Income, Wages, Interest, Residuals, ROI


If you continue to do what you have always done, you will get what you have always gotten. I’m not sure the original source, but if you want to make progress in life, you must move from your comfort zone.

What we receive in income and where it comes from makes a lot of difference in lifestyle and freedom to do what we want. One of the basic assumptions of Economics is that people would prefer more of a ‘good’. Most people only think about their current and future wages. If that is their measure, they are trapped by what someone can or will pay them. They will  always be searching for that next promotion or pay raise. Interestingly, in a company someone moves up only because either the company expands or someone leaves or dies. Also, the corporate structure is a pyramid. The person at the top is paid huge income; the few directly below the top make very high incomes and it goes down as we go down the pyramid and the number of people broadens.

Income and wealth are the determinants for many things and the aspiration for everyone. The amount they want may differ and the degree to which they are willing to ‘sacrifice’ to attain goals differ, but that is for another topic. This post is about broadening your idea of “Sources of Income”.

Your present life is largely the result of choices you made in the past. To change the future, different choices need to be made. Active income or wages is from work, hourly or salary and bonuses. Passive income comes from investments or past work as part of payment. For example, actors, musicians, network marketing and insurance brokers receive residual income based on the work they did as an ongoing payment. Return on Investment (ROI) is the receipt of income from a wide variety of sources: Real Estate (passive), Stocks and Bonds, Business, etc.

Current events are making us more aware of the need to broaden our income sources. This is even more  obvious to the baby boom generation as they are reaching what they thought was retirement age. Personally, I have actively built income in all areas on non-wage/salary categories. I have stayed away from further investments in Real Estate and the stock market for the last few years. My current favorite for my future is Ambit Energy. My team is going gangbusters; lighting up the sky.

My choice is strictly based on economic reward, both long term and short term, not for love or passion. Whatever yours is, make a sound decision and most importantly broaden your horizons.

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About Thomas O'Grady, PhD

Thomas F. O'Grady received his PhD in Mathematical and Statistical Economics from the University of California at Berkeley. Since the age of 12 he's been interested in entrepreneurial activities. Full Details

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Disclaimer: The analysis, views and opinions expressed in this blog are personally my own and do not necessarily reflect nor are meant to imply in any way they are the opinions of Ambit Energy.I am an Executive Consultant with Ambit Energy. Analogies used are to assist with general understanding of the postings and are only to be examples.

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