Grade 5 Lesson 2: #Unearned #Money
Unearned income is income not acquired through working, doing a job and doing your own business. It differs from earned income, which is income gained from employment, work, or through business activities.
There are several types of unearned income. Interest and dividend income are the most common types of unearned income
Interest income includes interest earned on checking and savings deposit accounts, loans, Fixed Deposits and certificates of deposit (CDs)
Dividends are income from investments. Investments in stocks or mutual funds can typically yield dividends payable to shareholders on a regular basis. Dividends may be paid to the investment account monthly, quarterly, annually, or semi-annually.
Other sources of unearned income include:
• Retirement accounts—for example, 401(k)s, pensions, and annuities
• Inheritances
• Alimony
• Gifts
• Lottery winnings
• Social Security benefits
• Welfare benefits
• Unemployment compensation
• Property income
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