Explain how you have varying degrees of control over the three types of income, and how much control you have over each.

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Mathematics

Emery Sosa

3 August, 23:46

Explain how you have varying degrees of control over the three types of income, and how much control you have over each.

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Xzavier Estes · Answer 1

There are 3 types of income.

1) Earned income

2) Portfolio income

3) Passive income

Earned income is income earned after exerting time and effort in you part. Salary is an earned income. If you stop working, you'll stop having an earned income. The more time spent working, the more income you generate (overtime pay).

Portfolio income is better identified as capital gains. This is earned when you sell an asset at a higher price than when you bought it. The difference from the selling price and its cost is the portfolio income. Your portfolio may include stocks, real estate properties, and other assets (antiques, cars).

Passive income is income generated without exerting effort from you. This income is generated from you bought or existing assets. Rental income is an example of this. You will always receive rent from you own real estate property.