Building your wealth strategy is a crucial part of your long-term goals. One of the crucial elements in this strategy is your increasing income. As your income increases, you can save more, pay off debts earlier, invest more, and also have a comfortable present. However, in current situations having a single source of income is not enough.
You can have multiple streams that will help you plan a much better life. If you are not aware of how to do this, then you can take professional help from financial institutions such as columbia bank Aberdeen. There are three main types of income that you can focus on.
Active income is also known as earned income, which you receive when you have performed any task. You get paid in exchange for the time and effort that you spend on any job. This is the income that you get from working in any business or any other employment service. This is the most common and the first source of income that most people have.
Passive income is what you get from assets without you having to invest your time or effort. This means that you do not have to participate in this work to receive income. Most of this income is received from businesses or real estate. Some examples of this income are payments from rented properties, affiliate marketing, network marketing, and such.
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Portfolio income is what you receive from investments. For example, you may sell the stocks you have in your portfolio, and the money you receive is known as portfolio income. This type of income can increase with time, depending on how you handle your stocks.
Using these three streams of income together will be an amazing idea. With so many streams of income, you can plan your future freely and handle financial risks better.