What are the types of income! You should know in your 20’s – Blogsnaga

what are the types of income

We are surviving in 21st Century Right, still, there is a myth in ourselves that if we get a job in a good organization, our lives will be settled, isn’t it?

May be yes! i’m not sure…

But what happened when COVID 19 Came to us in the year 2020. It was a big pandemic situation all around the world. Everyone’s beliefs and hopes have vanished. Life will become a tragedy.

So many lives were collapsed, Even a millionaire can’t able to save their lives.

Yes! We knew all the scenario’s which COVID brings us. COVID 19 thought us so many things in our lives.

I realized one thing “ Nothing is permanent”  other than the Coronavirus…..?

Now I’m gonna tell you one of the non-permanent things this – Your job. Isn’t it? Did you know how many of them lost their job in this pandemic situation?

The article published on thehindu.com tells that, Over 12 crore people in India lost their jobs in April – 2020

Now think yourself, Does 9 to 5 job will give you the lifetime settlement?

Not Exactly, If you are surviving through a single source of income you will be in the danger zone of life. That is why you should know what are the types of income you can earn.

Let’s know what are the types of income:

  1.         Earned Income
  2.         Portfolio income
  3.         Passive income

According to Robert Kiyosaki, He said, he became a multi-millionaire after understanding these different types of income in his life.

Come on, Let’s see what it is. I hope it will give some financial knowledge to your brain.

Earned Income

In the world population, Around 85% of people making money through earned income. Now you can answer, what is earned income?. JOB! Right?. Yes, if you are going for a 9 – 5 job for a Monthly salary or doing some work for some hours so that you get paid, these income are called earned income, Here your are exchanging your time for money.

In India, salaries are calculated based on the hours you spent, generally 8hours/day. Here salaries are negotiable by the employer but time will remain the same. Anyhow you are giving your own time to your employer and get back money for that, in terms of salary.

Employees and self employees fall into this category, they have money and time but they don’t have financial freedom. If they have a job okay. Suddenly layoff comes, their situation is getting worse.

Portfolio income 

In the case of earned income, you were exchange time for money. Now you need to know the difference between portfolio income and earned income. Portfolio income is about your money management. 

If you have a lot of money you can use it in many ways. Either you spend it on buying things or partying, etc…. And also investing in something. 

Here,  I mean buying stocks, If you are buying stocks of a particular company and selling it when price value increases.you will get a portfolio income. 

 For eg; if you are buying 10,000 shares for 1 lakh rupees, and imagine after two months the price value of 10000 shares is  2 lakh rupees. 

Now, If you are selling that 10.000 shares, you will get a profit of 1lakh rupees, that profit income is called portfolio income. 

Your money brings you the money over time. Now you can also understand the concept of money makes money.

Now you have a clear idea about what is portfolio income is.

Passive income

After understanding the above two types of income, you guys are curious about knowing the third one right? Yes, which is called Passive income.

Okay, let us find out, what is passive income? The answer is present in the question itself.

That is. The word “Passive”. We all know how passive voice works, Right. The same thing applies here.

In the above two-incomes, you are involving directly, which means you have to there physically at the spot. But in the passive income, you are going to act indirectly, which means you are not supposed to be in the spot physically.

What is passive income?

The passive income is an income that comes to you even you are sleeping. Eg, renting houses, Affiliate marketing, Dividend stocks, Saving accounts, etc.. if you are renting houses you will get money every month without any hustle from you. Your assets bring you the money.

Conclusion:

Okay, Hope you have a basic understanding of what are the types of income? Share with your friends who need this to know. Comment us your understanding and suggestions. And comment us some passive incomes you know.

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