Personal Finance: Areas and Income Sources

Study Notes

Personal finance encompasses income, spending, savings, investing, and protection.
Understanding income sources is fundamental for financial health and achieving goals.

Represents cash inflow for individuals and households to fund lifestyles, save for the future, and meet financial objectives.
Serves as the foundation for the personal finance roadmap.

Monetizing Skills and Interests:
- Assess personal skills, knowledge, and expertise for monetization.
- Exploiting these skills can lead to new income opportunities.
Exploring Freelancing and Side Gigs:
- Identify talents that can be offered as freelance services.
- Utilize online platforms to connect with clients for side jobs.
Starting a Small Business:
- Align business ideas with market demand and personal skills.
- Develop a business plan with defined goals, a target market, and financial projections.
- Consider e-commerce to widen customer reach.

Active Income:
- Earned through specific services or tasks within a stipulated timeframe.
- Includes salaries, commissions, tips, and fees for services rendered in various employment settings.
Passive Income:
- Generated without active involvement, such as through rental properties or dividend-paying stocks.
- Possesses the potential for steady income with less ongoing effort.

Critical for risk management and robust financial planning.
Contributes to financial stability, independence, and the capacity for higher earnings.
A diverse portfolio helps mitigate reliance on a single income stream.

Exploring rental properties or subleasing through platforms like Airbnb can provide passive income.
Renting unused space generates consistent revenue and contributes to overall financial security.