3 Types of Income

Three Types of Income: How Music Buying Royalties Can Help You to Achieve Financial Freedom It does not matter what financial rewards you seek in your music career, there are three types of income that one should be aware of and know exactly what their sources are. Earned, portfolio and passive are the three kinds of income and what differentiates these three are the tax rates and their sources. https://www.mediafire.com/?3bbqac2eyee5boe

Tax rates Of all the incomes, earned income is the highest taxed, i.e. about fifty percent and is typically earned as an employee.

The second highest taxed of all the incomes is the portfolio income, i.e. about twenty percent and is usually generated from mutual funds, bonds and stock assets.

The source of passive income is from rental income and is always generated from real estate.

The passive income taxes can get as low as zero percent, if planned properly. In this regard, the assistance of a tax accountant or a competent tax attorney can be taken to lower the tax to zero percent legally.

Royalties In order to generate passive income, buying royalties is a primary way for musicians. But to receive this income, you must first generate an asset; a beloved composition or a great song and protect it with a patent or copyright. Either physical or intellectual, you must know how to

legalize a property from counterfeiting and infringement. A competent property attorney can guide you through this.

Passive income’s flow is not necessarily affected by the networks, businesses, real estate prices or markets which are one of the best things about the passive income. Rather, it holds the value and worth for as long as people want. If you are able enough to create a much devoted fan base and expertly market your talent so that they keep buying or renting your intellectual property for years, then a secure source of passive income can be assured.

Some other sources of royalty income are: inventions, acting or character portrayal, documentaries, videos, films, screenplays, plays, jokes, books, poems, novels, stories, songs and music. Process, systems and methods as found in software and geographic property that holds oil, gas or minerals are also sources of royalty income by buying royalties.

Financial

Freedom

http://www.bubblews.com/posts/the-state-oil-royalties-

received-last-year-from-1-38-billion-lei 1. A thorough financial education is extremely important in order to know how earned income is converted into portfolio income and passive (royalty) income. The way musicians can convert their earned income into passive income is by investing in the music careers by purchasing new equipment. However, most musicians work part time on their music and full time in any organization hoping, that the hard work will pay off some day and they will be able to work only on music all day long as a full time job. Until the music does not provide with a source of income and that, too, full time; part of the earned income should be invested in other vehicles for portfolio and passive income. This should be a part of the plan to become financially comfortable and secure.

2. Financial freedom from the portfolio and passive income should be achieved, which is the lowest taxed income of the three as soon as one’s portfolio and passive income exceeds one’s living expenses. If your monthly portfolio and passive income equal $3500 and the monthly expenses total $2800 then you get $700 above the monthly expenses without doing anything.

All in all, when you are receiving a stream of income which is independent of your working, you are free. By buying royalty, this financial freedom can be achieved partly or completely.