Friday, August 14, 2020

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3 Types of Income: What is keeping you poor?!

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This post may contain affiliate links or sponsored content. For more info: Disclaimer

If you aren’t financially stable at this very moment then your current way of living is keeping you poor. It’s time to roll up your sleeves and make a change!

The information that I’m going to tell you is meant to empower, not belittle you. I’m going to help you become the master and architect of your destiny so that you can live a happy and fulfilled life.

Once you have identified where you are in your finances, you will then know the steps that you’ll need to take in order to build wealth and financial peace of mind. Are you ready to learn how to break free from the shackles of poverty and create financial abundance? I’ll show you how today!


Being poor is connected to feeling that way

I can relate to this because I struggled financially after an “ex-business partner” scammed me. I felt hopeless. I felt poor because I felt like I was stuck with bad credit forever. Thankfully, I utilized my skill sets to pay off debt and I’m in a better situation now.

Being in poverty and the stress associated with it can actually reduce your brainpower. Being and feeling poor requires so much mental energy that it’s much more likely to make mistakes and bad decisions than those with bigger financial cushions.

The path that you take on your journey throughout life depends on the mindset that you adopt. If you possess a scarcity mindset like I did in the past, you’ll always feel stuck and won’t make progress. Not only does it not feel good, it makes failure a self-fulfilling prophecy.

After being scammed, I definitely felt hopeless. However, I knew that I needed to move forward and change my circumstances. I tried to live from a place of abundance and started developing new skill sets that would better help me escape from having little to no money. I was hired by a friend to help him with his business with social media marketing and managing part of his business. The income earned from that paid off a significant portion of my debt which I was super grateful for and still am. All it took was a change in my mindset that forced myself to acquire additional skill sets to make myself valuable to others to change my life for the better.

With that said though, I do not take whatever successes I have in my life for granted. Building financial independence is and will always be a grind. Everything that happens to you in your life begins and ends with the decisions that you make. If you’re tired of struggling, then you must decide to stop struggling. You can’t blame others and hope that things will magically change. Your mind in trying times will be either your best friend or your worst enemy. There is a saying that a “Positive mind will lead to positive outcomes.” Choose to have a positive mind and create as many positive outcomes in your life as possible.

If you want to create financial wealth in your life, it will take GRIT and the conscious decision to do whatever it takes to achieve financial independence. So it’s important that you realize that 3 types of income exist. It is possible that one or two of them may be keeping you poor. To have knowledge is power, but knowledge without action is a waste of time as far as I’m concerned. I remember taking various online courses through Skillshare, Udemy, etc. Although I learned some awesome skillsets, I didn’t apply some of them so I wasted time. I tried to be a “Jack of All Trades but I ended up being a Master of None” for some time. It’s much better to focus on a limited set of high-income skills. Let’s now dive into the 3 types of income to keep you from being poor!


1. Active Income


With active income, you’re trading your time for money. This is the worst kind of income to make but most people start with this type of income. The biggest disadvantage of active income is that the money that you can possibly make is severely limited. The worst thing about active income is that once you stop working, your income stops. In our society, we’ve been taught that active income provides a sense of security. However, this is far from the truth! You could be fired, outsourced, or replaced at any time! How many of us have known relatives that worked themselves to the bone only to be “let go” by their company that they were loyal to for years? By making an active income, many people are stuck and aren’t developing the necessary skills to generate long-term wealth for themselves.

This is exactly why many of the wealthiest people do not follow this path. Bill Gates didn’t limit himself to being a salaried worker. He became an entrepreneur and decided that he had the power to transform time into money to generate revenue for himself when he created Microsoft.

3 Types of Income: Active Income
Active Income seems secure…until it isn’t!

2. Portfolio Income

This type of income is also known as capital gains. This is when you take the money that you earn and invest it into assets. These could be bonds, stocks, or real estate. The only problem with this kind of income is that money is only made when you sell your assets. Not only that, when you have capital gains you get taxed at a pretty high amount depending on the country where you live. It’s possible to get capital gains exemptions if you are selling your personal property.

One example that will help you understand this is if you buy a house in the United States. You decide to live in that house for a few years and then end up selling it. You will get an exemption and pay less in taxes depending on the capital gains made on that property. If it’s a rental property and you personally didn’t live in it when you sell the house….then you’ll pay a higher tax on that property.

Portfolio Income is a great way to build wealth but it gets taxed and you usually have to sell assets in order to see any money.

3. Passive Income

Of the 3 types of income that you can make, you’ll want to make it your life goal to make passive income. With passive income, you have money that is working for you…even when you’re sleeping! With this type of income, during the initial stages of setting up your passive income stream you’ll be trading your time for money. It will take a substantial amount of time but once it is set up properly, you’ll be making money on autopilot every single day. You’ll still be required to put in some time to monitor things from time to time but this is way better than working a 9-to-5 job. In my opinion, this is the best way to achieve financial independence. When you can create an online business that generates passive income, there is no limit to the amount of money you can make. You can provide services and products worldwide and have customers from all corners of the world! Once you achieve financial independence, you’ll be able to do cool things like exploring the world as a digital nomad.

3 Types of Income: Passive Income is the best way to make a living!
Work hard to build passive income and then let it rain!

3 types of income: Passive Income is the right choice!

Passive income will give you the freedom to utilize your time to do the things that you want at the time of your choosing. You can sleep in, spend time with family and friends, or develop additional skill sets to aid in your business. If you’re in a poor financial situation, there’s always hope. Definitely take the time to build a passive income stream. It’s one long-term investment that your future self will thank you for building. I hope you learned how important it is to develop a passive income stream today. Let me know in the comments below what steps you are taking in order to generate passive income!



Digital Nomad Sagehttps://www.digitalnomadsage.com/
Remote Worker | Millennial | Entrepreneur Mission: To provide informational value to fellow digital nomads & remote workers while helping them to achieve financial freedom by ditching the 9-to-5!

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Remote Worker | Millennial | Entrepreneur Mission: To provide informational value to fellow digital nomads & remote workers while helping them to achieve financial freedom by ditching the 9-to-5!
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