Define "income"

"Income" as a basic business vocabulary word, is fairly
broad.  It can be defined, basically, as money received on a regular basis, for work or
through investments.  "Income," for a business, is often considered to be the money
earned by the business that goes over and above what was spent on
production.

Depending on the type of business you are
talking about or who you ask, there are several different categories of income, and many
examples within these categories.  The two most basic categories pertaining to
individuals or households
include:

• Aggregate
  income (also called earned income) is the combined
  total of how much money a person or a household makes, before any taxes, benefits, or
  payments are taken out.  Generally, aggregate income is earned by
  working.


• Discretionary is
  money available to spend after all taxes (or other withholding
  expenses) have been paid.

More specific
sub-categories of income are things
like:

• Residual
  income: this is money earned on a continuous basis for doing something
  one time.  Residual income comes from things things like renting out a piece of
  property, earning quarterly or annual dividends on an investment, or earning royalties
  on a product as it sells (such as publishing a
  book).


• Leveraged income:
  this is money that a person earns as a result of someone else working.  You may have
  heard of the "pyramid scheme" in business (also known as network marketing).  The person
  at the top of a pyramid earns a percentage of everything his team members sell.  Though
  the man at the top doesn't do the footwork, he is rewarded for having others on his
  team.  Leveraged income can work in many other ways within a company, but this example
  is one of the easiest to
  understand.


• Passive income:
  as a sub-category, passive income basically defines income that requires very little (or
  no) work to maintain.  This includes things like investment dividends, internet
  companies which can be set up to almost run themselves, or (like above) income from
  things like rental properties.