Active Income Vs Passive Income Ppt

Aside from how the income is earned from these two sources active vs.

Active income vs passive income ppt. Active income requires physical presence and time in order to produce revenue. Income potential for active income source your earning potential is based on your profession or the type of services you rendered. As will be discussed further in my next post the difference between active and passive income is more than a definition and if you physically work to earn the dollar. Active income on the other hand is money earned in exchange for performing a service.

Understanding where your money comes from. However there are three different types of income streams. Passive the key tax differences between these two holding periods are the tax rates at which gains and income are taxed and. She cannot use these active losses to offset the passive income.

This leaves 500 of passive income that is taxable. Active income means getting paid for the hours you put in or for a certain result. Passive income is money earned on an investment or work completed in the past that continues to make money without any additional effort. Passive income is a steady stream of revenue that does not require active maintenance.

The most basic of money management principles is to make sure that you have more money coming in than you have going out. Most types of passive income are derived from real estate property while other types of passive income are. Passive income on the other hand provides a great opportunity for you to increase your earning potential however it takes time and focus to achieve a passive income level that can replace your active income. View these s and learn how to earn passive income powerpoint ppt presentation free to view.

The 500 in losses from her llc interest is active in nature. What is passive income vs active income. In this scenario tina can offset the 3 000 passive income with the 2 500 passive loss. Active income is the most common way to make money.

Income for which services have been performed. So which form of income. Passive income can be the difference between living comfortably and living well hint. But there is also passive income and after some effort at first earning passive income is much easier.

For example hourly wages salaries commissions and tips are all examples of active income. Passive income may take an important time or financial investment to setup however it can provide non active income for years. Active passive and portfolio. This is vital if you want to find financial success.

A happy life isn t solely about makings lots of money sound investments. Miranda marquit finance 101. You put in time capital or other resources and that makes you money. Of course this means that you need to have some sort of income.