What's what in finances: Income What's what in finances: Income

What's what in finances: Income

Money (or some equivalent value) that an individual or business receives, usually in exchange for providing a good or service or through investing capital.

Income is the consumption and saving opportunity gained by an entity within a specified time frame, which is generally expressed in monetary terms.

Income is received from earning wages by working and making investments in financial assets such as stocks, bonds, and real estate.

For private individuals, ordinary income is usually only made up of salaries and wages they earn from their employers pretax. For businesses, ordinary income is the pretax profit earned from selling its product or service.

Income is used to fund day-to-day expenditures. Investments, pensions, and Social Security are primary sources of income for retirees.

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