What are passive income and active income?

In this article, I am going to discuss what a passive income is and what an active income is. By reading this post you can get a better knowledge about those two streams within examples, advantages, and disadvantages. So you can get a better idea about why you should have a passive income same as an active income.

What is an active income?

Before talking about passive income we should discuss active income. This method is the oldest way of earning and most people in the world are depending on active income methods.

Active income is money earned for exchange, by doing work or performing a service and get paid for the end of that work or service.

If you are doing a job, you will be paid at the end of the month. Simply we can take that example as an active income method. Simply we can say, we have to work to get paid.

Advantages  of Active income

There are a lot of benefits in the active income sources. As an example, when you are doing a job, you have confidence that you would be get paid for your work. In addition to that, you can make money in a short period of working. You don’t need to wait such a big time for taking money to your hand. As an example, if you are doing a part-time job that pays wages per hour, you can have your daily wage at the end of the day

Disadvantages of Active income

There are some risks in active incomes. We can discuss it as below. If you are doing a job that pays you a salary at the end of the month, the main risk is, if you lose the job, your income source will be lost. So you have to spend your valuable time finding another job. If you are not a permanent employee, the employer can dismiss your job at any time without paying you any advance.

For the people who are doing part-time jobs and getting paying their wages at the end of the day, their income source is also a risk just like that. The business people also face to this matter as in another form. The global economy is changing day by day. So no one can guarantee that someone’s business will get profit day by day. Some businessman has to face profit losses due to that global economy and the local economy status. 

What is a passive income?

This method of earning way is getting more popular these days than in the past. This income method is pretty awesome and you can earn money while you are sleeping according to the passive income definition. My experience also proved that statement to me. So let’s see what passive income is.

Passive income is money earning with no effort or little effort to grow the income.

The word is so simple and if you are thinking you can make money without working, you are wrong. No one cans make money without working hard. So if you are planning to earn passive income, you have to work for it in the initial times. But, by the latter, you can earn such good money while you are dreaming, from your passive income sources.

Advantages of passive income

The main benefit of passive income is that you can earn money while you are not working for it. As an example, if you deposit some money in a bank, at the end of the month or the end of the year you can get an interest. If you are on a vacation or traveling, your revenue is getting increased.

So you are not working for it continuously but just saved some money. After you start to get profit, the profit increases day by day. The other benefit of passive income resources is you have no risk on this method. Some passive income methods are 100% risk-free. That means you don’t even have to invest or no any capital expenditure. But in some methods, you have to invest some little money. But it’s not a big deal.

Disadvantages of passive income

When you are planning to start a passive income source, all you need is patience. Because it takes a long time to have such good money in your hand by making money from a passive income source. As an example, if you are going to create an online shopping store, you have to get more traffic to your store. It takes some time to earn some good organic traffic. When people used to come to your online store, they recommend your store to other customers. After the period that you have waiting with patience, your shop status will be increased day by day. And your profit also increased day by day.

What should I choose to earn money from active income and passive income?

Well, this is the most valuable part of this article. Now you have a good idea about these two streams if you read this carefully. I don’t recommend doing just only one of these to earn money. You should make an active income source first. Because some passive income sources are required some money to take their first step. As a human being, you need to fulfill your requirements, responsibilities, and duties. So, you have to wait such a big time if you are planning to make money using only passive income sources.

I recommend you to start a passive income source within doing a job or another active income source. After getting matured in both these streams, you can understand what should you do and what shouldn’t do in these two streams.

I hope you have taken a good idea about what active income and passive income are. Maybe you have more ideas about this topic. Please comment on those ideas down below. So other readers can get an idea with your comments. 

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