Income: Diversification & Multiple Income Streams

What are the three types of income?

• Aggressive income, Passive Income, Active income

• Foundation income, investment income, passive income

• Passive income, active income, investment income

• Money market income, active income, investment income

Which of these statements describes a business plan?

• a) A letter detailing why and how an individual thought of a business idea, and why they hope to make it a reality.

• b) A formal document that describes the different aspects of a new business such as its target market, start-up costs, expenses, and revenue.

• c) A summary of a business detailing how it performed over the course of the past 7 years.

• d) A book that lists all the people responsible for the inception and growth of a business, given to employees as a company souvenir

Match the example below with the income type.

Dale works at a bank and earns $3,000 a month, plus benefits.

• a) Investment Income

• b) Active Income

• c) Passive Income

Match the example below with the income type.

Julia receives $2000 a month interest from A CD he opened at his bank.

• a) Investment Income

• b) Active Income

• c) Passive Income

Match the example below with the income type.

A year ago, Stella purchased 50 shares at $10 per share, whose value today is $16.

• a) Investment Income

• b) Active Income

• c) Passive Income

Xavier just started working toward becoming a freelance content writer. He created his profile on a website called upwork.com. He saw a lucrative content writing opportunity and decided to apply for it. He drafted a well-written proposal for the client, and bid as low as possible. But he was not chosen for the project. Why is it likely that this happened?

• a) Because there were no work samples available for the client to see.

• b) Because upwork.com is not a website for freelancers.

• c) Because sending a proposal to a client makes them think that the freelancer is desperate for work.

• d) Because bids should be placed based on the nature of work and skillset of the freelancer.

Opting to start a new business for an additional income stream will probably not yield any returns at first. But it might be the most profitable income stream for an individual in the long run.

• True

• False

Kingsley is a full-time tax preparer. Apart from his tax preparation knowledge, Kingsley is skilled in playing the violin, making cupcakes, and writing short stories and poems for children. Lately, Kingsley has been considering creating another income stream to help build up his savings, which currently are close to nothing. Which of the following are potential ideas Kingsley can think about to make some extra active income? More than one answer may be correct.

• a) He can start his own bakery business using his savings.

• b) He can work as a freelance tax preparer.

• c) He can teach violin to kids and adults during weekends.

• d) He can work as a freelance short story writer