What Is Income?Income is money generated through the exchange of labor, goods, and services or by investing capital. Individuals usually earn wages and salaries, while businesses profit by selling their products and services.
Active or Earned IncomeEarned income is relatively straightforward to understand compared to other types of income. In addition, it is also what you typically use for purchasing assets that will provide you with passive or portfolio income in the future.
Passive IncomePassive income comes in two forms. The most effortless form of passive income is due to owning assets. Typical examples are real estate passive income due to owning a rental property or investing in an apartment building.