Types of Income in Business for Kids

Types of income

Lesson Details:
August 03, 2020

Video Transcription: In this video let's talk about the types of income that are possible there are very different ways to earn money this video is brought to you by Appy Pie’s Academy most people when they go to school and they go to college even they learn about the safe and stable earned income where you basically trade your time to do something for someone else and they give you they give you money it's regular salary income that's what most people understand that it's mentally very easy to grasp and that's where everybody sort of starts not many people start thinking about passive income semi passive income and I'm not suggesting that you push your child into some online business schemes not at all but what I am suggesting is that they have to have the all the options available to them and they have to be aware of all the options so that as they grow up they can make choices based or on more information what's passive income and semi passive income essentially let's say you make a website it gets traffic that's passive income you know if you make money from that traffic and it's important to understand that almost all passive income is also semi passive income because you have to put some work into it a website requires some maintenance even if you make a youtube video that even that gets you ad revenue and it seems like you don't have to do anything while you do because you have to promote it a little bit maybe you have to make a second video maybe you have to answer some emails so yeah it's 90% passive but it's not 100% passive so there is always work in this passive income businesses online there's a lot of work behind it that makes it semi passive very rent very seldom is it really truly passive and if it is you're probably making less money than if you added fuel to the fire so to speak and put effort into it to grow it and so if it's semi passive you usually passive income ideas our better earn money are more effective when they're semi passive when you up consistently fuel them of course there's investment income that's something that your child will learn after making a little bit of money and if you explain to them how to invest that money intelligently so that the money starts working for them and your child will and should learn about different kinds of business model there's subscription business models there's subscription like business model very good example is the gardening or lawn care business guess what even though it's not a subscription its subscription like because the person who buys the service their grass grows back every month or however you know whatever interval so if as long as you do a good job they'll bring you back and you're gonna make a lot of money from the same customer and that's something to learn right that regular customers are amazing and maybe some you something you do online will be ads or if you do e-commerce you'll learn it's you know there's products that people buy once or this product that the products that people buy once and again and again and again and again so again the same customer can come back many times and those are so much better so these are all business elements that your child should at least be aware of they're not gonna learn all of these from any single business every business just has one or two of these that people can learn but it's important to talk to your children about these and just make them aware and at least in in your business brainstorming these are things you should bring up so that they start at least thinking about it for example how do you make if you're making a product for e-commerce and we've talked about this if you're making a product can you make a product that is one-time use okay just one-time use versus a consumable product that people consume and they need it again for example a soap soaps are traditionally not hard to make at home there are simple recipes and guess what people use them soap ends people buy them again and so you get repeat customers and it's much better okay so anything and also what's interesting about soap is soap is used in every household well let's say almost every household in the world so you have a tremendous mass consumption product can a billion in multi billion-dollar industry and its repeat buying so people come back to it so something as simple as that that people can make at home of course it's hard to sell because it's so competitive but if we just if we just suspend that point for a second you see that just very simple commonplace products can have tremendous potential and as long as the business positioning is right you can introduce your child to such potential and another interesting thing to ask your child is when you're brainstorming like is it better let's say to get a job for one day do a job for a day and earn two hundred dollars versus gaining residual or passive income from that and earning $1 a month for the rest of your life or two dollars a month what would be the breakdown and of course everyone has different tastes because you'll learn about well if you make the $1 a month now in 10 years that $1 is going to depreciate it's not gonna be as valued as much right so you get to discuss the merits of long-term income versus short-term income which you can do with money up front and getting personal earning percentage from your money if you just put it into a CD and the rate and so all these conversations stem from one another and they're almost-kiss Cade style once you talk about one thing it leads to the next thing leads to the next thing leads to the next thing.

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