They say that the average millionaire has seven different streams of income. Note: That doesn’t mean they have seven jobs. Most millionaires have figured out the passive income game.
Even though earning passive income in addition to your day job won’t solve all of your life’s problems, it’s a good place to start. Especially if you’re serious about building wealth.
What is Passive Income?
At its most basic definition, passive income, also known as residual income, is money you earn while you’re not working. You could be sleeping, on the beach drinking margaritas, or just relaxing. Yet, money keeps getting added to your account.
Traditional passive income ideas include investing in stocks, bonds, real estate, and even royalty generation. These all involve making some sort of investment or cash outlay in order to generate a return.
What’s the difference between passive and active income?
Active income, on the other hand, involves earning money in exchange for a service (meaning you are trading your time with money). It could be a salary, an hourly wage, commissions, or tips. It’s essentially a trade of your time for a fixed dollar amount. Most people choose to live this way, and there’s nothing inherently wrong with that, as long as you understand that there will be a limit to how much money you can realistically earn. More money you need, more time you have to put in. The problem is you cannot work all day every day and you have only 24hrs a day.
We are not saying to quit your job (at least not yet), but if you’re looking for creative ways to start generating wealth, follow this channel (to be continued ONE in each blog post).
