/Not Knowing About The Three Types Of Income Can Keep People Poor

Not Knowing About The Three Types Of Income Can Keep People Poor

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The knowledge of how money and income works is one of those ultra-boring topics. But it is also the reason most people struggle financially. Because it’s hard to get our butts to learn it. but the more you think about it, especially if you have struggled financially, the more it makes sense to start learning this stuff if you haven’t.

Here is the summary of the information in this video:

There are 3 major types of income:

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1. Earned income

  • Pays highest in tax
  • Work really hard and pays the most tax
  • You work for money (the government doesn’t want you to work for money but to hire employees or invest)
  • Focus on savings
  • Typically have a 401K (but Savings and 401K are highly taxed!)

2. Portfolio income – Capital gains

  • Second highest tax to pay
  • Are usually professional people with degrees or PHDs.
  • Usuallly have stocks

3. Passive income – not a job

  • Pay the least tax
  • Can have “Phantom income” which is tax you don’t pay

Watch the video to learn more: