Active Income and Passive Income

1) What is Passive Income?

Passive income is money received on a regular basis, with little effort required to maintain it.

Some examples of passive income are:

Repeated regular income, earned by a sales person, generated from the payment of a product or service that must be renewed on a regular basis, in order to continue receiving its benefits - also called residual income.

Rental from property;

Royalties from publishing a book or from licensing a patent or other form of intellectual property;

Earnings from internet advertisement on your websites;

Earnings from a business that does not require direct involvement from the owner or merchant;

Dividend and interest income from owning securities, such as stocks and bonds, are usually referred to as portfolio income, which can be considered a form of passive income;

Pensions.

2) What Does Active Income Mean?

Active Income will require significant effort and time to acquire with services performed.

This includes wages, tips, salaries, commissions and income from businesses in which there is material participation.


3) Why do we need to grow Passive Income?

Most people will one day get burnt out in the RAT RACE to acquire Active Income, and sooner the ability to acquire more Active Income will be significantly reduced or just end.

Look at your options, and diligently work on your possible sources of Passive Income and keep to increase it, and that will certainly help you to reduce your dependancy on Active Income, the sooner the better.