Mika
VIP Contributor
No matter where you live or what you do, you will have to pay taxes. Every country has some sort of taxation system.
The tax department that is responsible for collecting taxes from the individuals and businesses, first of all, wants to know what kind of income you work for.
Earning income has the highest taxes because you are basically working for the money
Portfolio income (also called capital gains) is the income you make by selling something, for instance, if you buy a house for 100k and sell it for 200K, you made a capital gain of 100K. Likewise, if you buy stocks for 1k and sell them for 2k, you made a capital gain of 1K. Capital gains have the second-highest taxes.
Passive income is a business that makes you money whether you work or not. For example, if you receive dividends on your stocks, that is passive income. This has the lowest taxes. Rich people work for passive income. That’s why rich people do not pay much tax.
The tax department that is responsible for collecting taxes from the individuals and businesses, first of all, wants to know what kind of income you work for.
Earning income has the highest taxes because you are basically working for the money
Portfolio income (also called capital gains) is the income you make by selling something, for instance, if you buy a house for 100k and sell it for 200K, you made a capital gain of 100K. Likewise, if you buy stocks for 1k and sell them for 2k, you made a capital gain of 1K. Capital gains have the second-highest taxes.
Passive income is a business that makes you money whether you work or not. For example, if you receive dividends on your stocks, that is passive income. This has the lowest taxes. Rich people work for passive income. That’s why rich people do not pay much tax.
