There are three different types of income: Earned Income; Passive Income; and Portfolio Income. You must know what kind of income to work hard for, how to keep it and how to protect it from loss. This is the key to great wealth.
Earned income is income derived from your job. It is linear in nature. You work for an hour and get paid only one time for that one hour’s work, and that’s it. Your income stops when you stops working.
The rich don’t work for money, they have their money work for them. This is achieve through portfolio income and passive income.
Portfolio income is the income you receive from interest, dividends, royalties and gains you get from investments in paper assets.
Passive income is when you work once but continue to get paid over and over again from work you’re no longer doing. Passive income, in most cases is income earned from real estate investments or true businesses owned and operated independent of your personal involvement. Investing in or creating true assets that provide passive income for you is your ticket to wealth. To gain financial freedom you need this cash flow from ‘Passive Income’.
You can get Passive Income from investments or businesses, dividend income, interest on notes receivable, capital gains, trademark payments, rents and royalties.