Passive income is an income received on a regular basis, with little effort required to maintain it. Some examples of passive income are: Rent from property; Royalties from publishing a book or from licensing a patent or other form of intellectual property, such as computer software product; Earnings from internet advertisements on websites; Dividend and interest income from owning securities, such as stocks and bonds, is usually referred to as portfolio income, which may or may not be considered a form of passive income; Pensions. Other forms of passive income streams include Selling Online eBooks or Software Products and commissions earned through affiliate programs
Active Income on the other hand is the one that is earned via working hard in the economy. And if you stop working, you will lose that entire income stream. The Best Example of Active Income is the job Income. You have to go to your work place to complete a task (job) in order to receive a paycheck at the end of the pay period and if you stop working or get fired from your job, you will lose that Income stream.
It’s funny that when people reach a certain age, such as after graduating college, they assume it’s time to go out and get a job. But like many things the masses do, just because everyone does it doesn’t mean it’s a good idea. In fact, if you’re reasonably intelligent, getting a job is one of the worst things you can do to support yourself. There are far better ways to make a living than selling yourself into indentured servitude.
While I wouldn’t recommend starting an online business for everyone, for many people it’s one of the best ways to generate income without a job. Setting up streams of passive income is the most effective way to improve life-style. You should have three-four different streams of income other than your salary. That way, you can achieve your financial freedom faster.
Here’s an example of a passive income business model through affiliate marketing.
Generating passive income does NOT happen overnight, and in some cases can take years. Relatively speaking, you can get rich quick, but “quick” in the sense that you don’t have to wait until you’re 65 to start living well and enjoying life. Passive Income stream is something that is developed after having to work hard at once.
And once you complete that hard work (task), that’s it. Your job is over. That Income will keep flowing into your bank accounts for the rest of your life … whether you work, sleep, travel the world … or even die.