There Are Two Types Of Extra Income

Category: Finance.

Inflation and economic trends require families to have two incomes just to stay even with their expenses. It is a good idea to be prepared for bad economic times rather than to simply hope for the best and suffer if the best does not come.

It may be that, even two incomes, in the future will not be sufficient. Families should have multiple flows of income to guard against facing an insecure future. Wealthy people have always known that it is important to have more than once source of income. It is very important to have a source of extra income. If one of their income sources failed for some reason, they always had fall back sources to carry them through. The loss can have a dramatic impact on their lives, and it can take years before things get back to normal for them.

People with ordinary, average incomes have generally faced problems if they lose just one source of income. Physical and emotional health can also suffer as a result of financial uncertainty and stress. If one income source disappears, the others will still be there to lessen the blow. Having more than once source of income, offers a safety, or extra income net. Having extra income gives individuals time to reorganize and consider their options. There are two types of extra income.

Everyone alive to day can appreciate the benefits of having extra income. Linear income is extra income that is earned on an hourly, or monthly basis, weekly. Residual income is income that results from working hard one time and reaping the benefits of this work for many years into the future. No future commitment from either the worker or the employer is associated with this kind of income. A single effort is rewarded repeatedly. They earn only for the time that they actually work on a daily basis.

Individuals receive linear income through a job or profession. Some people earn a higher linear income than others. Individuals should begin by focusing on one residual extra income effort per year. Smart people typically attempt to move away from linear income to residual income by obtaining extra income that will secure their future retirement. The Internet provides many options for extra income, but individuals must be careful when making a choice. There are many scams and get- rich- quick schemes online that are not legitimate and do not create the income streams which they claim to.

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