What are the 3 types of Income | Types of income

There are thousands and thousands of ways to earn money. But, income can be broadly classified into three types.

Types of income

 

Income is mainly classified into three types:

1.Active.
2.Passive.
3.Portfolio.

Active Income

This is the most common type of income and there is a huge possibility that your income also falls into this category. Active income is also referred to as earned income where you need to actively works for the cash to continuously flow into your bank account. If you stop working then your income will also come to a halt. This is not a good category to be in, although most of the people in the world fall into this category.
This includes:
Working for someone or for a company (JOB).
Small business. etc

Passive Income

It is very hard to build this type of income, you need very small amount of capital to start generating this types of income and once you build it successfully then you or your next generations will never have to think about earning money because once it gets into the track it grows exponentially and it is probably the most secure form of income.
Passive income includes:
Royalties.
Licencing.
MLM. etc

Portfolio Income

This is similar to passive income but the only difference is that it requires a huge amount of capital to start. This is also a very secure form of income and can be passed to the next generations.
This includes:
Stocks.
Big business. etc

 

Leave a Reply

Your email address will not be published. Required fields are marked *