1. Earned Income
As you can see, from the diagram here this is earned income. And the first thing you pay is the highest taxes caused you worked for money.
2. Portfolio Income
Its also called capital gains. So if I buy a house for lets say $100,000, I sell it for $200,000, the $100,000 is capital gains.
3. Passive Income
Passive income for me, I have a business whether I work or not, money comes in. And you’ve seen me, I’m not here, am I?