There are 4 ways people can make money. They are as followed: working, self-employment, business ownership, and investing. Workers are the backbone of the economy. People who are self employed are innovative. Business owners and investors make the most money.
Worker
They trade time 4 $. The more time they trade the more $ they make. Most of them get health, dental, and vision insurance from their employer. Some of they get a 401k or a pension. There are many wonderful jobs for workers. Workers get active income.
These are people that create there own company and manage it. They are still trading time 4 $; but they are doing it for themselves instead of someone else. Independent contractors are self employed, because they are their own boss. People who are self employed are very creative. They can make much more money than a worker, but they can also loss a lot more as well. When you are self employed there is no safety net. You have to figure it out on your own. No one can fire you and there's no coworker to bother you. As long as your company is profitable and marketable you will make a lot of $. You can pass your business on to the next generation. Being self-employed helps you create generational wealth. The self-employed receive active income.
This is someone who owns a business, but does not manage it. They may have created it, bought it, and/ or inherited it. They have workers under them that do all the heavy lifting. Their job is to make sure the business is profitable. Once its very profitable they sit back and relax. You also get tax breaks most people don't get. Business owners make passive income.
In a nutshell if you're an investor, your money makes $! Assuming you make a good investment. If you make a bad investment you will lose money. There are many ways to invest. Some are better than others. It is a good idea to invest in real estate, treasuries, and annualites. Investors receive passive income.
https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee
https://blog.bidsketch.com/everything-else/self-employed-vs-employed/
http://sbinfocanada.about.com/od/startingadvice/a/The-Advantages-Of-Owning-Your-Own-Business.htm
http://www.investopedia.com/university/20_investments
Rich Dad Cashflow Quadrant By Robert T. Kiyosaki, Sharon L. Lechter
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