There are different types of income. The knowledge of these types of income gives you the option to choose how you want to earn income. Lack of knowledge in this area has made many to focus only on what they know – working for money.
If you want to achieve financial independence and freedom, you need to know the different types of income, their characteristics and the ones that works out best for you. There are three basic types of income namely:
1) Earned Income
2) Portfolio Income
3) Passive Income
This is the most popular form of income, working for money. Rich Dad in ‘Rich Dad, Poor Dad’ by Robert Kiyosaki calls this bad income because of the disadvantages that go with it. You are taxed before you get to see your salary, the tax rate is often higher than other income types. You have no control over your income. You cannot double your income even if you belong to a powerful union. You depend on your employer to give you a raise. Your time is not yours. You are essentially trading in your life for your salary. This income type has little or no leverage. You cannot hire someone to help you with your job. You cannot transfer your job to your son. Your salary stops when you stop working. This income type gives minimum control.
This income comes from paper assets like stocks, bonds, money market instruments, businesses etc. Your return on investment in portfolio income depends on your level of financial education. An experienced investor can use stock options to protect his position while the average investor goes in naked (fully exposed to market fluctuations). The taxes here are lower. In a business, your profit is taxed rather than turnover. You spend first and get taxed on what is left, if any. Hence the business owner has control over his taxes unlike the employee. There is more control in portfolio income depending on the investor. If you own a stock of a company, you can control your entry and exit price, if you know what you are doing. You have more control if you own enough shares to sit on the board of the company. If you own the company (entrepreneur), you have full control.
This is income from real estate, intellectual property (books, music, patents etc) etc. You do the work once and get paid virtually forever (you, your descendants etc). You make money while you sleep or away on vacation. Here, you have full control. You can decide to double your income by doubling your assets or stepping up your marketing. You control your time, income, taxes etc. Rich Dad calls passive income good income.
As an employee, you are not constrained to earned income only. You can enjoy portfolio income by investing in an asset class you are familiar with, or starting a part time business, and passive income by investing in real estate, writing books, music, scripts, inventions or whatever you are good at. If you want to achieve financial freedom, you need to diversify your income sources. Depending only on earned income is a symptom of financial illiteracy.
– Usiere Uko is editor of www.financialfreedominspiration.com and author of Practical Steps to Financial Freedom and Independence – www.amazon.com/Practical-Steps-Financial-Freedom-Independence/dp/147006832X .
Have you ever sent your child, servant or subordinate on an errand to perform a task who shows unwillingness to do so? Imagine such a child, servant or subordinate murmuring or frowning his face and reluctantly left to perform the task. He came back after a while with the job well done but not without his frowning face, murmuring lips and dragging feet. How will you feel towards him though he performed the task well?
On the other hand, you might have found yourself in a situation where your boss, parent or pastor asked you to do something at a time when you are not willing or in a mood to do such, though you wished to do it. Since you couldn’t disobey him, you eventually went ahead to do the job against your will, having a feeling of being forced to do it. Can you really do it with excitement, and derive fulfilment and satisfaction? I guess the whole time you spent on the job will be miserable just because it was done with lack of interest.
In my years of service to God, I’ve seen and heard Christians times without number complain about their work for God. It is obvious from their words, actions and lifestyle that they are not doing the work willingly. They murmur about the time they spend for church service, meetings, choir practice, and others. They complain that the church/ministry work is affecting their work, business, family, leisure and social life. The truth is that this attitude is harmful to their progress and will not benefit them at all. A careful look at their life will show you how stagnant and unproductive they are. It is high time such attitude is dropped.
God’s commandment is this “Do all things without murmurings and disputing”. Philippians 2:14. When you murmur or complain, you disobey God; and He is not pleased with anyone who does so! Any labour that is done with such attitude is wasted and has no reward.
Dearly beloved, do not be carried away with so many church activities that are not beneficial to your spiritual growth, be diligent to do the work with a perfect heart. Graduate from the class of those who complain about anything they do in church, so that your labour will not be in vain. The next time your pastor or leader ask you to do something, endeavour to do it heartily, cheerfully, willingly, as unto the Lord. Are you a pastor, Sunday school teacher, children minister, chorister, usher, missionary, church member? Whoever you are and whatever you do for the Lord, do it with understanding. Do not murmur. Do not complain; for God loves a cheerful giver. He will surely reward your labour of love.
But how can you really work for the Lord your God with understanding? How can you take up responsibilities in ministry without complaining? How will you spend several hours in leaders’ meetings that affect your business time without murmuring? The answer is right there in the word of God and we will discuss this together in the second part of this message. I love you.
– segun eshorun