There are three basic types of taxable income in the United States: earned, portfolio, and passive. Earned income is derived from labor and is taxed highest of all incomes. Portfolio income is general income from capital gains earned by buying an asset low and selling it high. It is the second-highest taxed income. Passive income is generally income from cash flow and is the lowest taxed of the three incomes.
— Robert Kiyosaki; Rich Dad's Conspiracy of The Rich
