Identify Your Source of Income, Where Does it Come from?
Income in general is often associated with the amount of money that a person receives as a result of something done, done or invested. The income is then used or spent to meet various needs of life for a certain period of time. For a family head, especially a man as a husband, the income he earns is of course intended to meet the needs of all family members, himself, his wife and children. Managing income wisely can reduce debt bondage that accumulates for the necessities of life.
Sources of Income
A person’s income, whether single or married, can come from several alternative sources. Some people only get income from one source of income from one type of work, and some may have more than one source of income from several jobs done or from investment results. The following are 3 types of potential sources of monthly income, including:
1. Active Income
This income is a monthly income derived from work. Examples of active income include salaries, benefits, bonuses. A person can have active income from more than one source, if he is able to work from two or more types of work activities, such as running a side job, running an entrepreneur, and others.
2. Investment Income or Portfolio Income (Portfolio Income)
As the name implies, investment income is a producer that comes from investment results. For example, mutual fund investments, stocks, bonds, and others. A person can invest by investing a certain amount of money or capital according to his ability, and get profits from the money invested. The greater the capital invested, the more likely the income from the investment will be. The income from this investment is usually directly proportional to the investment risk.
3. Passive Income
Passive income comes from a system that has worked, for example, a multi-level marketing business, a property rental business, a franchisor, patents and others. With the system being implemented, it does not mean that someone does not make an effort to earn income. To generate passive income, one must still try to run the existing system, so that the financial pace continues and generates income. An example of a house rental business, someone has to renovate the house he owns so that it is suitable for tenants to live in.
To increase monthly income, some people can do a combination of several activities in order to increase the coffers, in addition to the main income that is usually received regularly. That way, your income can come from a combination of the 3 types of income mentioned above.
Both those who have small or large amounts of income still need a way to manage their income so that they can survive to be used to meet needs within a certain period of time. The period of receipt of income can vary between individuals, can be daily, weekly, monthly, quarterly and others. All management aims so that income can provide benefits both for today, and for the future until old age. For those who have a small income, they have to compromise on various needs. Indeed, no matter how you set it up, a small income will still run out. So, the strategy to deal with it is to increase income through additional work activities.
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However, for those who already have a relatively large amount of income, this is the challenge, that this income must be used to meet needs, not just ride through for lifestyle satisfaction. Expenditures should be minimized, according to priorities, especially for those that are consumptive based on desire alone.
Between Wants and Needs
Everyone wants to have a large income and be able to fulfill all the desires and needs in life. Income can be earned by working or investing as a way to earn money. However, in the end the money held as a form of income cannot fulfill wants and needs simultaneously. Therefore, it is necessary to have financial management by providing a priority scale by prioritizing all things that are necessary, because the greater a person’s income, the more desires they usually have.
If you do not have a source of income. You can do credit counseling
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