15 Digital Income Terms Every Investor Needs to Know

"Active income: Earnings that require your direct, ongoing participation to be generated. A salary, a billing hour, a consulting fee. When you stop working, active income stops. The defining characteristic is that your time and your output are inseparable. Most high-income professionals are almost entirely dependent on active income, which is precisely why building outside of it matters."

"Passive income: A widely misused term. True passive income is generated by an asset you own that operates without your involvement. A more accurate framing is yield on deployed capital; the return produced by a productive asset running independently of your labor. Not a side hustle. Not a second job. A system that truly earns while you go about your daily life."

"Leveraged income: Income generated at a scale or velocity that your personal time alone could not produce. Leveraged income separates output from hours. A business with a team, a rental portfolio managed by a property firm or a managed digital asset all produce leveraged income because they deploy capital, systems and other people's expertise rather than your own calendar."

"Cash-flowing asset: Any asset that generates regular, recurring income rather than requiring a sale event to realize value. Real estate rental income is the most familiar example. Dividend stocks are another. The defining quality is predictability - a cash-flowing asset produces yield on a schedule, making it plannable and stackable within a br"

Active income requires ongoing direct participation, so earnings stop when work stops. Passive income is defined as yield on deployed capital produced by an asset operating without involvement, not as a side hustle or second job. Leveraged income separates output from hours by scaling through teams, rental portfolios managed by firms, or managed digital assets that rely on capital and systems rather than personal calendar time. Cash-flowing assets generate regular recurring income without requiring a sale event, such as real estate rentals or dividend stocks. Predictability makes cash-flowing income plannable and stackable over time.

Read at Entrepreneur