3 Different Types of Income to Become a Millionaire (One Made Us $4.8M in 5 Years)
It is important to understand the rules of the game before you can play it. The same goes for the game of life and the same goes for the game of money as well. If you understand the rules governing the creation and transfer of wealth, you will be able to build something huge for yourself. The result will be that you will start living a much better and convenient life and the next generations to come will remember you for providing them better lives.
When it comes to income, there are basically three types of income. Usually, people don’t think about income in this way. We live in a world where there is an unspoken system set in place. You go to school, go to college, get a job, and keep doing it for the rest of your life until you retire. Of course, there is nothing wrong with that but if you want to dream bigger or dream something special, that shouldn’t be the only path you should be looking at.
Also, life is highly uncertain. You just don’t know what might happen. As the current year has shown, even things like pandemic, lootings, shootings, rioting, chaos, economic collapse and so much more can happen all at once. Therefore, you need to make sure that no matter what happens, you and your family will be okay. This is where the three types of income come in. If you have multiple sources of income, you can keep growing and ensure safety at the same time.
So, the first type of income is called active income. Some people also call it earning income. This is basically the most prominent way people earn a living. For the most part, it includes people doing jobs but it can also be something that forms the main activity that you perform every day to earn money. It is this type of income that is most affected in case of emergencies. This is where the type 2 and 3 come in.
The second type of income is called passive income. It is a favorite type for people who understand the money game. However, people also have massive misconceptions about it. People tend to think that once they set up a source of passive income, they don’t have to do anything further. This is not how it works. You need to continuously and actively manage and supervise this type of income as well. Otherwise, the source could vanish.
The third type of income is called portfolio income. You can have a series of investments and they are providing you capital gains and dividends and you are living off that. If you can live a life off of portfolio income, you have to figure out the best investments and invest your time and money into it. If you make the right moves, you can slowly build a healthy portfolio and become a millionaire.