02/17/2022
Earned income ⏳
This is the primary source of income. For most people in the world, this would include salaries, tips, commissions, etc.
This essentially means you're exchanging time and energy, or material participation, for money.
The problem with salaries is that they can be difficult to increase and often necessary to have to work more hours.
Invested income 🚀
This comes from investments such as dividends, interest, royalties and capital gains.
The amount of income does not depend upon the number of hours invested. Rather, it depends upon the capital invested.
For example, you might buy stock in a corporation at a low price and sell your shares for profit when they increase in value. This would be considered a capital gain.
Passive income 🎯
Passive income is money earned from a rental property, limited partnership or other business in which you're not actively involved.
For example, if you invest in a business without participating in its development, you'd be considered a silent investor receiving passive income.
This typically requires an upfront investment and time to grow and maintain profit. However, investments like these can provide you with a regular stream of income in the future with little effort from your part.
