What is Active and Passive income?

 

The time given by you is spent in doing some work that money you received from it is called income.

The money you get in return for doing some work is called income, whether it is yours or someone else's.

There are only two sources of income, either by doing a job or by doing your business. Although there are many types of income, but mainly there are only two types of income

1.  Active income 

2.  Passive income 

Active income.

People in the world earn money in two ways, first those who do jobs and second those who earn money by doing their business. But one thing remains the same in both, and that is, when you work, you will have income, if you do not work then you will not have income. This type of income is called active income. For active income, you will have to work by staying physically active. If you work in a company or anywhere, then you will have to do work in it regularly, which is given to you by your company.

If you have a business then you have to look after activity. You will have to do all the accounting of your business, how many goods came and how many goods went, profit and loss also have to be seen. You have to do regular work for active income. 

As long as you work actively, you will keep getting regular income, if you don't, you will not get income.

In active Income, money is earned through direct effort and work. It includes wages, salaries, tips, and earnings from self-employment or freelance work. Essentially, you have to actively work to earn this income

Sources of Active income.

Employment: Salaries, wages, bonuses, and           commissions from working for an employer.

Freelancing: Fees or payments received for            freelance work or contract services.

Self-Employment. Income generated from              running a business or working as an independent contractor.

Professional Services: Earnings from providing  professional services like consulting, law, or medicine.

Passive income.

In this world, money is a necessity for every person and every person has to work for money. Everyone wants to earn money and it is everyone's dream that there should be a way in which one has to do less work to earn money or there should be a way in which one has to work once and income keeps coming, this is possible only through passive income.

Through passive income, you can earn rmoney while sitting at home and sleeping. You don't have to to do regularly work for passive income.

Passive income is that income which is received regularly without working daily or by working just once.

If you are getting regular income by doing less or one time work, called passive income. Whether you work or not, still you are getting income, then it is passive income.

Passive Income is money earned with little to no active involvement. It typically comes from investments or assets that generate income over time. Examples include rental income, dividends from stocks, interest from savings accounts, and earnings from royalties or business investments where you’re not actively managing the day-to-day operations.

If you are thinking that you should also earn passive income then , then you will have to create sources of passive income.

Below are some important sources through which you can earn passive income

 

 Sources of passive income.

The trend of many people is moving towards passive income. There are lot of options for generate passive income. There are some things that you can do even without investment. Some below are the good option for making passive income

Rental Income.

It can be the best and very safe way of making passive income. You can buy some land and build a house on it and give it on rent. It costs a lot in the beginning, but for the future, this will be become a very good source of passive income.

 Interest.

You can also generate passive income by giving your money on interest. This is good source but it is not safe option. If you what to then do this at your own risk.

   Business Income

Earnings from a business where you’re not involved in day-to-day operations (e.g., owning a franchise or shares in a company).

 

  Stock market.

Stock market can be a good option for passive income. There are many person who are earning very good money from stock market. You can also make very good money from stock market and creat passive income. If you also want to earn money from the stock market, then you should have some money to invest in the stock market because you cannot earn money without investment. But, you need to learn well about the stock market before investing because in the stock market, if you make profit then there will be loss also.

Royalties

Payments received for intellectual property like books, music, or patents.

Fixed deposit in bank.

Fixed deposit is the very safe option for passive income. If you have money in your bank, then you make it in fixed deposit in any bank and you will get interest on fixed deposit. you will definitely get interest rates on fixed deposit.

Affiliate marketing

If you want to creat passive income without investing money, then affiliate marketing is the one of the best option. Actually you can earn money from Affiliate Marketing by selling online products on commission based.

Blog.

Blogger is also making passive income from their blog. This is another option making passive income. If you have a good blog then you can generate passive income. There are many way to creat passive income from blog.

Youtube.

This is very good option for passive income. If you want, you can also make passive income by uploading videos on YouTube. There are many youtuber who are earning good money from YouTube. 

Digital marketing.

You can generate passive income through digital marketing. If you know digital marketing and you are an expert in it, then you can earn good money by doing digital marketing work.

These are the other source for making passive income, but if you want then you can create more option for making passive income in your life.

        Benifit of passive income.

Earn unimagined money.

If you have created a source of passive income, you can earn money sitting at home and you can earn so much money that you cannot even imagine in your life 

No need regular work.

There is no need to work regularly for passive income. People who are making passive income do not need to do regular work, they work according to their schedule.

Be your own boss

By generating passive income, you can become your own boss. You neither need to follow anyone's orders nor you need to listen to anyone.

No Time boundaries

There is no need to give a fixed time for passive income, because there is no fixed time required to earn passive income. Work at the time that suits you

Financial freedom.

If you create your own source of passive income, then you will not need to worry about money. Through passive income, you will be financial free and when you become financial free then you will also become tension free in your life.

Security

Having multiple sources of passive income can serve as a safety net, providing financial stability in case of job loss or economic downturns.

Complete your all desires.

See, everyone has some dreams and there are many such desires which they cannot fulfill but you can fulfill your dreams and desires with the help of passive income.

Wealth Building.

Passive income, when reinvested, can help build wealth over time. This approach can accelerate savings and investment goals, ultimately contributing to long-term financial independence.

Work-Life Balance.

By generating income that doesn’t require daily effort, you can reduce the need for long hours at a traditional job, leading to improved work-life balance.

Retirement Planning

Passive income can supplement retirement savings, ensuring a steady income stream even after you've stopped working actively.

Different between Active and passive income.

For active income you have to do regular work for income whereas in passive income you can earn by working just once while sitting at home.

In active income you have to go regularly on time, there is no freedom in it whereas there is no time for passive income, you can work as per your wish i.e. whenever you feel like working then you can work and if you don't feel like working then don't do it

If you are working for active income, then there will definitely be some boss on you or else you have some business, in this you have a lot of responsibility which you have to look after regularly, but in passive income there is nothing like this, neither you will have any boss nor will there be any responsibility on you.

Active income often provides more control over earnings through direct work, while passive income depends on the performance of investments or assets.

There is no limit of passive income, you can earn as much money as you want, whereas in active income you get a limited monthly income.

If you want to be financially free, then you will have to create sources of passive income, whereas with active income you cannot become financially free so quickly.

For active income, you have to work hard, but you can earn passive income by being independent.

Active income usually has a more predictable and steady stream, whereas passive income can be more variable and dependent on market conditions or the performance of investments.

     Why passive income is important? 

If you want to earn lot of money then you have to think about passive income and have to make passive income. You can earn a lot of money from passive income even while sleeping at your home. Now a day, one source of income would not be enough for you. You have to make another sources of income and it is possible only by passive income. If you want to make your future bright, then you have to create a source of passive income. Once you create the sources of your passive income, it will work even in your old age. You can earn very good money money from passive income that you would not have even imagined, and you can live a luxury. You can get financial freedom form passive income.