The topic of money makes many people shiver. Profits, taxes, income, and investing can seem scary if you’re not in the know. Would you like to fix that? You’ve come to the right place!
In this article, we’ll tell you about income and its types – active and passive income. We’ll also go over ways for you to make either active or passive income, as well as the benefits and drawbacks of both income types.
What Is Income?
Let’s start with the basics. Income is the money you get for your work over a particular period. Companies also get income from sales or services that they offer over a period of time.
The average household worldwide has a yearly income of only $9,733. The residents of Monaco earn the highest income, at around $186 thousand each year. And around ⅘ of people worldwide make less than $100 thousand annually.
Passive Income
You probably think that the only way to get money to your bank account is to work for it. But that’s not true.
What Is Passive Income?
The money you earn with minimal effort is called passive income. Usually, passive income supplements the money you receive from your regular job.
Ways to Earn Passive Income
Passive income may sound like the answer to all of your money problems. And you won’t know until you try. Dip your toes into passive income with investing, real estate, affiliate marketing, or passive income-generating apps like Honeygain.
One of the easiest ways to make passive income is through passive income-generating apps like Honeygain.
With Honeygain, you receive money for sharing your internet connection. That’s right – all you have to do to make free money is download the app on your smartphone or laptop (or both!), create an account, and let the app run on your phone!
Here’s how it works: You share your unused internet connection with Honeygain. Scientists and businesses use the internet for various purposes like ad verification, website testing, etc. And you get paid for your help without more than lifting a finger!
Benefits of Passive Income
- You don’t have to work for it actively;
- Flexibility – you set your own hours;
Drawbacks of Passive Income
Passive income comes with some drawbacks, just like everything else in life. The main disadvantage of passive income is that you probably won’t make enough money to live comfortably on it.
Most ways to earn passive income take time to really add up. This means that you should wait before you quit your regular job to live off of passive income.
Active Income
Hard work pays off – and that’s on active income. If you’ve ever worked for a company and earned an hourly or a monthly salary, then you know what active income is.
What Is Active Income?
Active income is the money you see on your payslip every week or month. It’s the money you’re paid for the work that you did between each payday.
Ways to Earn Active Income
There are two main ways to earn active income – if you’re part of a company, that company pays you active income. And if you’re an independent worker, you control your paycheck.
Each worker of a company gets a regular paycheck for their work. A company pays for your salary, health insurance, and some taxes on your behalf.
If you’re a freelancer, you pay your own salary and taxes that a company would pay for you if you were a regular employee.
Benefits of Active Income
The biggest benefit of active income is the fact that it’s dependable. The money you make every month is almost always the same, except for unpredictable reasons.
Also, if you have a regular job that pays active income, you’ll probably earn enough to live comfortably,
Drawbacks of Active Income
Hard work pays off, but hard work is hard. And that’s the main drawback of active income.
The amount of work and energy you dedicate will decide the money on your payslip.
If you work a full-time 9-5 job, you’re probably okay, but if you can only work part-time, that may cause some money problems.
Conclusion
Congratulations, you’re now caught up on the intricacies of the main income types. Active income is the monetary equivalent of the labor you did over a specific period of time. You probably work for a company, and they’re the ones paying you.
The second type of income is passive income, the money that grows in your wallet without your direct involvement. People earn passive income in a myriad of ways, from renting out a house to using money-making smartphone apps like Honeygain.
No matter which type of income you decide to pursue, we hope you succeed in your journey to financial independence and stability!
