Passive Income Ideas

What is the passive income?

Passive income, also known as residual income, is money you earn while you’re not actively working.

Instead of trading your time for money — as most people do at their 9 to 5 jobs — passive income is all about having money trickle in even while you’re not there.

In other words, passive income is where you get paid over and over again for work that you did once.

By choosing the right type of passive income, you can invest your time the way that you want to. It is a way of buying back more time.

There are so many opportunities out there to make passive income that is bound to fit your passion, experience, or skill-set.

Passive Income Vs Active Income

The most basic of money management principles is to make sure that you have more money coming in than you have going out.

This is vital if you want to find financial success. Of course, this means that you need to have some sort of income.

Understanding where your money comes from is important, and you should know the difference between active income and passive income. More. 10 Passive income Ideas

Active Income

Most of us are familiar with active income. This is income that comes from our active efforts to earn money. For many of us, this includes working at some sort of a traditional job.

Active income can also come from the efforts you put forth to make money with a side business, or by doing odd jobs.

The main reason active income is called “active” is due to the fact that you have to do something. Often, that something requires a significant expenditure of time or effort.

Even if you make money by sitting in an office all day, you may find that you are still engaged in active-income, since you have to go through the process of getting to work, and then you have duties to perform.

Pros (assuming you're employed)

Stable as you get constant streams of cash flow on a monthly basis.

Easy to apply for a mortgage as you have salary proof. Have medical coverage for your family.

Other subsidies (e.g. children’s education fee) that your companies provide

Reputation if you work in famous companies

Cons

No autonomy as you have to do what you’re told, always follow your boss’s instruction even though it doesn’t make any sense or sounds stupid.

No time as you have to spend a lot of time working.

Sacrifice your health because of the long working hour or stress.

Even if it isn’t physically strenuous, it might be mentally challenging. Even a tedious job that is not challenging in any way can actually be considered “active” since it is quite draining to go through the day in such a setting.

Passive Income

On the other hand, passive income is earned when you put your money to work for you. Many also consider passive income to be income from activities that you do for a short time (the set up) but that requires very little else to maintain the income flow.

For example, you might spend some time putting together a website with affiliate advertising.

It requires some upfront time and effort, but after a while, there is no need for you to put in a great deal of time. The money flows in with very little continued effort and oversight on your part.

Passive income can also come from investments. Dividend stocks and bonds are popular income investments. You put your money in (or set up an automatic withdrawal), and you earn money from dividends or from interest.

There isn’t a whole lot you have to do beyond checking every so often to determine whether your income investments are performing as you like. The money comes in, but you aren’t doing much.

Pros

Have full autonomy to do whatever you like or make your dream come true.

Have a time that you can enjoy the precious moment with your family

Can get back control of your health as you don’t need to work for a long period of time (of course, you have to have discipline with diet and exercise)

Cons

Income may not be steady enough at first (especially if most of your passive income come from investment or business) but this can easily be overcome over time and effort.

Transitioning into a position where passive income provides more of your earnings is a worthy goal since it will leave you time to do the things that you want to do. Track your income, as you track your spending, and learn what you can do to improve your cash flow.

the importance of passive income

1. Freedom of time

All things considered, time is our greatest asset. In fact, time is far more valuable than money.

While money can be spent and earned, time can only be used up just once. After that time has passed, it’s gone forever. You can never physically relive that moment again.

This is why passive income is so important — because it gives you the freedom of time.

When you’re less shackled by the necessity to earn just to meet your monthly financial obligations, you have the freedom of time.

This doesn’t mean you have total freedom from all of life’s obligations; it simply means that you have the flexibility that comes along with not having to struggle to make ends meet at the end of the month.

As long as you can ensure that your passive income outpaces your monthly expenses, you’re free to spend your time as you choose. With each new passive income stream, your revenue eventually far surpasses your expenses and you ultimately attain true financial freedom.

When you have freedom of time because you’re not engaged in active-income work, you’re free to do as you please.

You can choose to travel the world and become a digital nomad. You can choose to settle down and start a family. You can engage in work related to creating additional passive-income streams of

revenue.

The choice is yours. You have the freedom to choose because you have the freedom of time. That’s the power of passive income.

2. Freedom to earn, anywhere

When you have passive income, you can pick up and hit the open road. You can head to a city like Chiang Mai, Bangkok, Berlin, or just about any other place on the planet, live and work.

You can exist for peanuts on the dollar compared to most other major metropolises around the planet. But you don’t need to stay. You can continue to wander after just a few months.

And why not when you have the financial ability to do so?

Still, it’s easy to not put passive income as a priority when you’re so actively concerned about the day-to-day. Rising above that is difficult. But you just need to set a goal, focus, and move towards that goal with persistent action on a daily basis.

There is light at the end of the tunnel. It will take you time, but you’ll eventually get there. It all just depends on how badly you want it and how important it is to you at the end of the day.

3. Peace of mind

There’s nothing worse than having the pressure that comes along with an inability to pay your bills. It causes anxiety, fear, and overall hopeless desperation for the future.

The what-if scenarios begin to encircle your mind, like a hawk flying above its prey prior to swooping in for the kill. It does a number on you mentally, physically, and spiritually.

It emotionally beats you up and destroys your hopes and aspirations.

Anytime we live in dire fear of the future, it’s hard to be present. It’s hard to enjoy what we have in the here-and-now because we’re so tied up with those doomsday scenarios.

We’re so worried about an impending fiscal collapse that it’s hard to extricate ourselves from the shackles of that train of thought. It consumes and becomes you. It’s hard to get away from that when it’s all you can think about.

Passive income helps to alleviate all of these worries. It helps to put fears to bed because you aren’t worried about losing your job or being the byproduct of corporate downsizing.

When you don’t have to worry so much about impending financial doom, not only do you feel better mentally and emotionally, but it translates into physical vitality.

You have more energy and are more motivated to get out there and achieve more because passive income also helps to build that all-important financial momentum in life.

4. You can pursue the things you love

We all have things that we’re passionate about doing in life. But we always seem to put them off for later.

Whether it’s art or music or travel, we can indulge our fantasies when passive income frees us from debt that tethers us to the never-ending cycle of payments and interest.

It allows you to exit that proverbial rat race by elevating you above all the things that worry so-called “normal folks.”

It also frees you to produce an active income by following your heart. When your passive income outpaces your debts, why not get involved with a project that you care deeply about?

Maybe you want to help out at a homeless shelter downtown that can’t pay you.

Maybe you want to teach your neighbor’s son piano lessons and they can’t pay you much. Whatever it is, you can do it because you’re not worried about the paycheck.

It doesn’t matter what you’re passionate about, you can do it. If you want to take a language class for a few weeks and study full time, you can.

When you want to go camping with your kids for a full week, you can. You don’t need to worry about calling in sick or taking time off from work. You’re your own boss.

It’s the dream of those out there that wake up every single day dreading another moment of work that totally and utterly bores them.