If you want to retire early, you need to make sure that you’re focusing on the right strategies now. Just working hard to get a raise probably isn’t going to get you there.
There are three main types of income: ordinary, portfolio, and passive. Ordinary income is working for money in the form of paychecks, raises, commissions, and bonuses. Portfolio income includes paper assets such as stocks and bonds. And passive income comes from real estate or intellectual property, including patents and books.
Contrary to popular belief, ordinary income is the least desirable type because it’s time consuming and heavily taxed. Investments are better because they require little time and effort from you, beyond the initial need for cash or credit.
If you want to retire early, stop worrying so much about ordinary income and start finding ways to build your portfolio and create passive revenue streams. For more ideas, check out our Instaread on Retire Young Retire Rich.