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Type of Income

31-March-2022

The basic form of income from your time and effort is salary and wage. Although it serves as a main income, there are plenty of other income alternatives you can get so you can obtain financially independence condition.

As a business, it's also not impossible to obtain income besides capital. But keep in mind that there are no shortcut for it.

By knowing your source of income, you can find potential to add more for your personal or business needs. There are some type of income you should konw:

1. Commission

Commission is an extra income based on your performance. The better your performance is, the more commission you get. Unfortunately not every job offers commission. It often only used in a target-oriented job such as Sales.

If you're working on Sales field, you probably get cuts from percentage of selling price. It can be an alternative way for companies to reward and motivate talents.

 

2. Capital Gain

You can get capital gain from the difference of selling price and purchasing price. It's not only applicable to products, but also stocks. For example, you bought stocks for Rp.5.000.000, then sell it when it valued at Rp.10.000.000, you get Rp.5.000.000 profit from this activity.

Some example of capital gain is from stocks, obligation, and mutual funds. Also, collection item and prized commodity such as gold and real estate can also results in capital gain.

Before doing so, you need to calculate selling period, both short and long-term. In short-term, investment profit is obtained from selling stocks within a year. Meanwhile, long-term shares ownership needs more than a year to obtain.

3. Dividend

You can get dividend by buying stocks in a company. People often think that dividend is the same as capital gain. Although both involve stocks, but they're different. Unlike capital gain, dividend can only be obtained from company profit a certain period.

Transaction period for profit is also different. There are cum date system in divident, which is the time of obtaining dividends for investors who are registered in stock ownership. To obtain divided, investment or stocks must be bought before cum date deadline.

This is different than stock transaction for capital gain. The right time for transaction is during ex date. The ex date period is the cum date period when investors are not included in share ownership so that they do not become dividends.

 

4. Income from Rent

Compared to others, renting assets or propoerties is the most reliable one. You'll get monthly payment straight to your bank account.

Also, propoerty ownership is a good investment opportunities, because when they're not available for long-term rent, you can sell them. Propoerty values also increase over time, so they bring more profit to you.

But keep in mind that you need to be responsible for your asset and propoerties, which costly in maintenance. These maintenance costs can take a large part of the income from your rental price.

 

5. Royalty

Knowledge, concept, idea, and art is an intangible asset that can be profitable, that's royalty. This income is earned when your intellectual property is loaned to a business entity for commercial purposes.

Royalties apply to several media such as music, products, videos, images, photos, designs, books, and so on. Unfortunately, this type of income is not for everyone because getting royalties requires special skills.

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INSIGHT AND KNOWLEDGE

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