- Earned income is money from work primarily through the labor market
- Salaries, wages, commissions, bonuses, or self-employment
- Unearned income is money typically derived from investments
- One of the easiest ways to begin earning unearned income is to deposit money into a savings account
- Interest & Dividends
- During your lifetime financial journey you can make money three ways: employment, as a lender, and an investor
- Investors are people who put their money at risk thorugh the partial ownership of businesses
- If the company is profitable investors get to share in the profits
- Dividend is the investors share of the profits
- All investing involves risk, and in general the higher the degree of risk the higher opportunity for return
- Objective risk can be measured using probabilities
- Subjective risk refers to personally developed probabilities based on expectations, fear or worry