The Three Types of Income

There are three types of income no more no less. And although it’s easy to think that there is just 1 just like about 90% of people do. There are three no more no less and there are different incomes for different people. There is No doubt to that because there are people thinking that there is just one income and this is not true. The three types of income are: Active income, portfolio income, and passive income. These three incomes are perhaps some of the most important things you will ever encounter in life. As active income has the power to make you slave over it, passive income has the power to make you financially free, and portfolio income has the power to make you win big or lose large or some of both. So you might be thinking right now ”What are these incomes?”. Well active income (Which I cover more directly in the article “active income”) is where about 90% of Americans make there money. To reiterate this is what I was talking about in the first few sentences. Active income is when you work for money. The most common form of Active income is called a job and chances are sense you can read you have heard of this term “Job”.

Active income is when you trade your time for money… pennies of what your really worth but money nonetheless. You might think of this as the only income but you are wrong, and note that it is not a bad thing to be wrong in this case, for there are other incomes that you can make. At any rate I describe making Active income as “The Endless Cycle” and the name fits I’d say, for “you get nowhere real fast.”. Which is a little quote I made and like to use (I talk more about “The Endless Cycle” in another article.) In “The Endless Cycle” you go around and around and around without ever making any real progress, hint getting nowhere. It’s the same concept with a job and with active income. You work all the time to pay bills that you made and pay other people (the rich) yet you get nowhere even after working for years you might feel like you have not really accomplished much. Yet you might not ever get out of “The Endless Cycle” and most people send their lives there which is terrible, and it is a worst nightmare scenario. Also keep in mind that some people call this income earned income. Either way it all means the same. At any rate I will now go on to talk about passive income which is the income of the rich. Passive income (which I cover more directly in “What is passive income“) is the income of the rich and we are the “wannabes” or the people that wannabe rich, and yes I do like saying that. So to define passive income, it is income that you make without working for it once it is in place. So in other words once you have a system for making income that income will cash flow into your pocket (cash flow is money over a period of time. I talk about this in another article called “Cash Flow- Cash flow positive, Cash Flow negative”.)