Passive income can set you free! It means you could be making money while you sleep, or while you are on a beach, the point is it comes to you even after you’ve finished setting it up. It’s like a tap that you can turn on, and just leave running. This reoccurring income is the most sought after thing in the moderns world.

Everyone wants to achieve Passive Income. Who would prefer sitting behind a desk doing paperwork than being on holiday with their family in the Maldives? But lots of people end up working a job or earning an active income because they don’t know how to set up this reoccurring income.

The hard part is turning the tap on in the first place, and getting the money flowing. When you’ve done that however, you can just leave it to generate passive income for you, and walk away, or even add another passive income stream.

Sound interesting? Let’s explain what is meant by passive income and its many benefits.

Passive income is income that’s received automatically with little requirement for maintenance/time. In contrast, Active income can only be earned by directly translating your time for money. Whether it’s a pay-per-hour job or a salaried one, the amount of money you make is directly proportional to your time.

With active income, when you don’t work, you can’t earn. If something were to happen to you and you were incapacitated for whatever reason through an injury, illness or some other calamity, you would lose your ability to earn. If, for example, you were an driver and you fell sick so badly that you were unable to drive, you would lose your ability to do your job and earn money altogether.

Most of the world lives in accordance to an active-income credo. They earn only based on the time that they work. The wealthy, however, operate on another set of standards, which involve a detachment of their physical time for the money that they earn. They earn passive income from a number of sources such as real estate rentals, dividends, interest income, royalties, franchise fees, laundromats, website advertisements and so on.

On the other hand, Creating a passive income stream is a massive undertaking. It involves the investment of a tremendous amount of time. During that investment of time, you receive no income. You’re investing your time with the hopes of producing an income down the road, not today. With active income, the money you earn is directly correlated to the time you work. But passive income continues to pay you long after the work has been completed.

Clearly, there are a number of ways to make passive income. Whether you’re looking to make money online or simply earn passive income through more traditional means such as real estate, stocks, rentals; there are a number of ways to produce these types of income streams. While difficult at first, what you’ll come to realize is not only the importance of having passive income in your life, but you’ll also become addicted to it, seeking out ways to produce additional streams of this powerful fiscal method.

So when it comes down to it, there are likely dozens of reasons why having passive income is important in your life. This doesn’t mean that you have to quit your active-income employment. Of course, if you can afford to do that and throw yourself at passive-income generation, then you’ll fare much better down the road.

But many people simply can’t afford to do that. With debt and other financial obligations, going without income for a specific period is simply not feasible for most.


  1. You are the boss: Sure, you may have a separate job with an employer and a regular salary — but where your passive income is concerned, you control it. Whether you own an online business or traditional business or franchise, rental property, products that you have created, or other income-producing assets, the operative word is own. You are in the driver’s seat; the regularly recurring disbursement of funds into your pocket is a direct RESULT of your actions, and usually proportional to your efforts. Quality matters. But once a passive income stream is created, it’s pretty hands-off from that point on. Its purely an ABC approach – A result of your action will B proportional to your efforts; then you C the money starts rolling in because it is fairly hands-off after!
  2. You can go where you want: In most situations, you do not need to be tied to any one particular location to reap the benefits of passive income. A laptop and an internet connection are likely the extent of what you need in order to check in and stay on top of things once in awhile if you choose the online way for example. Most people with a active income are tied to a specific location.
  3. You have time: One of the most valuable aspects of passive income is time — one of the few things we cannot create more of. What do you want to do? What is important to you? A hobby? Spending more time with your family? Volunteering? A job? Creating more passive income? Go do those things! You can do them, because you have an income stream that is on automatic pilot, and does not have to be your primary focus.
  4. You have security and stability: No matter the economic climate, you have some money rolling in. If your company suddenly downsizes and you’re left without a paycheck, you still see regular deposits into your bank account. If you or a family member becomes injured or sick and you need to focus solely on that for a while, you have one less thing to worry about. With passive income, you can count on money rolling in, no matter what.
  5. You can achieve total financial independence: Why stop here? With the time freedom you create, you can start new businesses that generate more streams of passive income. The sky is the limit. Earn enough income, and live life however you choose.

No matter how you look at it, the importance of passive income is paramount. Many people discount it because they either don’t understand it or don’t think that having passive income that exceeds your expenses isn’t an attainable goal. Well, whatever the mind believes, the mind can achieve. That’s as true for passive income as it is for anything else in life. Believe it wholeheartedly with your spirit, and you can accomplish it. As long as you don’t give up.

Category: General