In the financial world, there are various ways to generate income and profits that can be achieved in various forms. The following are among the differences in the types of income that can be generated either by individuals, companies or institutions.
Salary
Usually, many individuals choose to work with an employer. This is because an employee will get a predetermined payment either monthly (salary) or daily/hourly (wage).
Commission
Additional income given when a task is successfully completed such as a program or project. In business, commissions are often given according to the amount of product sales.
Interest rates
The form of profit obtained through loan services provided to customers. This method will usually be used by bank institutions by providing loans to customers and charging an interest rate to be paid monthly.
Rental
Rental income is often used by those who own real estate assets, buildings or premises to generate ongoing passive income. Parties looking for premises to run their business will rent from the owner and comply with the contractual agreement provided.
Return on Capital
Return on capital refers to the increase in the value of assets owned. When an individual decides to sell his assets such as shares, at a higher value than his purchase price, he will get a multiple return on capital.
Dividends
Dividends are the distribution of part of the profits distributed as a reward to individuals who invest, for example, in a particular company or group. It is the choice of many individuals because of the low risk with the guarantee of continuous profit according to the set period. For example EPF and ASB.
Royalties
This is a form of payment for the ownership or licensing of a property such as a patent or copyright used by another party. Examples are music royalties and oil royalties.
