Smart Moves

5Growing your money

TYPES OF INCOME

At the end of the day, there is only so much you can cut down your expenses by, and there will be a point in your money journey where reducing your expenses no longer becomes realistic. Once you are in control of your expenses, it's time to increase your income. Increasing your income and creating new income streams, while also maintaining your current level of spending, is the true key to developing your wealth. Let's explore the seven different types of income.

1. EARNED INCOME

Your earned income is the money you receive from working a job for a salary or wage. The first step for anyone looking to increase their income is reviewing their pay with their employer. Are you due for a pay rise? When is the next round of promotions? What is the market rate for the job you do? If your current employer is not receptive to a pay increase, you may need to look elsewhere. Use an online job-search website to research other similar jobs in your city, and review how the remuneration compares to your current salary/wage. The information in chapter 6 can help you with this process. A 10 to 20 per cent increase in your salary or wage can make a huge difference in relieving financial stress and reaching your goals faster.

2. PROFIT INCOME

Profit income refers to selling products or services for more than they cost to earn a profit. Typically this ...