Many people earn their income through non-passive ways such as the typical 9-5 job. These are called by entrepreneurs as wage slaves. Entrepreneurs and many wealthy individuals earn money through passive ways such as rent, stocks, or online courses. This article will explain to you the difference between the two income models and why those who are striving for financial independence should start earning passive income.
Passive income is income that is obtained in which the investor does not take in active participation. Examples of passive income are; interest from deposit/pension, dividends and capital gains, rent, and royalties. Non-passive income means any income that consists of any type of active income such as wages, investment income or business income. Non-passive income is also classified as any income that is not passive income.
Many wealthy individuals earn income through multiple sources. For example, many millionaires own stock or property in which they receive rent. The benefit of having more than one income stream is that if one income stream fails, then there is another to fall back on. Also, many wealthy individuals earn money through passive income. This means they constantly earn money, even whilst they sleep. This gives them time to do more things and earn more money. It gives them more freedom.
If an individual relies on solely their salary for income, then they are extremely limited and constrained. They have to survive on just that income and are a slave to their boss. If they lose their job, then they have to look for another job and during that period are under a great deal of stress and have lost income. Some might not even be able to pay their rent or mortgage. Also, earning a high salary takes time and takes a lot of effort.
In the internet age, it is now even easier than ever to earn a passive income. Due to the internet, there are endless possibilities of making money. Many people have made money from selling products on eBay and Amazon. Also, YouTube has made many ordinary individuals into stars and made them lots of money. For example, someone that works in a clothing store can set up an eBay account and start selling clothes. They have access to the clothes and know what to price the products. If someone is artistic or creative they can start their own YouTube channel and vlog about their life. There are many successful YouTubers. Many successful YouTubers earn money through ads and affiliate marketing. This means they can earn money on videos that are over a year old or even longer.
Passive income is a great way for someone to achieve financial independence. It helps a person sleep at night, especially since they can be earning money whilst they sleep. Due to the internet, people should take advantage of the opportunity to earn money continuously.