3 Income Pillars

What are the 3 pillars of income?

  • The 3 pillars of income are – 

Active Income: is money you work for. You earn active income when you show up for work and trade your time and energy for money .e.g wages and salary

Passive Income: is income that requires very little or no effort at all. If you own a house for example, and your tenants pay monthly rent; you are making passive income where money works for you 

Interest Income: the cost of using someone’s money. For example if you put your money in a bank account, that bank has your money; they will pay you a certain % of interest of the money that you keep in the bank 

What are assets and liabilities?

  • Along with these 3 pillars, it is important to understand what assets and liabilities. The secret to your wealth building process is increasing your assets and decreasing your liabilities: 
  • Assets: a resource that brings in money (gold, shares in companies, land plots, etc)
  • Liability: a resource that drains out money (cars, debt, taxes, expensive holidays, eating in expensive restaurants, expensive phones clothes etc)