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Earned Income |
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Portfolio Income
In investing, what is comfortable is rarely profitable.
When the poor and middle class earned income by exchanging time for money, Portfolio Income is made through investment, dividend, interest and capital gains.
For example; When someone buys paper assets in a corporation, they plan on selling those same paper assets at a higher price in the futures. So, if they buy a stock at $5 toad ad the price goes up to $40 when they sell that paper asset. They make $35 gains. That capital gain is called their profit.
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| Portfolio Income |
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Passive Income
If you don’t find a way to make money while you sleep, you will work until you die.
Passive Income simply defines an asset puts money in your pocket whether you work or not. For example; When you give your land in rent you get cash every month by the person who is using your land. It is a passive income. In this information age, passive income is earned through the Internet by writing blogs, making video ad other stuff.
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Rich people have Portfolio and Passive Income and Middle and poor class people have earned income.
The tax amount is very high in earned income ad low in portfolio income and we can say there is no tax in passive income. This why Rich people focus and spend their time Knowledge to earn portfolio income and passive income.
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