Everything You Need To Know About Passive Income
We’ve spoken about passive income before on this blog, and it was mainly revolving around the different ideas and ways in which you can earn it. However, do you know what passive income is and why it’s so important? In this piece, we’ll go through some of the main definitions of passive income, along with why you should really try your best to earn as much from it as you can!
What is passive income?
Active income refers to all the money you make by actively going out and doing things. From a freelance writer’s perspective, this means writing your articles or blogs and getting paid to do so. In a more traditional sense, it could mean going to work in an office from 9-5. In either case, you are actively putting work in and getting money for it.
Contrastingly, passive income refers to earnings that come without you needing to do anything. Well, that’s not technically accurate; you typically need to do one or two things to set something in motion, then you can relax and watch the money come through. Examples of this include investing in things like stocks & shares, forex, cryptocurrency staking, etc. When you invest money, you initially do something - investing the cash - then sit back and let the market dictate what happens next. The same can be said for things like affiliate marketing; you get your affiliate link, and you barely have to do anything to generate money when people click it and make purchases.
So, taking all of this into account, passive income is where you do very little and generate a source of income. For some people, this is their primary source of income - for others, it’s something you earn on the side along with your active income.
Why should everyone try to earn passive income?
Well, for starters, it’s an easy way of making money. There’s little effort involved with a lot to gain. If you set up your multiple ways of making money, you can relax and see the cash come in through lots of different sources without going through the stress of working hard to generate it. Plus, you can use lots of different tactics in one go to generate passive income from as many sources as you like. By contrast, with an active income, you typically only have one job to make money from. You could work multiple jobs, but you have to deal with the mental and physical stress of them.
It is simply an easy way for you to grow your wealth in your spare time. It’s also a genius way of ensuring that your savings get put to good use - particularly if you go down the investment route. Realistically, the ideal life for everyone is to sit back and earn passive income without needing to do anything at all. Can you imagine that? A life where you are free to use your time however you want yet still make money!
To summarize, passive income is very desirable as it helps you make more money with very little effort. If you have a full-time job, you should seek ways of earning passive income on the side. Alternatively, you can try to open up numerous passive income streams to earn enough money to live life without needing a full-time job.
