What exactly is passive income?

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What is passive income?

Passive income is a kind of income that flows in even when you are not ‘working’. At normal jobs your time is exchanged for money. With passive income you invest time into something, and you will get paid back after that. What’s so great about passive income is that after you put the time in it, you don’t have to put any time in it after. And you will just get paid every time you sell something, get a commission or get a click on an ad, which could happen while you are sleeping!

 

Passive income is a way of life.

 

This is because when you earn a passive income, your life drastically changes. You will get more time to do all the things you want. Also, you can plan your time the way you want to.

Imagine what your life would look like if you would earn, let’s say 20.000 dollar per month with only doing 8 hours of work per week! Most passive incomes are made through the internet, so these 8 hours of work per week can be done on the beach of a luxury resort in The Bahamas.

How I would imagine it has all to do with the lack of obligations. I would see myself waking up in a beautiful appartment on top of a high building in New York. I would have a nice breakfast with a view of the city that never sleeps. After breakfast I would decide what I would do that day. Maybe take the brand spanking new Lamborghini for a little ride. Or no wait, let’s go fly to a foreign city! I would just go to the airport and book the first flight to a great city, let’s say I go to Venice today. That evening I would probably be eating at a great restaurant with an extraordinary view of the Rialto bridge(beautiful bridge, you should visit Venice someday, maybe when you make a steady passive income!!).

 

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The difference between active and passive income

There are two types of income in this world, active and passive income. Active income is earned when you are working, so you will get paid for the time you spend working. With passive income you will create value once and you will get paid even when you are not working. The only thing with passive income is that you will not get paid when you are creating this value.

An example for active income is a normal 9 to 5 job. You will exactly get paid for the time you are working. So these 8 hours you spend at your work are converted into money. An example for passive income is mostly a business. Let’s say you are into Kindle Publishing, you will create an ebook once but you will not get paid directly for these hours. But you will get paid over and over again when you’re not working on it.

 

Passive income is a time investment.

 

You first need to invest time in creating the value, but after you’ve done this you will get paid over and over again. Like with the ebook you put on Amazon, you will get paid when you just published the book, but even after a year you can still generate sales!

Here is a small infographic that will sum up the differences among active and passive income:

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(Click on the picture for full size!)

 

Do you want to start making this passive income?

Now that you know all about passive income, maybe you are super motivated(just like me!) to earn this passive income. You can start by choosing what kind of passive income you want to get into. This article can help you.

Also you could select a training program or tool to get started. Most of the time you will make passive income much faster because you don’t have to figure everything out yourself. Click here to go to the product review page.

clenrock
clenrock
Hi I'm Clenrock. My goal is to learn everything about making money online and creating this 'passive income'. It's awesome to get home after a day and to check if you have made some money online while you didn't do anything for it that day! I hope that I can inspire you to start making money online and to create a passive income for yourself. Also I will do my best to help you with the best articles!

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