There are 3 types of income: active income, passive income and portfolio income.
Active Income
Dictionary.com says:
Income for which services have been performed. This includes wages, tips, salaries, commissions, and income from businesses in which there is material participation.
Passive Income
Wikipedia says:
Most types of passive income are derived from real estate/property, while other types of passive income are derived from royalties from patents or license agreements.
An income stream falling into this category is one where money is received usually on a regular basis, where no additional effort has taken place. Most passive income streams require great effort to start with.
Some examples: Interest Income paid from bank deposits, rental income from real estate/property., royalties from writing a book, dividends from shares holding.
Another example of passive income come from network marketing.
Passive income flows to you or your family whether you are sick, or vacationing, or dead. Passive income streams allow you to make money without having to be there.
Portfolio Income
Portfolio income is income from investments, including dividends, interest, royalties, and capital gains. I would say that portfolio income is a subset of passive income.
11 replies to "3 types of income: Active, Portfolio and Passive Income"
Lineor income leverage income an rollity income
thanks for teaching the nation..l hv appreciated.
Lic and life insurance
What type of income
There is no income in LIC or insurance. Like you have insurance about your car for a period let 10 years. If your car had an accident then you will get determined price(money), If your car does not met with an accident in that period then you will not receive any money. Your whole monthly/yearly money will gone. That’s why their is lot money in insurance.
active incomes solve short term problems hence lengthen the long term burdens,
Here is what to do,
Stop saving because the much more money is printed daily
Start investing each penny of your active income.
Avoid investing in liabilities rather than real assets.
be a good book keeper.
So as a entrepreneur with a small business classified as a LLC, Im on the fence trying to make the push to be a individual who’s not earning a paycheck but making money off of my assists. I work a 5:30-2:30 am/pm shift for a large corporation to have income for the basics and insurance. How do I take my earned money and turn it into non taxable assets, or how do I transition into lessening the taxes? I want to get away from the mindset of relying on the job to take care of myself and family, and start growing my portfolio.
how are you sir ? send me your contact i need to talk to you personally
When passive income break even with expenses, yay!
when the passive income continues to curve up and gain sufficient surplus, that would be the right time to retire.
[…] Chow says that when your passive income equals your monthly spending requirements, you are considered financially free. It doesn’t […]
[…] Chow says that when your passive income equals your monthly spending requirements, you are considered financially free. It doesn’t […]
I believe that we should build up our cash reserves via active income and then plough part of it back for passive income.
Active is a very appropriate. We must do something… we must be proactive about it.
Thanks for sharing.
Warm regards
Tiat
P.S: We have a choice, to choose abundance or to choose scarcity. What’s yours? http://www.AbundanceLaw.com