GROWING WEALTH IN A SURE SYSTEMATIC WAY

While many know what to do to earn a living, few know how to grow what they have now into their dream wealth state. Lack of this knowledge make many to wonder about the riches of others and some to think that all depend on luck. Those blessed with physical strength expend it in doing many things that they believe will generate more income and thereby achieve financial independence. The question is how many have reached their goals through this? Very few, if any, ever.
The truth is not just that wealth growth is possible, but there is also a sure systematic way of achieving it. Growing wealth requires income generation. Income generation is categorised into two divisions for purpose of wealth growth namely, active and passive income. The other category is residual income which is also passive income. Actually all residual incomes are passive income though not all passive are residual. Let look at this one by one.
Active Income
These involve working for a particular pre-determined sum. This could be salary, wages, commission etc. The basic xteristic is that the worker knows how much is going to earn in a given period of time based on certain parameter. In this arrangement, he has to engage in some specific work before he can earn income (which is usually commensurate with work done). What this mean is that it is only when he works that he earns income. Also, the income is more or less within a range that it hardly breaks away from.
The implication of this is that his level of income just oscillates within a range with little or no capacity to grow wealth. In order to get more money, many decide to work extra by doing more than one job. This hardly lands them in the desired dream financial state as there is always limit to the productivity of an individual no matter his potentials. A great percentage of the world is in this category.
The problem is that while more work may generate some extra-incomes, it makes the individual more financially dependent on whoever he is paying him and on the work. In short, work hardly liberates anyone from financial dependence nor does employer. This is not limited to those who are doing paying jobs (salary and others) alone but even the self-employed.
Passive Incomes
This type of incomes is based on receipt from work done or investment. It is named passive because the earner does virtually nothing apart from the initial work or investment to continue earning the income. Such work or investment generates streams of income continuously at specific intervals. One of its beauties is that it does not stop the person from his daily activity nor make any demand as per time, effort and resources he has originally expended. Example of this is dividend and capital appreciation from stock, rent/lease income from real estate, income from mutual fund, forex managed account, interest income from loan etc. In this category, probability of wealth growth is high and continuous.
Residual Income
This is a type of passive income where certain income inflow is more or less guaranteed periodically. Unlike some passive income, the earner is sure of the receipt, even the amount and the time. Example is agent commission and rent from real estate. The only work for the agent is to get the tenant. If the contract stipulates 5% commission on all rent paid for the whole period of the tenancy, such agent continues to enjoy stream of income from the monthly or yearly paid rent with virtually no additional work. The same is applicable to the owner of the property whose only substantial cost is the property investment. Other examples are autoresponders’ affiliate programs, school/educational businesses, debentures etc.

Having seen the various divisions of income, it should be clear to a wise person the steps to take to consistent wealth growth. All that is required is to engage in a very good economic activity that will supply active income. Once this can take care of basic need the next wise thing is to divert all remaining time, effort and resources to activities that will generate passive and residual incomes. Beautiful enough, it is very easy and convenient to have many of these, and the more investments you have on this side, the more and better your chance of growing wealth and being financially independent and bouyant.