An income stream refers to a regular flow of money generated by a business or investment. It can come from various sources such as rentals, dividends, interest, or any other form of residual income.
Passive income refers to earnings derived from a rental property, limited partnership, or other investment in which a person is not actively involved. Passive income often gives the benefit of regular earnings without actively working.
A Passive Income Generator (PIG) is a business or investment vehicle that produces passive income, which can be used to offset passive losses incurred from other passive activities, particularly in the context of rental real estate.
A passive investor is an individual who invests money into a business, project, or property without taking an active role in managing or operating it. This hands-off approach allows investors to potentially earn income while leveraging the expertise and efforts of others.
Portfolio income consists of earnings derived from various investment activities including interest, dividends, royalties, and capital gains from the sale of investment property. It differs from earned income and cannot be used to offset passive activity losses.
A tax shelter is an investment strategy that provides tax advantages by generating more after-tax income compared to before-tax income. These investments can produce before-tax cash flow while creating tax losses that can shield income from other sources from taxation.
