Ways to Generate Unearned Income

In the hunter-gatherer society, people did anything to survive. The barter system came later for the exchange of products with the specialization of labor, which is essentially nothing but the division of labor. Money as a medium of exchange has gradually eliminated the barter system in the evolution of human society. Division of labor basically works in manufacturing sectors where outputs are the sum total of labor performed by different divisions.

In addition to divisions, sectoral demarcation such as agriculture, industry, service in big heads is as good as the division of labor. People working in agriculture depend on other sectors to meet their needs, and vice versa.

The money society cannot allow people to live independently. It may be possible – the way of living an independent life is officially called the informal economy. Their contribution is not distributed to others, so outputs are not recorded.

There are two types of people living in the company – employers and employees. In many cases, employers become employees. Farmers can be employed as wage earners after industries acquire land.

The division system that prevails in the economy requires skills for sectoral work. Formal education is a skill placed above all else. It works as an equalizer and its absence leads to increased unevenness.

The silver society is a system in which survival comes down to the strongest. Misfits in the event of dismissal will not survive. Why they won’t survive is a question. The simple answer is that without money a person cannot produce all that is necessary to survive in the money society.

Money functions as a medium of exchange, among other things. The combination of all sectoral contributions makes everyday life easier. We cannot work for all sectors. So, work! job! job! is a common term in society. Job will not pay in kind but in money which is a “one-purpose army”, making its owner a jack-of-all-trades. Thus, nothing but money in the proper sense of the word advances society.

Remember hunter-gatherer society, production through physical labor is not plentiful. Additional production comes from borrowing or stealing. Money as a product of labor can also be borrowed to meet additional needs, it can also be amassed through illegal activities such as theft, ransom, etc.

The monetary system allows people to capitalize future income at the present time. The beneficiaries of such capitalization can improve their standard of living without excessive work. This is possible through borrowing from the banking system. This facility does not go to all equally. Few who enjoy these benefits are upgraded to higher stages, creating wider inequality gaps in society.

Non-labour income is called labor income. But income without work is unearned income – the other side of the coin. Business super profit can also be called unearned income. Unearned income can be either illegitimate income or normal income. Investment in financial assets generates income. It is easy to calculate 7 + 7 + 7, but exponential items like 7 x 7 x 7 are not easy. The passage of time in the investment program leads to exponential growth in investments. This is a passive income, a self-generating way. Investing funds from unearned income into money-generating instruments results in exponential growth in passive income. This is possible for people under the lucky categories because of the system in which the silver society operates.

There are basically two ways to generate unearned income. One is legit – future income goes to some lucky people who now benefit from income that should be earned in the future. These groups have wealth to live sustainably with current income streams. The (abundant!) output they generate is a matter of question. In fact, their outputs are as good as others can generate.

The illegitimate way of capturing money is another method of accumulating unearned income – bank money without reimbursement, bribe, illegal commissions and many others.

There is another category of people – between these two. They have abilities, but no opportunities open to them – inequalities of opportunity. But they cannot create outputs for their livelihoods in a society dominated by money – they have to work for others to have money.

The current monetary system facilitates development in all respects. Which comes first – production or money – is a question. In reality, money comes first to support outputs. Accumulation of future income in money helps to improve the standards required to lead a modest life. This money creates a demand for products. In monetary theory there is some debate that savings support production, but in practice its role is invisible. Money from nothing can do everything – modern monetary theory concept. He also says that the government will not be in default provided that it uses the money created to meet its domestic needs. The use of foreign currencies as loans can lead to defaults in case of insufficient income from external sources such as export earnings, service income, factor income, etc.

There are many underlying reasons, given by different schools of thought, such as natural resources, technological advances and many more in development theory. But the money used in society as manufactured products and services is not credited with the status of the main underlying reason for the current development.

The word “poverty” is frequently quoted with diversified paths such as absolute poverty, extreme poverty, etc. Laziness is named as the main cause of poverty. On the other hand, it is also true that working hard does not equal being rich. It is said that luck works behind wealth whether true or false. Whatever the theory, the economy is capable of supporting people in need. But the economy requires money in exchange. It is possible to earn money by producing outputs or by providing services to producers of outputs.

The number of producers and service providers to produce is approximately 1:99 as a mathematical ratio. It’s not so easy to be a producer, without having unearned money. It takes several generations to be real producers thanks to small savings on the money earned.

The lack of cash income drives many people into the poverty bracket despite their ability to work hard. This earned income allows them to maintain their livelihood. They do not manage to have the durable goods necessary for daily life.

Capital income is a key determinant of the degree of inequality. Economists measure it using a mathematical meter called the Gini coefficient, on a scale of 0 to 1, the lower the better. But the fundamental missing link of poverty, in addition to the lack of different opportunities, is unearned money.

Without monetary income, a person with high abilities cannot sustain life as said earlier. Today’s society is beset with money that can do whatever it takes. Current monetary income is used for current needs, leaving a small pie as savings. The standard of living depends on durable goods and wealth, examples of which are white goods and dwelling houses. Insignificant pie because savings are not able at the beginning of life to support all these durable goods. Only unearned money can bear. Certain elements are considered in a society as fundamental rights which are food, clothing, housing, education, health, etc. But people living in the monetary society need unearned money. This right must be considered fundamental.

Whether the unearned money will cause the price level to rise is a question. This is certainly true in theory. But in practice, unearned money supports economic activities with a myriad of effects, including favorable cross-border transactions. The challenges, however, lie in the method of distributing the unearned money to the beneficiaries. Various public and private sectors distribute unearned money to employees in the form of loans, capitalizing future earnings. But these sectors are very few. People with business ideas try to get unearned money from the financial system, including venture capital, but they rarely support to the extent required. Angel finance as unearned money is rare in practice in the money society.

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