Understanding Income
Understanding Income: Definition, Types, and Importance Income is the money an individual or business receives in exchange for providing a good, service, or through investing capital. It is one of the most fundamental concepts in economics and personal finance, directly impacting the standard of living, lifestyle choices, and financial stability of people and organizations alike. ๐ What Is Income? In simple terms, income is the money earned or received over a specific period. It can come from various sources such as wages, salaries, business profits, dividends, rental income, or interest on savings and investments. ๐งพ Types of Income 1. Earned Income Comes from employment or self-employment. Examples: Salary, wages, tips, bonuses, freelance earnings. 2. Passive Income Income that requires minimal effort to earn and maintain. Examples: Rental income, dividends from stocks, royalties. 3. Portfolio Income Comes from investments. Examples: Capital...
Comments
Post a Comment