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Trade time for money
As a general rule, we have just one source of income namely our salary. This source of income is limited, fixed in an employment contract. Salary is often expressed in hourly wages (how much I earn per hour). We exchange our time for money. To increase this income you must either work overtime, ask for an increase or find a part-time job. As this type of income is calculated per hour and there only 24 hours in a day, there is a limit which cannot be exceed knowing that we sleep between 6 and 8 hours. This type of income is inherently unstable. If you ever get sick, if, for any given reason, you cannot get to your workplace, or if your company decides to fire you, you will lose this income.
Alternative income option
Another way to make money is to invest money to make money. It’s about making short-term or long-term investments that help secure your money and increase the value of your wealth.
Generate passive income
And finally, the third strategy, used by only 1% of the world population is to multiply its sources of income. This method, called passive income, is not related to productivity or time.
The main advantages of passive income
- Income from the wage is by nature capped because they are correlated to time. Passive income does not suffer from this constraint: since it is not tied to time, it is not limited.
- There no need to be present in a particular place at a particular time to benefit from it.
- As active income is usually the one with the heaviest tax, some legal arrangements could allow you to pay fewer taxes or benefit from deductions on your dividends.
So investing money and multiplying sources of income can, while providing less effort and time, make earning more than any usually paid job very possible.