IF YOU ARE FAILING TO PLAN, YOU ARE PLANNING TO FAIL

Thursday 16 April 2015

Very Basic Knowledge about Income

MONEY. INVESTMENT. INCOME.





Money must be invested it in a manner of calculated risk. By knowing what are the possibilities that may occur during the selection of the chosen investments. There are actually three kinds of income in which we could invest on. Passive Income, Portfolio Income, and Active Income.

Passive Income - is a kind of income in which you are earning even without doing efforts for a particular business. The investment required is a little bit high. An example for this is establishment of an apartment for rent/lease. High amount of investment and a long term income. The advantage is the period of receiving income depends on how the contract will be. And after 3-5 years, there will be return on investment and easy as that. However, you need to acquire a large amount of money in order to invest on this kind of income.

Portfolio Income - This kind of income talks about the stocks and bonds. In a nutshell, investing on buying stocks of a large and stable company in order to gain high profit. The advantage of this when it is stock there is a high amount of return from your investment. However, it is unstable sometimes because there will be fluctuations. You should know how to play well in order to generate high profit. 

Active Income - Kind of income in which you directly put a lot of efforts on your business or work. The advantage of this when it comes to business is that you control your time but the major disadvantage is when you are already generating loss due to incompetence in business. You should have enough knowledge to apply in your business and to survive every problem in your business.

In conclusion, the best way to invest a 1000 dollar is to invest it on portfolio income particularly to bonds (if you want to have a secure and stable income) because in 5 years there will be already return on investment. Always remember that there is no easy money nowadays. Most of the time you need to have the ability and knowledge in order to generate and gain high profit or income.

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