Income

Income, payment, whether money (pecuniary, cash, or monetary income) or as goods and services (real income), received in return for goods and services. For most people cash income takes the form of a wage or salary, usually expressed as so much per week or month. Cash income is also derived from stock dividends and from rent paid for the use of property. Many people in developing countries depend largely on noncash incomes. Even in industrialized countries some people get at least a part of their income in the form of goods rather than cash, for example, farmers who use some of their own produce. Income is distinguished from assets. For example, say that a person spends $8,000 in the course of a year but earns only $6,000, drawing the remaining $2,000 from savings. That person's income is only $6,000. The remaining $2,000 has been spent by consuming assets. Equally, if a person borrows money or receives a gift of cash, such sums are not rated as part of income, since they do not stem from productive work or investment. People regularly spend more than their income, borrowing cash and buying on credit. Businesses, too, regularly look to borrowed funds to pay for their expansion. This presupposes that borrowed money can be repaid from future income.