People earn money by providing value. Every job exists because a person or a business needs a product made, a service performed, or a problem solved.

People earn money by producing goods or services, such as:

Earnings reflect the usefulness of the work to the person or company paying for it.

There are two main sources of income:

1. Labor income — money earned by working
(wages, salaries, commissions, tips, bonuses)

2. Capital income — money earned from owning something valuable
(investments, rental property, business ownership, interest, dividends)

How much people earn is influenced by several economic factors:

Skills and education: specialized or technical skills often raise earnings
Experience: improved ability and reliability increase opportunities
Effort and reliability: communication, consistency, and problem-solving matter
Industry and job type: some fields pay more due to demand or expertise
Location: wages vary by region and cost of living
Supply and demand for workers: scarce skills earn more
Responsibility and performance: greater impact or measurable results can increase pay

Understanding these factors helps students see how careers grow and how earning potential develops over time.

3. How People Earn Money