Passive Income is the money that keeps adding to your account even when you are not working. It is defined as a regular income that is added to your balance with very little effort required to generate and maintain it; it is closely related to the concept of “unearned income.
That doesn’t mean you get something for nothing, it means that you have provided goods or services in the past that continue to produce income today. What is it like to have multiple sources of income added to your account each month, each week, each day, or even every hour? It is definitely not daydreaming.
The key to earning passive income lies in finding a reliable source of investment. This investment could be as small as $500 and as big as $1 million, but it has to be something substantial enough to provide you with a steady stream of passive income.
An investment is considered profitable if it generates more than enough earnings to offset its costs. Money earned from selling your investment is known as portfolio income. You can call passive income if your investment keeps bringing money into your pocket like Dividend stock market investments.
This definition can be applied to all types of investments, whether tangible, tangible, or intangible.
There are many ways to make passive income depending on what you are interested in and not interested in doing yourself. For example, you could own an online store that you can completely outsource to someone else.
The Types of Income
- Active Income: Income generated from trading your time for money. Example: Salary, Wages, commissions, Bones, Consultation or Services
- Portfolio Income: Income generated from selling away an investment a higher price than you paid for it. Example: Capital Gain, Collectibles, Shares, Currency exchange, Stocks
- Passive Income: Income generated from your assets without you working for it actively.
Why you should focus on Passive Income
Passive income is the amount of money one earns without expending time or energy, but it is also considered as the money that comes from one’s investments. Following are good reasons to focus on making passive income:
- Passive Income, if done correctly, can give you $1000++ of additional income.
- You can run your business on autopilot; you can outsource your work to others and get the bigger share out of the business.
- Risks are minimal.
- It is cost-effective; you do not need to invest hundreds of dollars.
- You can continue your 9-5 job, business, or whatever it is that you are currently doing. The beauty of being an online entrepreneur is that once you are on track, you can put your entire business on autopilot; just keep checking your bank account!
- Apart from outsourcing work to a Virtual Assistant and a team of professionals, you can track the progress of your business with the help of sophisticated software and applications; there is no need to manage files and bundles of paper, everything is pre-arranged and automated.
The entire process of Passive Income is, however just a bit tricky in the beginning, but the good news is that anyone with good dedication, the right guidance, and diligent hard work can establish at least $500+ consistent income in your bank account, every month.
We hope that you enjoyed this article about why you should focus on passive income. Some people love the thrill of chasing their next big acquisition, but that doesn’t mean that those who choose to focus on passive income are any less ambitious. In fact, many feel that they are more prepared to take on the challenges that the world has to offer. The trick is to find a good balance between focusing on passive income and actively working to acquire more assets. If you would like to learn more about passive income and how to make money online in general then join my newsletter.