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Active vs Passive Income
There are 2 types of income:
Active Income: You are trading time for money. In order to make money you must perform something. Every day you start from zero.
Passive Income: You do not have to be present to generate income. Things like real estate, stocks, bonds are sources of passive income. You are literally making money while sleeping.
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The Cashflow Quadrant is a concept from Robert Kiyosaki's "Rich Dad Poor Dad" which represents the different methods by which income is generated:
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