FORMING A PERSON’S LIFETIME ECONOMIC STRATEGY BASED ON A COMBINATION OF INCOME SOURCES
Abstract
Virtually every person - regardless of their level of education, type of activity, social role, or other circumstances - functions as an economic agent who earns and spends money in various ways. In doing so, people often rely on multiple income sources and earning methods, yet they do not always fully understand their fundamental differences or structural characteristics. Such a sporadic or intuitive choice of income sources and earning strategies rarely leads to optimal results. Over the course of a lifetime, the cumulative effect of these suboptimal decisions can significantly influence an individual’s economic trajectory, diverting it from a potentially optimal path. In this context, there is a need to systematize the ways of generating income, taking into account their key economic characteristics and assessing their potential impact on a person’s lifetime economic trajectory. Building on a heuristic approach to the strategic choice of economic activity, which includes three core criteria determining the long-term attractiveness and potential of income-generating methods - Increasing Returns to Scale, Scalability, and Access to Resources - a high-level typology of earning methods is proposed. It includes four main categories: Time-for-money exchange – trading one’s working time for a salary or other fixed compensation; Value provision – offering services or performing tasks that create value for clients; Investing – using available resources to generate future income through financial, material, or intellectual assets; Business – organizing systematic economic activity aimed at meeting customer needs and generating profit. This conceptual model makes it possible to distinguish the key characteristics of different earning methods and to cascade high-level earning categories into specific income sources. Such a framework provides the foundation for a systematic approach to shaping an individual’s lifelong economic strategy.
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