Majority of us, the main and only source of income is our job. Am I correct? In this case, we rely on the first type of asset: ourselves. Our physical self, that includes our strength and mental competence as in a sense "hired" by our employer for a certain salary per month or commission of the sales we make. The type of income that this asset produces is active income because it requires us to actively work for the money that we get.
If we are younger, this asset may increase the income it produces by working overtime, taking on jobs or sidelines that could augment our income. Of course, getting promoted in our jobs would also lead to bigger earnings through an increased salary.
However, our capabilities decline as the years go by. Why? We all know that our capabilities to do overtime work and other sidelines and our chances of getting promoted become less and less as our body grows older and approaches retirement age.
If we are younger, this asset may increase the income it produces by working overtime, taking on jobs or sidelines that could augment our income. Of course, getting promoted in our jobs would also lead to bigger earnings through an increased salary.
However, our capabilities decline as the years go by. Why? We all know that our capabilities to do overtime work and other sidelines and our chances of getting promoted become less and less as our body grows older and approaches retirement age.