Three different types of income

There are three types of income—Linear Income, Passive income, and Residual Income.
Linear income is the income you earned. it’s the boss paying you what he thinks you’re worth. At most jobs, you get paid based on how much you work. Since you can only work so much, your income potential at a regular job is severely limited. Once you stop working, the income stops.

Passive income is the income produced by the assets. That means if you own passive income assets, you get paid whether you work or not. You don’t have to be trading your hours for dollars. Your income potential is only limited by the number of assets you are able to own. Most types of passive income are derived from rental property, while other types of passive income are derived from royalties from patents or license agreements. Another example of passive income comes from network marketing.

Residual income is revenue that occurs over time from work you’ve done one time. Some examples include:
An insurance agent who gets commission every year when a customer renews his policy
A network marketing or direct sales rep’s income from her direct customers when they reorder product every month
A marketing consultant who creates a workbook and sells it in e-book format on the Internet

What type of income are you currently living on? what type of income are you expecting living on in the future?

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Lillian & Benjamin, we help families achieve financial success