The traditional school system only teaches people and conditions people to have a linear income. If you don't figure out other ways to earn income you will retire at the same time every other average person retires.
The three kinds of income are:
EARNED INCOME. Earned income is your pay check that the company you work for issues on your name every week or biweekly or every month; This is otherwise called ACTIVE or LINEAR income. There is no room for substantial growth in income. Sure you will get small raises but it doesn't increase your income that much. Even if you are making 150k a year from your linear income, you will have to be at work doing something in order to make that money. In order to retire early and be financially free you will need at least have two kinds of these incomes. Linear income in my opinion is the starting point to becoming financially free, but you will need to be disciplined in order to leverage off the income coming in. For example you will need to leverage your linear income to fund a book, or your investment account.
PORTFOLIO INCOME. If you have money invested in paper assets (stock, bonds or mutual funds), you have portfolio income. Portfolio income works on the same principle as passive income. We may call it Asset/ Investment Income.
PASSIVE INCOME. Passive income is earned even when you're not physically doing any work. Passive income can come from a business that you set up but someone else runs on a day-to-day basis. This is called also RESIDUAL. With passive income you will get paid from some kind of investment with out having to be actively involved. For example if you put in time to create a book then it gets to the market. The only time you had to work was when you were writing. Or another example would be investing in dividend stock where you put in money and each quarter you will get a check for holding your money in that company.
