24 August 2012

3 Kinds of Income by Merry Riana


3Kinds of Income by Merry Riana

I recently read a book by Merry Riana, she is a motivator and financial consultant. In her book, "A Gift From a Friend", she told us that there are actually 3 kinds of income in this world. I think it is important for us to learn about it before we decide our future.

1. Salary

This is the most common income that is received by employee who work at company. To get this income, people have to work at company from 9 to 5, 5 days per week. Then, company will pay for their time and work. In order to get salary, employee have to work continuously every day. If they stop working and coming to the office, they will lose their monthly salary.

2. Investment

The second type of income is investment. We receive this income when we invest some of our money in particular assets like stocks, or in saving account that bank provides. The interest we receive as the result of putting our money in bank is called income from investment. Another example is, when we buy some particular stocks and hoping that the price of stocks will increase in the future. The profit that we get from increasing price of stocks is known as income from investment.

We should note the differences between investment and salary:
- You need some money to fund your investment.
- Investment has higher risk than salary. Remember that we give our time to receive our salary. On the other side, we have to give up some money to receive our income from investment.
This is the reason why only few college students choose this path.

3. Income Generator

Income generator is also known as passive income. The main idea of income generator is we don't have to always work to get our income. The examples of income generator are:

  • Profit from business
  • Property
  • Royalty from books and songs
  • Car Rental
  • Franchise
Of course, we have to work really hard to build our income generator before we can enjoy it in the future. Building business, franchise, and own property takes time and work hard. However, at some point when we have enough income generator to give the lifestyle that we desire, we can stop working and still receive our income every month.

So, which one is your favorite?:)


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