I have a few questions before we proceed with what is passive income. If your answer is yes to all the questions then you should read the complete article carefully till the end.
Do you want to earn passive income?
Would you wish to use your time and money as per your wish?
Do you desire an income that continues to grow even when you are actively working or not?
You want to live a boss free life?
If yes to all, then let us carry on…
Before we start, let us understand, what is passive income?
There are two types of income:
1. Active income
2. Passive income
Active income is an income which needs your active participation in a work for you to achieve or accumulate the income.
For example, we go to office and work and we get active income, the day we leave the office that income stops.
Some people get confused with active income being for people who do jobs. But even majority of business people have is with an active income.
Like for people who runs a stores, workshops, industries, etc.
They have to actively work to incubate that income.
What is Passive Income?
Passive income is quite the opposite of Active income, wherein, your active participation is not required.
In today’s world, there are tons and tons of ways to earn money in an authentic way.
But unfortunately our brains are trained in schools just to work hard to earn, which is active income.
This doesn’t mean that passive income does not need hard work.
Passive income source can be as a Royalty or from an investment of real estate, mutual fund or Network Marketing business, etc.
(DO READ CAREFULLY TILL THE END AS THIS CLARITY WILL CHANGE YOUR PERCEPTION ABOUT MONEY AND INCOME.)
For a lot of common man like me, the only knowledge of income that has been taught is about Active income.
We realize the need or potential of Passive income only when we get in a particular unfortunate situation.
Here is a story…
‘Ramanujam has been working with a logistic firm for more than 25 years and his entire life was running on that one income. Without realizing, the time flew like wind and the retirement day came. That’s when he analysed about the things he did in his life. He was broken to realize that all his life he lived salary to salary every month. Never could save anything for the things he wanted to do. He just pushed his desires every month by month with the killer thought”I can do this later”. Now since his retirement, he has got this time but the energy is completely drained to do the stuffs he wanted to do then.’
You might feel pity for Ramanujam. But this is going to be the same with many of us.
We have many Ramanujam’s around.
There is another story of the 2008 recession, where many people lost their jobs. Many committed suicide because of financial troubles.
These were the people who were having a good life once upon a time. Suddenly things took a U-turn. The only mistake they did was, they were dependent on one income.
Believe it or not, it is dreadfully dangerous to be dependent on one income to survive with a family.
You are walking on a path towards dead end, which can end anytime.
That is where passive income comes for support. You need to have a secondary income source for that matter.
To know more about passive income you can watch : Passive income: The cartoon movie.
Don’t miss to Read: Work from Home.
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Anup Chandran is the founder and creator of Easy Go Guide. To know more please visit the About Us page.