Active vs. Passive Income

Would you rather be working 9-5 in a cramped cubical working for someone else day in and day out or would you rather be making that same amount of money while relaxing and sitting on a beach? I hope that anyone reading this would choose the latter and sit on a beach. This may sound a little far-fetched but it could become a reality. You may be asking, “How in the world do I go about doing something like that?” In this post, I will explain how having a passive income will allow you to do this and anything else you desire.

Active vs Passive Income

Active Income

Most of the U.S. population has active income. Day in and day out Americans will all wake up in the morning and drive to work. They do this for 5 days a week and 49 to 50 weeks a year. This means that the average person will spend most of their life working only to retire when they are of old age.

Active income means people are actively working to make money. In this system, a person is constantly trading their time for money. If they stop working, then they stop making money.

Personally, I do not want to spend my life this way. I would much rather spend the best years of my life doing something other than being forced to work for most of my day. I do not want to be held down by my job and have it control my life. I would much rather work for fun and work because I am choosing to do so. This is possible through something called passive income.

Passive Income

This form of income differs greatly from active income. Passive income allows you to make money in your sleep. It allows you to get paid when you are relaxing on a beach or hiking up a mountain. Passive income is a form of income that does not require you to trade time for money.

Upon creation, this form of income can take little to no work to make money and that is what makes it so powerful. With the extra time spent not working a typical day job, a person can use their time to continue to improve their passive income or just stop working altogether. The choice is up to the individual on how they choose to live their day.

Best Form of Passive Income

I believe that real estate is the best form of passive income but just to let you know, it is not entirely passive. There will still be work involved in most real estate deals but there are some forms that require very little work.

There are many other ways to make money passively and I challenge any reader to go out and take advantage of them. Each form can be incredibly beneficial and can have the power to change your life. I know I will take advantage of passive income and I hope you will too.