Achieving Financial Goals By Earning An Income (taxes)

Which of the following is NOT considered a type of passive income?

• Royalties from a book

• Interest earned on a savings account

• Wages from a part-time job

• Rental income from a property

What is the main difference between earned income and portfolio income?

• Earned income is from working, while portfolio income is from investments.

• Earned income is always taxed, while portfolio income is not.

• Earned income is typically higher than portfolio income.

• Earned income is more reliable than portfolio income.

What is discretionary income used for?

• Paying for essential needs like rent and food

• Saving for retirement or emergencies

• Investing in stocks or bonds

• Spending on non-essential items like travel or entertainment

What is the main benefit of understanding different types of income?

• It helps you determine your tax bracket.

• It allows you to compare your income to others.

• It helps you make informed financial decisions for the future.

• It helps you negotiate a higher salary.

Which of the following is NOT an example of a gig worker?

• A freelance writer

• A musician performing at a concert

• A salesperson working for a large corporation

• A delivery driver for a food delivery service

What is the difference between a dividend and a capital gain?

• A dividend is a share of a company's profits, while a capital gain is the profit made from selling an investment.

• A dividend is a fixed amount of money, while a capital gain is a variable amount.

• A dividend is paid annually, while a capital gain is paid only when an investment is sold.

• A dividend is a type of passive income, while a capital gain is a type of earned income.

What is the main difference between earned income and passive income?

• Earned income is taxed at a higher rate than passive income.

• Earned income requires active work, while passive income does not.

• Earned income is more reliable than passive income.

• Earned income is typically higher than passive income.

What is the most common source of earned income?

• Tips and commissions

• Profits from selling goods or services

• Wages and salaries

• Gig work

What is the primary reason why the unemployment rate is considered a significant indicator in the financial world?

• It directly reflects the overall health of the economy by indicating the number of people actively seeking employment.

• It provides insights into the effectiveness of government policies aimed at job creation.

• It helps predict future trends in consumer spending and economic growth.

• It reveals the level of competition in the job market and the availability of skilled workers.

What is the primary benefit of pursuing higher education beyond high school, particularly during challenging economic times?

• It guarantees a higher salary and a more fulfilling career path.

• It provides access to specialized training and skills that are in high demand.

• It increases job security and reduces the risk of unemployment during economic downturns.

• It fosters a sense of personal accomplishment and intellectual growth.