fbpx
Potentash
  • Relationships
    • The Singlehood Series
    • Dating
    • Sex
    • Parenting
  • Lifestyle
    • Home
    • Food + Beverage
    • Fashion
    • Interviews
  • Fiction
    • Poetry
  • Skin + Beauty
    • Skin
      • Skincare
    • Hair
      • Haircare
  • Wellness
    • Physical Health
    • Emotional Wellness
    • Mental Wellness
    • Social Wellness
    • Spiritual Wellness
  • Business
    • Business Finance
    • Personal Finance
    • Entrepreneurship
    • Investments
    • Personal Investments
  • Entertainment
    • Internet
    • Events
    • Music
    • Books
No Result
View All Result
  • Login
Potentash
  • Relationships
    • The Singlehood Series
    • Dating
    • Sex
    • Parenting
  • Lifestyle
    • Home
    • Food + Beverage
    • Fashion
    • Interviews
  • Fiction
    • Poetry
  • Skin + Beauty
    • Skin
      • Skincare
    • Hair
      • Haircare
  • Wellness
    • Physical Health
    • Emotional Wellness
    • Mental Wellness
    • Social Wellness
    • Spiritual Wellness
  • Business
    • Business Finance
    • Personal Finance
    • Entrepreneurship
    • Investments
    • Personal Investments
  • Entertainment
    • Internet
    • Events
    • Music
    • Books
No Result
View All Result
  • Login
Potentash
No Result
View All Result
Money. Photographer: Trevor Snapp/Bloomberg

Money. Photographer: Trevor Snapp/Bloomberg

3 Kinds Of Income And Why You Should Have All Of Them

Faith Wambui by Faith Wambui
July 24, 2019
in Personal Finance
Reading Time: 4 mins read
264 8
0
327
SHARES
1.8k
VIEWS
FacebookTwitterWhatsApp

Having one source of income is like having all your eggs in one basket. Sooner or later, it’s going to cave under pressure right before your eyes. It’s easy to feel like you have made it once you start earning a salary. However, this isn’t enough. The most important lesson to learn in financial education is the value of cash flow. Here are the types of income and why you should have all of them.

  1. Passive Income 

This is the kind that you earn on the side whether or not you intended on earning from it. For instance, when you rent an extra room in your house, this counts as passive income. Check out  Top 5 Small Business Ideas To Make Passive Income. There are several ways you can generate it without much effort. Its main characteristic is that it’s not earned on the basis of time and effort. In other words, this is your side hustle.

It’s said to be the most attractive form of income and the key to financial freedom. More people are coming to this realization and starting their own side hustles. Passive income is necessary as it puts money in your pocket whether you have a job or not. This ensures that you won’t lack some fallback money even when times are rough. Additionally, making your assets work for you is always a plus.

Passive Income – The Lazy Way To Get Wealthy

  1. Active Income

As some put it, this is the money you earn to give up on your dreams. It comes in the form of a monthly salary, wages and/or bonuses. The perception was that this is the most important type of earning but this couldn’t be further from the truth. Active income is good as it offers financial security. However, if you seek to become wealthy, you have the least chance of doing so with an active income alone. 

Since it’s the most taxed type of income, you’re basically working to pay taxes. Additionally, the higher you earn, the more taxes you pay. So, there’s no way around it. Not to mention, the time you spend making this kind of money is limited. Therefore, there’s a cap on your income which is out of your control. 

However, it’s not all bad news for these earners. This is not only the easiest type of income to make but also the most steady. You have an assurance of a decent amount of money as long as you have a job.

Money. Photographer: Trevor Snapp/Bloomberg
  1. Investment Income

Last but not least, this is the kind you earn through making investments. It is the most overlooked but it’s one of the best ways to become wealthy. Most of the world’s richest people generate wealth through this method whether it’s by trading stocks, business, real estate or valuables. Want to be wealthy? Investment tips 101

Investment income should be one of your sources of income as it creates income on a  consistent basis for you even while you sleep. All you need to do is make good investments and wait for your returns. However, the reason most people shy away from it is that it requires you to put up a significant amount of money so that you can enjoy good returns. You also need to do your research and be well-acquainted with the stock market before investing.

