I guess you’re a little confused about what exactly is the whole concept of active income, so that’s why you are here. What I’m going to do is explain what active income is in a very brief video, all you need to do is wait a couple seconds because it’s coming up.

Hi there I’m Billy Keels and I’m back once again to  share some tips and strategies with you that will help you go out and make more money, take control of your free time, and ultimately, live with less stress. So if it’s your first time watching one of these videos, I’m gonna go ahead and recommend that you subscribe to the YouTube channel KeePon Cashflow. Make sure that you like the video so you can get all of the videos as soon as they all come out, and leave a comment, try to keep them short and snappy, that way it doesn’t take a lot of your time. At the same time, you’re going to find value in this video, so why don’t you go ahead and share it with other people because that way, you’re helping our community to grow with other willing, cool and like-minded people like yourself. 

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So let’s get this whole concept of active income. I was talking with my accountant not too long ago and we were going back to do some planning, making sure that a particular tax situation was as optimized as possible going into the new year, and we were also doing a quarterly check. In the past, one of the things that we’ve talked about, especially for the really busy professionals, is this whole concept of being an active or passive investor. And so let’s piggyback on that a little bit. 

This is also one of the things that Tom Wheelwright says, “If you want to change your tax, you have to change your facts”. In order to do that, you need to be more educated which is why you’re here, to understand what is  active income. There’s also another video that talks about the other side of the coin which is passive income, since a lot of people are talking about that. So hopefully by the time you’re watching this, the other video would be available and you would be able to juxtapose the two. 

Active Income: Why You Should Keep it in Mind?

Let’s get to the whole concept of active income and why you should keep it in mind. At the end of the day, there are certain ways that your income is taxable. You need to be aware and understand how your income is taxed as you start to go out and earn it. A lot of this is under the IRS tax codes that’s US based but if you go around the globe, most countries follow a very similar pattern. 

So what is active income? I was also watching and listening to a one of people I enjoy listening to, Dr. Buck Joffrey, he had a great conversation with Tom Wheelwright and they broke it down as well. I thought that since I spoke to my accountant about it and I had heard that conversation with Dr. Buck and Tom, I really want to share about active income.

Active income is a huge bucket, it’s a way that you’re earning income that’s relatively active. What it means is that you are doing something to earn that income. But within that active income, there are three sub buckets: 

✔The first bucket is the earned income. These are your salary, wages, and commission that you may make in your high paying sales job. But the thing is, this is the type of income that is taxed the most. It is what it is. 

✔The second bucket is the ordinary income. This is a type of income that comes from pension class, defined contribution plans, 401k, individual retirement arrangement (IRA) and simplified employee pension (SEP). These are taxed at an ordinary income rate, which is also the highest income rate. 

✔The third bucket is the investment or portfolio income. If you are doing interest payments that are coming back after you have placed capital. This type of income is taxed once again at investment portfolio rate.

These are only some of the ways that active income is coming in. And also keep it in mind that active income is typically taxed at the highest rate which goes back to the saying, if you want to change your tax, you have to change your facts. 

I hope you find this short blog valuable. If you wanna take a look at the other video, please check out this link so you can see the other side of the coin, that’s passive income. This will help you understand where you wanna be, more active income or passive income? 

If you’re interested in understanding more more about how you can go out, continue to work in the corporate job that you like, and be able to create new alternatives for yourself, just click HERE. You can pick up a free ebook by leaving your name and email address, and that way we’ll also be able to stay in touch with one another and engage on other topics. 

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Lastly, make sure that you check out the Going Long Podcast with Billy Keels where you can find the absolute best expert as well real mainstreet investors that relates to real asset investing and doing that long distance.

Your time is greatly appreciated. Wishing you a beautiful day until then, go out and make it a great day!     

 

You can also check out my latest podcasts and collaborations here keeponcashflow.com/podcasts/