It’s the best kept secret of the rich, passive income. The goal of passive income is to get your money working for you, and the more you have invested, the more passive income you will create. But not everyone knows this.
Creating wealth does require a strategy and discipline. It’s not how much money you make that makes you rich; it’s how you manage that money. And passive income is a popular strategy used among the wealthy.
What is passive income?
Active income is where you earn wages and sales commissions, whereas passive income requires very little labor. Bankrate.com states that passive income comes from a source other than an employer or contractor.
Passive income complements the income you are earning from your primary job. It is ideal to have several streams of passive income set up to protect your primary source of income, should you be unfortunate enough to lose your job.
How passive is passive income?
Passive income is commonly known as a way to make money in your sleep, but is that true? You see social media influencers promoting ways to make passive income by creating digital courses. You hear financial planners telling you to create passive income through your investment portfolio. Others ask you to invest in real estate and rent out that property to receive a rental income.
But what you need to understand is that passive income takes work. Some investments take more work than others, but to think that you can invest and not monitor the performance of that investment is a mistake.
The amount of work your passive income will require will depend on what you have invested. But it is misleading to think that you can check out money management, and even investment portfolios require monitoring, and passive income isn’t really passive.
Benefits of having passive income
Passive income streams can help you with early retirement plans. As the passive income comes in, you can reinvest that income into…
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