Mika
VIP Contributor
Based on what kind of work you are doing and how you are generating income, your income will be generally classified into three different categories. They are:
Active Income
Passive Income
Residual Income
Active income is an income that you generate by working actively. If you have a 9-5 job, you have an active income. If you work on contracts and get paid after the completion of the task, you have an active income source. Most people have an active income source.
Passive income is something that comes in without any ongoing work or from the work you have done in the past. If you have invested in the stock market or real estate, that’s passive income. If you have a profitable business that’s a passive income.
Residual income is the income that you generate from something that you have done in the past. If you receive retirement funds, pension plans, insurance bonuses, and royalties from your creative work these are all residual income.
Active Income
Passive Income
Residual Income
Active income is an income that you generate by working actively. If you have a 9-5 job, you have an active income. If you work on contracts and get paid after the completion of the task, you have an active income source. Most people have an active income source.
Passive income is something that comes in without any ongoing work or from the work you have done in the past. If you have invested in the stock market or real estate, that’s passive income. If you have a profitable business that’s a passive income.
Residual income is the income that you generate from something that you have done in the past. If you receive retirement funds, pension plans, insurance bonuses, and royalties from your creative work these are all residual income.