TYPES OF INCOME
Establish your current and future financial positions.
Questions to ponder:
- If you are in Gen X and should you be disabled – what will be the formula to keeping you in a financially good state be?
If you have died in an air crash – what will the formula to ensuring continued financial security for your family be?
To establish your net worth – what formula will you use?
If you wanted to find out your cash flow – what would be the formulas to apply?
Working with the formulas will lead you to consider and contemplate your income model. Generally, there are three income models:
- Employment Income
- Business Income
Being able to establish the right income model is paramount to your success in the different stages of your life and at the various checkpoints of your timeline.
For example, if you do not transfer some of your employment or business income to an Income Generating Assets portfolio, chances are you may not be able to create sufficient investment income in the future.
It is not how much you earn that is important. Rather, it is how much you keep.
THE QUESTION NOW IS – WHAT ARE THE INCOMES DO YOU HAVE EACH MONTH?
- Only employment Income? then most probably you are struggling each month – what are you going to do about it? Blame the system, blame the government or blame everyone around you.
- You have another choice – be educated and learn how you can create a second income.
- Look for a wise man or a mentor and get engage immediately
- Start putting aside 10% – 20% of your income each month no matter and start saving – no excuses – if there is no money to have a mobile phone – close the account, change your lifestyle and everything will change.
There are generally 3 types of income:
1. Employment Income (EI)
2. Investment Income (II)
3. Business Income (BI)
Most young adults derive their income from the Employment Income model. There is nothing wrong with it but if you truly desire to achieve financial independence you must be disciplined and systematically transfer part of your earned income to an investment portfolio to create future streams of investment income. Without creating an investment portfolio while you are still working, there is simply no way you can move from Man @ Work to Money @ Work in the future.
Let’s visit the 3 income models.
This category of income is the most common among all income earners. The method of deriving this income is from Man @ Work. The vulnerability of this income model lies in the need for you to keep working in order to keep the Employment Income stream flowing.
While you are engaging on this income model, it is prudent to start allocating up to 30% of your Employment Income to an IGA Portfolio so that over the long term, the IGA Portfolio can generate sufficient investment Income – to replace the Employment Income. When you are able to do that, you have arrived at an important checkpoint in your timeline – Financial Independence. It is from this point onwards that you can choose to work because you want to and not because you have to.
On the other hand, should you ignore the importance and need to allocate a certain portion of your Employment Income into the IGA Portfolio to generate Investment Income in the future, you are putting yourself in peril. There will come a time when you are no longer able to work – either in situations when you reach the retirement age or worst still, by circumstances of retrenchment and displacement.
Start creating an IGA Portfolio today – to buy some hope for yourself in the future.
Investment Income is generated from the IGA Portfolio (Income Generating Assets Portfolio). This is an important portfolio to be established by every one of us. Without this strategic portfolio, you can never achieve financial freedom or financial independence. Once established, it will give you a sense of accomplishment and purpose. This is where you can generate income through Money @ Work, Your IGA Portfolio can be established with regular flows of savings from the EI (Employment Income) or BI (Business Income).
However, many have failed in maintaining this strategic financial portfolio. They have been caught by the trap of chasing after a lifestyle that they cannot afford to maintain. They did not have a disciplined and systematic method of building the important portfolio over the long term.
It is getting more common to see an increasing trend of employed individuals exploring the viability of starting their own businesses, while still keeping their employment. For some, it is an excellent option – if they can cope with the demands of running a business and keeping their job. This has also to be done in an acceptable and ethical manner. But for many, it often proves too taxing for them to maintain the balance of commitment and quality on both engagements. Business often comes across as lucrative in providing a greater potential for wealth accumulation. While it is an avenue opened to all, not every one may havewhat it takes to succeed in this demanding method of creating wealth – the pressure, risks, hard work, ability, talents, business networks, advisory teams, the competitive edge, the financial reserves and several other factors.
However, once a well-operated and proven system has been established, this business will provide you will an extremely profitable platform to generate a good stream of income which will help achieve your many lifetime financial plans, goals and dreams. Viable and manageable businesses can also be part of your IGA Portfoilo.
Yet, being able to generate a good income simply from business itself does not entail you to financial success.
As the saying goes, “It is not how much you earn that is important, it is how much you keep that matters.” Only by having a disciplined and systematic method of savings and wealth accumulation will you establish an IGA Portfolio.
Before jumping into this category of income models, it is important for you to do a self-assessment to determine your suitability and ability to succeed in this method of wealth creation.
SO WHAT ARE YOU GOING TO DO NOW?
- Attend our 3 Days Class for FREE
- Learn all the opportunities in the global market
- Learn and network with the people in the class
- Network will determine your net-worth
If you work and work and work you are not going to go anywhere; start some kind of activities and you be all good – Call Sharon @ 09199104104 and attend her session for FREE!!!!
Article by: FINWAZE