What Is Passive Income About?

13.7K followers

7 years ago

Most of us are probably aware of terms such as residual income and passive income, but what is passive income about and can it be earned through online sources as well as offline sources?

Are Passive Income and Residual Income the Same?

They are very similar. Generally, the absolute true definition of a passive income stream is one that required no real work to establish, whereas while a lot of residual income is "passive", there had to be work done in the beginning to create the product that produces residual income. A good example is receiving royalties for writing a book. You write the book once and keep getting paid over and over as the book sells. And a simple example of passive income in its purest form is bank interest on a savings account.

The Advantages of Passive Income

I generally like to include residual income as passive income, because ultimately it is in many ways. the real advantage of setting up a number of passive income streams is it frees up your time and allows you the freedom of when you work and when you decide you feel like doing something else. This is possible because the money keeps coming in whether you are working on anything or not, unlike a job situation where you only get paid for the actual time you put in.

Unless you have some residual and passive income streams in place (and this includes having someone else do the work for you), then you don't have much chance of ever becoming wealthy. Simply because there just aren't enough hours in a day to literally have to work to earn every single dollar. Money has to work for you, your business has to work for you and people have to work for you in order to go to the next level and beyond financially.

Having multiple passive income streams also builds your financial security, because if one dries up, you still have other sources of income to sustain you. This creates a more stress-free life and also allows you the time to build a new income stream if one disappears, without all of you income disappearing at the same time.

Examples of Some Passive Income Ideas

Bank interest
Shares/dividends/investments
Royalties (books, music, apps, software, T-shirts etc.)
Inventions and patents
Real estate investing
Residual or trailing commissions on sales
Selling your own product (or someone else's)
Selling an online course
A membership site
Vending machines
YouTube videos and receive advertising revenue
Stock websites (photography, music, video footage)
Lending money for interest
Setting up and selling franchises
Be a silent business partner
Outsourcing your workload or hiring employees
Affiliate marketing

Passive income can lead to true lifestyle freedom where you have both time and money and can live life on your terms.

What we learn here at Wealthy Affiliate can definitely lead to establishing profitable and ongoing passive income streams now and into the future, so take this opportunity you've been given here and make it a goal to achieve the lifestyle you dream of and deserve!