What is the different between passive income & real income?

Last Update: September 19, 2018

This is a comment I am throwing open to everybody, Passive Income and Real Income, because I'm very much concerned about that word and I see people using it, passive income rather than using real income.

In WA I had read people blog how they had resign from their prospective job and become fully Wealthy Affiliate Marketers.

I want to know the different between Passive Income and Real Income

The word Passive: tending not to participate actively, and usually letting others make decisions.

The word Real: existing as fact, rather than as a product of dreams or the imagination

The word Income: Inflow - an act of coming in or flowing in.

Albeit, I want to know the connotation of this words with income.


Please comment on this.

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ElaineSmith1 Premium
Hey Omosomi,
Passive income is automatic income you earn over again and again.
Active income is something your earning currently.
Both are examples of real income.
I hope this helps. It short and sweet.

Tried and True

lesabre Premium
Wow, Glen has said all that can be said.
newmarketpro Premium
I would agree with Glen on Passive Income.

The closest example I can come up with is the commission you'll get with WA Referral Program. You only need to promote it once to a person, if he/she signs up, you'll get paid month after month continuously as long as he keep subscribe to WA. That's passive income.

DerekMarshal Premium
The term passive income does not really apply to affiliate marketing or blogging as you need to do the work initially.Semi-passive, yes.

I have two sources of income one is completely passive - requires no work at all. Not a single second!

The other is what I get from blogging and affiliate marketing and requires some work to obtain it.
Glen B Premium
The phrase passive income was originally defined by the IRS here is the definition from the Investment & Finance Dictionary.

"Income from activities, in which an investor is not actively involved. It is a distinction, established by the Internal Revenue Service that governs how the income is taxed. Real estate investments used to be considered passive, but now if the taxpayer spends half his or her time involved in real estate property or services, then income from the real estate is not considered passive. In 1993, the IRS rules were changed to require that losses and credits from passive activities are deductible only from passive income."

In the world of affiliate marketing when we talk about passive income we are talking about income that you do the work once and then it comes in passively or without much further work.

So in the financial world if you were to purchase a rental property you would do the work once then get paid month after month and that was considered passive income.

In our case we build our sites and the traffic begins to flow and we get paid month after month so this is also passive income.

Real Income and Passive income are the same it's just passive income has the connotation that you get paid over and over for work performed once.

Hope this helps,
- Glen B