Before starting any work on the Internet, especially making money online, I want to clarify a definition called “Passive Income” for everyone to better understand.
There are many people who misunderstand this concept, so in this article, I need you to understand more about Passive Income.
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What Is Passive Income?
Passive income is the income you will earn even if you are not working on a daily basis. You spend less time than usual.
In contrast to passive is active. Active income is stopped when you stop working. For example, You go to work and get paid, if not, you do not have the salary. Except for sick leave, your employer will not continue to pay you unless you continue to work for them.
With passive income, you continue to receive money, still have to receive money, whether you work or not. You can do the things you like, things that before you cannot do. Once passive income is activated, basically you can stop doing the current job.
Passive Income Does Not Mean Fixed Income
Some forms of passive income can last a month or a few years. There are also forms can continue for many decades or even centuries through generations.
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Passive Income Does Not Mean Completely Secure Income
Some forms of income are safe for some, but always contain risks for others. Anything on this life has probability.
That is the reason that so many wise people have created a lot of passive income streams, which can reduce the risk of losing one at the same time.
Passive Income Does Not Mean 100% Passive
There is no anything called “do nothing but still have money”. At least you have to do things like maintenance to keep the system running smoothly. Like the machine, it runs much, it needs oil, gasoline, etc.
Passive, not automated. Money automaticly flow into the bank account, you still have to withdraw the bank, then make income report to pay taxes…
There Are Some Sources Of Income Called “Very Passive”
Example: You write a book, you sell the rights to the publishing company. The bookstore continues to sell books and readers continue to buy it. Even if you turn off your site for some reason, your book is still sold in bookstores and online stores. All you have to do is get royalties. You do not need to process orders, interact or take care of customers. It is VERY PASSIVE.
Some Other Income Is Called “Semi-Passive”
For example, you own a house and rent it, you still earn passive income by receiving rent payments from your tenant. But you still need to invest some time, effort and money to maintain your property, to look for new tenants when the house or its rooms empty, and handle the mortgage, insurance payments and land taxes.
Passive Income Does Not Mean Passive To Everyone
Some people have to do regular work to get passive income (eg write articles for the website every day). Some people leverage technology to do multiple things at once. Some passive income from the income of other people activities.