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The Three Types of Income

When you

get right down to it, there are three broad types of income you can generate:

  1. Earned Income
  2. Portfolio Income
  3. Passive Income

Earned Income

Earned income is any income that is generated by working. Your salary or money made from hourly employment (regardless of whether that salary or hourly income came from working for someone else or from your own “consulting”) is considered earned income.

Some activities that generate earned income include:

  • Working a job
  • Owning a small business
  • Consulting
  • Gambling
  • Any other activity that pays based on time/effort spent

 

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