It has been said much that if we want to be successful, we cannot have just one source of income. Many say that rich people have at least 7 income sources that fund their lifestyle plus more. I could not agree more.
Having just one source of income is really not enough nowadays especially having so many temptations to purchase things online. The cost of living globally has also risen up so if your income will not follow, you will truly be left behind.
These are the 4 types of income you must have in order to be financially successful on your way to financial freedom:
1.Active Income.
This is the most basic form of income that we have. This is basically trading our time for money. When you are employed, working in an 8-5 job is basically selling your time for salary.
To maximize Active Income, you got to compute your hourly rate. If you are being paid Php 800 ($16) per day, it means an 8-hour shift is paying you Php 100/hour. Working for 24 days in a month will pay you Php 19,200 for that given month.
But what if you can find a job or an opportunity that where you can make Php 2,000 ($40) per day working just 4 hours? That means you are getting paid at a rate of Php 500 ($10) per hour. Not only that you can make more money, you will also have more time for your family, passion, exercise, start a new business, and all that.
Where can you find this? Sales jobs, freelancing, and starting your own business can give you the potential to earn more by the hour to maximize your Active Income.
2. Portfolio Income.
This type is income derived from holding a portfolio of assets particularly stocks of companies and real estate. You make money in this type of income thru capital gains when the asset you own appreciates in value.
When you invest in the stock market by buying stocks of corporations, you own a portion of that business so your money gains when the business improves. This is a passive type of investing as you do not influence the growth of the asset. It means that income from stocks is beyond your control.
As for your real estate ownership, you can wait for the property to appreciate in value so your portfolio grows and you may decide to sell it in the future for a bigger amount. You can also buy properties and influence its appreciation through improvements in the property. This includes repairs and upkeep of old properties to sell it at a higher price.
The only thing with portfolio income is that aside from not being able to control the price appreciation, it is also quite slow. This means that relying only to portfolio income is not enough. It is a great compliment in addition to your existing active income.
Make sure that you are earning active income more than your monthly needs in order to slowly invest the excess to generate portfolio income.
3. Passive Income
This type of income is everyone's dream! Passive income is making money while you sleep or doing something else.
Not all income are created equal and passive income is one of those income that can create you real fortune if done right. This income can be derived from a lot of different ways like real estate property rentals, running a big business with a lot of employees, stock dividends, and investing to business co-ownership to name a few.
A 6%-8% annual return of your money is a good measure of a healthy passive income. Now you may be thinking that this is too low! Yes there are other opportunities that can give higher returns but also entails higher risks. When I talked to rich people and some of my VIP clients, they are already happy with at least 6% annual return of their money in order not to lose it.
Using a 6% annual returns, it would mean you would need accumulate Php 10 Million worth of investments that gives passive income in order to have a modest Php 600,000 a year without doing anything. It may be not that big, but it's a great start.
What I would like to highlight here is that this shows you how important having a big active income especially at the start in order to have the funds to invest in passive income. You build your assets slowly until you reach that critical mass that you do not need to work anymore and your needs are being paid for by your assets. That's the ultimate goal! Financial freedom.
4. Residual Income
The fourth type of income is an unpopular one and is called residual income. This is the type of income where you will get continuous income in the future when you are not actively working as a result of your active participation today.
People don't realize that there is a way to make sure that you can ensure your future income by working for it today. There are businesses that gives this type of opportunity and is a great way to work towards financial freedom. Imagine what you can do when you are receiving residual income in addition to your big active income.
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This can be achieved by joining a sales organization and starting to build a team. When you build your own sales team, you gain leverage. You are able to multiply your time through other people. One of the greatest secrets of rich people is that they have more time compared to normal people. They achieve this by employing people in their company or building a big team of business partners and entrepreneurs.
Imagine having a team of 25 people working with you for 4 hours in a day. That means you get an extra 100 hours everyday! Now when you make just Php 50 per hour of their work, you will make Php 5,000 every single day! That beats active income all the time! This is what I have been working on ever since. I started building teams at age 21 and that allowed me to grow my income astronomically!
Another thing that I like about this income is that you won’t make this income unless you help the people who are with you to be successful too! Now that’s a great way of doing business!
Do you want to have an opportunity where you can make residual income too?
The good thing is that I am looking for people to join my team of insurance entrepreneurs! I am in a mission to develop a new breed of leaders and business owners and being in the insurance industry is one safe way because we can build a big business, earn a huge income, with little capital involved. Now that's what you call good business!
Not to mention, we are committed in growing our team to achieve financial freedom thru the 4 types of income mentioned in this article.
If you are interested to explore this opportunity and learn with me, feel free to message me here. Go ahead! Give it a try!
If you reached this article up to this point, it means that you are in search of something big. This might be the opportunity you are looking for to change your life! Let's work together! You can also reach out to me at my FB page http://facebook.com/djdimaliuatofficial
DJ Dimaliuat
Leader of Leaders
Insurance Entrepreneur
