The goal of most individuals is to achieve some level of financial independence. At this stage we will be able to live quite comfortably without having to be concerned about basic necessities. We would have acquired assets that will be actively working for us and generating income so that we can live without having contend with the grind of a 9 to 5. The question is how can you get to that level? One thing for sure, it is almost impossible to achieve financial independence with only one source of income.
There are basically three types of income:
- Earned income – Income generated from working
- Capital gains – Income generated from selling an asset above the price where you bought it
- Passive income – Income generated by assets you own without having to do additional work. eg renting a room in your house.
Most individuals reading this will be familiar with the grind of going to a job or running their own business to earn a salary. Indeed whenever we want to improve our financial standing we always seek to get a better paying job or get a second job. The problem is sometimes we neglect to look at other opportunities all around us to earn. Years ago I owned a 1990 Nissan Sunny motor car. It was old and the AC wasn’t working and decided to take a loan to upgrade. My step father suggested to me instead of selling the car why not put it on the road as a taxi and that income would be able to pay the loan and leave a surplus. Over time I owned 2 cars and 2 coaster buses. The income from these far exceeded my salary as a senior officer in a financial institution where I was working at the time.
Over the next few weeks my blog will feature tips on earning and pit falls to avoid. We will look to share new money making tips and acquire new skills. I hope you will join me on this journey.