Three Income Types: How You Make Money

[Jasmine]

Income can be classified into three basic types:

Earned

Portfolio (capital gains)

Passive

If you get a job, that is earned income. If you are an accountant in a firm, or a content writer working independently, you are making earned income. Earned income is mostly active income. While it is easy to make this income, you should not depend on earned income because the moment you stop working, your income source will also stop.

If you buy something and the sell back for some profit that’s portfolio income, or capital gains. This kind of income comes from investment or business. You need capital gains because that’s how you can build your wealth. You can build portfolio income if you start saving your earned income and being investing in the market.

Passive income means you make money from the investment or something you have done in the past. Let’s say you wrote a book, you will receive passive income as long as your books are sold. If you invested in real estate and receive rental income that is passive income.

 

[Mastergp]

It is important to note that making money in effect is not easy for any one especially when things are not going our way, some people have even given up on making money they prefer begging for money or borrowing money without working hard to earn this money. In any of the case one need to know that nothing is easy to achieve so making money can't be exempted.

But when making money the are some important ways one can bear in making money isn't a day job so one should nit expect it to be easy the first thing one need to consider is his plans or ideas he want to use in making this money, yes by generating ideas he need to know if what he is trying to embark on would be possible for him.

Another thing to consider is ways to develop income, yes income can't come like that except one is able to search or earn it we need to work hard each day and night to earn money. As a material that has value it won't be easy to earn or achieve but with our effort put in such work we can make that money.

 

[Mika]

In order to make earned income, you need knowledge and skills. If you do not have knowledge and skills, you can't get a job and you can't make money. If you want to earn capital gains, you should have some investment and you should be able to make profits by selling off your assets. Passive income is also built with an investment. If you do not have an investment, you can't build passive income. The only exception to this is to create a product that sells and makes you passive income. Let's say you wrote a book, the book is selling and you earn royalty, the royalty you receive from your book is your passive income. Or, let's say you build software, your software continuously sells, and you continuously make money. Passive income can also be built from a business. However, it will take a long time before your business starts generating passive income.