3 Ways To Generate Income: Active, Passive and Portfolio Income – Many people wonder, is it really possible to have seven sources of income at the same time? Warren Buffet, an American billionaire, says that if you want a secure financial future, everyone should try to have at least seven different sources of income.
Most people think about jobs or businesses when they imagine an income. This means most people rely on just one source of income in their lives. However, there are numerous sources of income that even folks with full-time jobs can do: simple jobs that take up some spare time.
But are you aware that you could actually have multiple sources of income even while you’re working? There are different types of income, such as active or passive income, or a portfolio.
You may be hearing about passive income and portfolio income for the first time. Let’s talk about what they mean. This could help you reassess your current financial situation and take steps to ensure that you have a lot of different types of revenue streams, which will make your family and you financially secure.
If you’re looking for ways to earn an income, it’s not impossible. There are many types of incomes that a person can earn and find success with. Some examples include active income, passive income and portfolio income. In short, it means having enough money from every source possible.
Let’s start by understanding what this means.
Three Ways of Earning Income?
1. What does Active Income mean?
Your active income is how much money you make every day, every week, or every month. This can come from your job or business. It basically means that there are days when you’re actively working to earn it. That could include freelance work and side-gigs as well.
In some countries, retirement is not only a time where you get to spend more time with your loved ones. It’s also an interesting way to earn income as well because it is a product of what you’ve accomplished during your lifetime. Most people utilize their active income in order to meet their daily needs, and those for family members.
Using various income sources is essential to a person’s success. Even though one might not be the biggest source of income, it is still an important one. What this means is that an active income may be making you money from a job or business. But passive and portfolio income might be bigger than that.
In some cases, the passive income and portfolio income that can come from becoming an investor might be larger. However, these jobs or businesses or pensions are necessary to maintain one’s financial stability.
Stable and regular income means that someone pays you for your skills and efforts.
2. What is Passive Income?
Investing in passive income as a business owner can be really tricky. That’s why we’ve created a passive income calculator to make sure you’re getting the most for your money. This way, you’ll know exactly how much passive income you could be earning every month!
A classic example of passive income would be a study course that you’re selling online. You’ve already made the course, and you’ve uploaded it to places such as Udemy or Coursera as well as others. When someone buys a copy of your course, these websites are responsible for depositing that cash in your account.
There are various ways to make money without working. One easy way is to start a blog and do your research to find niche markets that you can sell products or services to. You can also register an Amazon.com or create a Facebook marketplace page, which can help you set up sales quickly and easily with minimal effort. With the right strategy, it’s possible for your blog posts to continue attracting traffic every time you publish them.
If you’re struggling to build your passive income, royalties from books, photographs, artwork, and other sources can help. As a matter of fact, this is the best way to start earning an additional income from one or more source without needing much investment.
3. What is Portfolio Income?
A portfolio income is a great way to both earn money passively, and dominate your industry. You can choose when or how you’re going to work on the portfolio as it grows over time.
As opposed to a commission-based income, portfolio income pays you over time through investments. It’s worth noting that it might not come in as quickly as others.
The portfolio we’re discussing here is your investments. It can consist of annuities and retirement plans, savings plans, securities, mutual funds, Exchange Traded Funds (ETFs) and many more.
Set paying advertising on autopilot with these automated systems that provide a steady stream of potential visitors. There is no need to continually work on the campaign in order for it to run smoothly and profitably, making it ideal for new businesses.”
In some countries, the home you own, gold jewelry you have, as well as collectibles such as art, rare liquor and stamps, coins, currency notes and other stuff all count towards your portfolio. These assets keep growing in value year after year.
The first thing to know about investing in a portfolio is that the income that you earn is locked unless you liquidate or sell any of the assets. And their prices will continue to rise as long as you don’t decide to move on from them. With stocks, ETFs, and Mutual Funds, there are also dividends available for your investment portfolio.
If you’re actively trading on stocks, commodities, currencies and cryptocurrencies daily, the potential to make a passive income is limited. In these cases, the potential for active income is greater.
7 Ways to Make Money
When your favorite business leader speaks about the seven income streams that will get you rich, Warren Buffet actually refers to investing our money from active income. We can use our education, experience, and skills to launch an online business or some venture that provides us a steady stream of money even if we don’t work for it every day or even occasionally.
Instead of starting a new venture, why not consider combining two businesses together? You’ll have many more sources of income. For example, combining an online store and an online course will give you three different sources.
Now, with the portfolio income added, you can make it a total of seven sources. You could invest in various things to create a portfolio and generally, a good one would include bank savings plans, stocks, ETFs, currencies and cryptocurrencies, and other assets. You can select any four ways to invest for your portfolio.
Another way to make extra money would be to work as a freelancer. This means, besides your regular job, you could find more spare time and create a side income using your skills.
Building multiple streams of income can be difficult and time-consuming, but it’s important to do what you need to do in order to succeed. Earning passive income is important, and becoming an active investor will lead to more opportunities. You’ll also have a portfolio that provides greater reward and freedom when you learn how to invest.
The importance of money over time
More importantly, the global financial crisis showed people who lost jobs that it is nearly impossible to support themselves without an income. Without savings, people who were out of work would not be able to meet their basic needs.
We understand that these investors need time to make their money work for them, so we’ve made sure there are no deadlines. Though the demand for courses or products could be low during pandemics like these, you’ll still have plenty of income coming in. This doesn’t mean your business is done for.
If a portfolio of stocks and other assets is considered, then losses may be made in the short-term but quickly recovered. Having options for all three types of income can make you financially stable.
It’s important to differentiate between three types of income– active, passive, and portfolio– to make sure you’re prioritizing the right cultivation methods. Start by taking a small step with your portfolio to get something that people will need and require for passive income.
The best way to make a passive income is by investing your active income actively. It’s not at all hard to have an active, passive and portfolio income if you exert extra efforts. Or you can choose help from a financial advisor.