Passive Income Vs Active Income What Is The Difference?

July 14, 2019 2:45 pm Published by Leave your thoughts

Earning passive income is an ideal scenario. It means that you will be earning money when you are not working. You may also see passive income described as “residual income” it means the same thing.

The opposite of passive income is active income. With active income you have to be always working for your money. If you think about a conventional job, you have to show up and do the work that the employer asks you to do not make any money.

The same is true of freelance services businesses. Let’s say that you are a freelance writer. If you do not have people providing you with orders for your services then you will not make any money. This is true with any kind of service that you offer.

Passive Income does involve some Work

In order to be successful with a passive income strategy you will need to do some work upfront and possibly some ongoing maintenance work. It may take time for your passive income stream to kick in and generate the income that you desire.

Passive income is not a miracle. It is not an overnight “get rich quick” scheme and it will require you to put in some effort. But if you do it right then your efforts will reward you over and over again. There are people earning money today from passive income streams that they set up years ago.

It is not a Lump Sum

We are not talking about receiving lump sum payments here. You are not selling an asset or gaining an inheritance. It is a regular source of income that will continue for a period of time. The time period will vary. If what you are promoting is “evergreen” then there is no reason why you cannot generate income for years.

It is not Totally Secure

It is not wise to totally rely on passive income as you can never be certain how much you will generate in any given month. It is also tough to predict when it will end so you need to be smart here.

Everybody needs money to survive so if you have a job or run a freelance business then you should continue to do this while you are creating passive income streams. If you do a good job with your passive income work then it will probably overtake what you can earn actively and this is when you can decide to focus your full attention on it.

There is often a need for Maintenance

If you are deriving your passive income from the Internet then you will need a constant supply of visitors (traffic) to your offers so that you can earn money. Even if you are relying

on traffic from search engines which should be pretty constant, it is always wise to have other traffic strategies that you can use such as ads.

You may need to run solo ads or find new solo ad sellers if you are not getting the results that you want. It could be that you need to create some Facebook ads to generate further interest. Or you may have to embark on a PPC advertising campaign. These are all maintenance activities that require effort (not much though!).

Multiple Passive Income Streams

Because there is a level of uncertainty with passive income you need to develop several streams of passive income. This will take a fair amount of effort and testing to get it right and you should consider this to be an investment.

There are people that are earning hundreds of thousands in passive income each month. They did not achieve this in a few days or weeks but steadily over time. There is no reason why you cannot do this too.

Recurring Income

This is a really great passive income model. You get the customer to sign up to something one time and then they have to pay a monthly fee each month to keep it going. A good example of this is Web Hosting.

If you can earn a commission from several recurring income streams then you really are in business. There are many opportunities for you online – it is all about traffic and conversions. Develop your passive income strategy today.


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This post was written by earnprestigelifestyle

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