The Three Sources of Income

Professor Antal Fekete sets out the Principle of Triple-Entry Revenue Accounting. His principle asserts that "the capitalist who buys and successfully manages his own capital goods will carry three accounts in order to distribute the revenue (after depreciation) of his enterprise, namely, in order of seniority moving from the senior to the junior: the interest account; the managerial compensation account; the entrepreneurial profit account. Whereas insufficient revenues affect the junior before affecting the senior account, all surpluses accrue to the junior (profit) account. Triple-entry revenue accounting is made necessary by the need to keep the enterprise economically healthy and to ensure that it is capable of self-correction and selfimprovement. It reveals that profits cannot be understood in isolation: they have to be considered together with losses. Moreover, both accrue to the entrepreneur, without directly affecting the manager or the capitalist."

Productive Skills & Expertise

Those people with productive skills and expertise will be in demand to help meet the higher order needs of others. Where the person is employed by a company they are paid from the revenues of that company. As such, the manager / wage earner should choose their employer with utmost care. A key consideration should be the marketability  - over time, space, to whom and quantity - of the product produced or service provided. The physical and mental demands for the occupation should be considered, including the ability to continue work at later ages.

Entrepreneurial Income

Entrepreneurial income rates to profits and losses arising from the employment of capital goods and management to produce products or deliver services to meet the higher order needs of others when people come together to work as a company.

Equity, the ownership of entrepreneurial income, is often transferred through exchange. Dividend payments are the form of entrepreneurial income.

Discount & Interest

Inventories of high-demand, fast moving goods can be funded through (real) bills of exchange. These bills should provide a key source of funding for businesses, including that for the payment of wages. The transfer of bills of exchange though the clearing house can earn the holder the discount rate.

Capital goods may be purchased through the issue of mortgages, or bonds with sinking funds. The owner of the mortgage or bond receives interest payments with the return of capital amortised over time.