Indian FIRE Community

In continuation to previous post Business income: The type of income in which you trade people for money. Wait, that's human trafficking right!!!!.  That's not what I meant. Income is obtained by employing people and trading their skills/expertise to make money. This is best source of income. And all the wealthy people fall under this category. You can't find 9-5 employee owing a Lamborghini unless you are a CEO of a multi billion dollar company. Advantages: Best source of income. You will have team of specialised people working for you to make money Best scalable type of income You can start small and build an empire. Example Microsoft. All the capital that ever went in the company was 5000 dollars. Disadvantages: You should be ready to take risk It takes time to build a brand. Apple didn't start out as an apple what it is today. A trillion dollar market cap and most valuable company in the world Royalty income: The income earned by creativity comes under this category...

There are different types of income. Each income has it own advantages and disadvantages. We will go through each one of them, understand them and know what should be our best pick. 1. Earned income 90% of world population falls under this category. In this type of income you trade money for your time. Advantages: You will get steady paycheck. Your Income will depend on how much value you bring to employed organisation. There will be no risk of your capital. Disadvantages: This income is not scalable. Sure you can increase your expertise and earn more, but you got only 24 hours a day. This income is safe till you are employed. If you got fired, you will lose the income. This form of income is taxable highest. Hence your Gross Income will be less than your Net Income 2. Portfolio income: In this type of income, money makes you money. Income from stocks, bonds, Mutual fund, fixed deposits comes under this category. Only capital growth is considered in this type of income. Advantages:...