Passive Income Type One: Business Income

This is the fourth article in this week’s series that began March 26, 2007 with the article entitled “Active vs Passive Income”.

If your method of trading/investing involves spending time creating a set of procedures that anyone else can follow to generate income from trading/investing, then you have business-type income. A basic feature of this type of income is that it flows regardless of whether you do any more work after you create the set of procedures. Of course, there is the possibility that your set of procedures results in losses instead of profits, but at least you didn’t spend any of more of your time causing that to happen beyond the time put into creating the set of procedures.

Traders/investors who create automated or semi-automated systems have business income.

The book Cash Flow Quadrants says this is one of the two types of income that lead to financial freedom.

continued tomorrow ...

Copyright 2007 Raymond T. Lee. All rights reserved.
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