Income plays an integral part in mastering your money.
How to Multiply Your Income to Support Financial Wellbeing
Did you know there are different types of income? We often think of income as simply coming from a job where we exchange our time for a paycheck.
However, there are multiple and diversified ways to generate income that can support your overall wellbeing.
Earning Money Versus Making Money
It’s worth noting the difference between “earning” money and “making” money. Although the words are interchangeably used, they are not the same thing.
Earning money is a result of exchanging your time for cash, payment, or a paycheck. You earn money by performing work for someone else–a business-owner, employer, or client. In the gig economy, you earn money by performing tasks for others, designing logos, or using your car to drive people or delivery packages.
Making money is from activities that don’t involve a significant amount of your time to generate income. You may have spent time building a system or business but it operates without your active participation. Unfortunately, making money is associated with MLM (multi-level-marketing), get-rich-quick, or other make money fast schemes. Fortunately, there are legitimate ways to make money through investing and by creating products.
Increasing Your Income
There are many ways to increase your income starting with:
Increase the income you get from your primary job.
There are steps you can take that can help you get the raise you deserve or find another job with a higher salary. Learn how you can ask and get a pay raise.
Get a second job.
It’s not ideal to take on a part-time job because ultimately you’re using more of your time. However, it may be necessary to take on part-time for a limited time. Doing so can help you meet your financial obligations and speed up your debt payoff goals.
Work on your time with side hustles.
There are many apps and services that connect you with people who need help or tasks completed. These include completing chores, driving people, pet sitting, delivering food and packages, and data entry.
Active Income vs. Passive Income Defined
In Robert Kiyosaki’s bestselling book, Rich Dad Poor Dad, he explained these terms to millions of readers who finally understand how to grow wealth. The two different types of income:
Active income is money you physically work to earn such as a job. This is income for which services have been performed. This includes wages, tips, salaries, commissions, and income from businesses in which there is active participation. Typically, you’re exchanging hours for money.
Passive income is indirectly earned such as interest from savings accounts or dividends. This income is derived from things like rental property, limited partnerships, or other businesses in which you’re not actively involved.
Now, that you have a good understanding of income categories, I want to introduce you to the different types of income streams. They are:
- Earned Income: money earned from exchanging your time.
- Profit Income: money earned from selling something.
- Interest Income: money earned from lending to others.
- Dividend Income: money earned from profits as a shareholder.
- Rental Income: money earned from rental properties.
- Capital Gains: money earned from the growth of assets.
- Royalty Income: money earned from licensing your work.
How Can You Earn and Make More Money
Visit the financial marketplace for over 50+ ideas on how to earn and make more money.