We are in a world today were 80% of wealth are controlled by only 20% of the population. In other to become rich, you have to be among this 20%.
This article is going to be an eye opener to anyone who reads it. Today I’m will be talking about the most important lesson I learned in life and I’m ashamed I didn’t learn this lesson at a much younger age, I learned this lesson when I read the book “RICH DAD POOR DAD” . I’m sure majority of you reading this article have read that book and if you haven’t, I hope to be the one to share this with you as it is a very valuable lesson.
The gospel truth is that what I’m going to be revealing to you today is not something you can learn in school. Many people believe that the only way you can earn money is to get a job, so my job today is to destroy your ignorance about money.
Today I will be talking about the 4 types of income out there.
1. EARNED INCOME; this is a direct result of your labor, this simply means the job you have or if you are a business owner, it simply means the income from your business. Personally, I call earned income as “impatient income” because you are going to be paid for the hours you work at the end of the week and your major concern here is to get paid right away you are not concerned about putting to work with a little or no income coming in for a much greater return going forward, you want your money now.
The major setback of earned income is the fact that it gets harder as you get older especially if you work in a job or you are doing manual labor (like laying bricks and electrician) as you get older, your body is going to deteriorate and it’s going to be harder for you to do the job. The biggest problem here is that you stop earning once you stop working.
The second problem here is that this type of income is only scalable with your time. So if you work 48 hours a week, and you want to make more money, you have to increase your working hours to 50 or 60 hours a week. I don’t know about you guys but i wouldn’t want to spend 50 hours a week working. unless im working towards a passive income.
2. INVESTMENT INCOME; this is when you take a percentage of your earned income and put that percentage to work. “IN RICH DAD POOR DAD”, they talked about making your money work for you, there are a number of ways you can make money work for you especially If you are investing in the stock market, Bonds and cryptocurrency( I will advice you to take an extra caution when investing in crypto). The main goal here is not to spend all your money but take a percentage of it into assets that will appreciate with time. This is not going to make you rich overnight but if you start at a very early age, but by the time you get older and can’t go to your daily job anymore, you would have enough income built up from your investment.
3. PASSIVE INCOME; passive income is most appealing to everyone. Passive income is known as low to zero effort income. If it is purely passive income, it means that you put zero hours to work a week and every single week, the check keeps coming in. the great thing about passive income is that it continues to come even when you stop working. Few examples of passive income are real estate, Youtube channel, blogging, Royalty etc. The goal here is to find how you can earn passive income and its going to be different for everyone.
4. INHERITANCE INCOME; this applies to people who have generational wealth. Most people do not have this because not everybody was born into a wealthy family.
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