Igor Cornelsen has always emphasized on the benefits of maintaining a passive income stream. This type of income can be put to various uses – it can be used for securing a bright future, it can help people close to retirement ensure that their old days are spent without any worries, and it can be a great source of safety and security in the present time. Passive income and investment is something that Igor Cornelsen, a renowned businessman in the Brazilian stock exchange, is an expert at. Here, he explains the different types of income and why passive income is a lot more important than the other options –
Earned Income – This is the income that is generated by people working full time. It usually involves a 9 to 5 job where salary and other perks are offered. Earned income can not only be derived from working but can also come from a business or consultation practice. Basically, all activities where money is earned on the basis on work, time or efforts spent on an activity fall under this header. This might be the most common source of income but it is of a fixed and inflexible nature. When a person stops working, they no longer get earned income.
Portfolio Income – This kind of income is generated by selling investments – buying cheap and selling expensive. It is a trading income. Trading in paper assets like ETFs and stocks, real estate profits, and asset trading like car and collectibles generate this income. For earning portfolio income, a person requires a lot of money to begin with. On top of that, it is important to stay up to date with the markets and build up a good knowledge base. Portfolio income is also subject to heavy taxation and this is a definite downside.
Passive Income – This is the third and most valuable kind of income. Some examples include income earned from rental property, passive business income, intellectual property income from patents, books and other content, and MLM income.
Passive income does not suffer from any transience. It is always there to support a person because no amount of effort is put into this kind of income. As an added bonus, passive income keeps growing because of environmental factors as time passes.