It requires some level of expertise that many people don’t possess. However, if you’re interested in investing, you can approach investment firms that will advise you on how to do it.

Each of these has its merits and demerits. That is why you need all of them to complement each other and bring you closer to your financial goals.

Here are tips on How to create a Financial Plan as well as How To Do A Personal Financial Check

Finances And Investments: How To Plan For The Things We Cannot Plan For To Avoid Being Blindsided

Want To Be Wealthy? Investment Tips 101

How To Increase Your Personal Income Without Going Into Debt

How To Increase Your Personal Income Without Going Into Debt

Share131Tweet82SendShare23Pin29
Previous Post

8 Ways To Fix Your Finances To Avoid Being Broke

Next Post

Health: Foods That Treat & Prevent Migraines

Faith Wambui

Faith Wambui

I’m a content writer, bibliophile and travel enthusiast. I have worked in the digital space for over 5 years which has exposed me to a variety of lifestyle topics and peeked my interests in beauty, fashion, travel and wellness.

Next Post
Image from https://drhoffman.com/article/leyla-weighs-in-its-national-nutrition-month-a-reminder-to-eat-healthy-all-year-long/

Health: Foods That Treat & Prevent Migraines

Please login to join discussion

Recommended

image from https://www.essence.com/hair/beautiful-black-women-with-bald-heads/

The Bald Truth – 7 Things You Should Know Before, During, And After Going Bald

August 3, 2021
101
Man holding woman. Image from https://www.npr.org/sections/codeswitch/2013/06/12/188643185/for-black-singles-a-big-gender-split-on-views-of-long-term-relationships

The Singlehood Series: I Found Out My Boyfriend Was A Member Of Team Mafisi

April 9, 2022
470

Popular Stories

  • Three people in a love triangle. Image from https://www.authorlove.com/sweetest-love-triangle

    The Singlehood Series: How I Bumped Into His Girlfriend At The Movies And Ended Up Watching The Movie Alone

    349 shares
    Share 140 Tweet 87
  • Dialysis: Everything You Need To Know About This Kidney Failure Treatment

    9 shares
    Share 4 Tweet 2
  • Did This South African Rapist Fake His Death To Escape From Prison? The Thabo Bester Saga

    6 shares
    Share 2 Tweet 2
  • How To Pace A New Relationship

    669 shares
    Share 268 Tweet 167
  • Relationships: The Benefits Of Scheduling Sex

    0 shares
    Share 0 Tweet 0

Potentash Blog

Potentash

Potentash is an award-winning lifestyle blog. We publish lifestyle content that intersects with health, women, beauty, travel, business, relationships, finances and entertainment.

Explore

  • The Singlehood Series
  • From Stairs To Ramps
  • Man Around Nairobi
  • Pearls And Heels
  • Personal Finance
  • Food + Beverage
  • Editor’s Pick
  • Reviews

Get the Potentash Newsletter

  • Newsletter Archive
  • Subscribe
  • Frequently Asked Questions
  • Privacy Policy
  • Contact Us

Copyright © 2023. Potentash, In Partnership with Decima

  • Login
No Result
View All Result
  • Relationships
    • The Singlehood Series
    • Dating
    • Sex
    • Parenting
  • Lifestyle
    • Home
    • Food + Beverage
    • Fashion
    • Interviews
  • Fiction
    • Poetry
  • Skin + Beauty
    • Skin
      • Skincare
    • Hair
      • Haircare
  • Wellness
    • Physical Health
    • Emotional Wellness
    • Mental Wellness
    • Social Wellness
    • Spiritual Wellness
  • Business
    • Business Finance
    • Personal Finance
    • Entrepreneurship
    • Investments
    • Personal Investments
  • Entertainment
    • Internet
    • Events
    • Music
    • Books

Copyright © 2023. Potentash, In Partnership with Decima

Welcome Back!

Sign In with Linked In
OR

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In