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In this brief YouTube monologue, Mel Abraham explains that there are three distinct categories of income. Type 1 (earned income) is the traditional paycheck earned by working and stops when you stop working. Type 2 (asset income) comes from owning assets that generate rent or other regular payments. Type 3 (portfolio income) is generated by money working for you—investments that produce returns while you sleep. Abraham argues that most people spend their lives only in Type 1, and introduces the concept of a “Money Machine” as a framework for moving from earned income to asset and portfolio income.
