Types of Income

Income is money than an individual or business receives in exchange for providing labour, producing a good or service or through investing capital. There are a few different types of income:

  • Earned Income
  • Portfolio Income
  • Passive Income

Ways People Make Money

Now that you understand the different types of income, it is important to understand the four different ways people use to make money. Each of these four ways may not suit everyone as each has its own advantages and disadvantage. The four ways people make money are as an Employee, Self-Employed, Business Owner, or Investor. 

How the Rich Make Money

The average millionaire has 7 streams of income generating cash flow, including:

  • Earned Income
  • Profit Income
  • Interest Income
  • Dividend Income
  • Rental Income
  • Residual and Royalty Income
  • Capital Gains