Passive income is
the earning in which a person is not actively involved. In passive income, person does not require a
little effort to earn. Passive income is usually taxable. Once, you have to do something
to generate income and then you have to rely on that income. It requires a
little time in the beginning and then it gives you benefit for a long
time/throughout life. Physical appearance is not necessary for
making passive income. Physical appearance
is not necessary for making passive income. In passive income a person receives payment even
after the work is over. With passive income you can make money, while you are
sleeping or doing anything else.
Income
It is the money which an individual received after providing
the services of any kind.
Types of income
There are three types of income
a- Active income:
Income for which services have been
performed.
Examples:
wages, salaries, commissions, and business
income in which one participate actively.
b- Passive income
Passive income is the income in which one
can earn regular income with a very small effort.
c- Portfolio income:
It
is the income from investment including dividends, royalties and capital gains.
Examples
1. Selling informative products
2. Affiliate marketing
3. Savings accounts
4. Rental income
5. Peer to peer lending
6. Invest in high yield CD
7. Dividing stocks Etc.
Sources of passive income
- Profit income
- Interest income
- Dividend income
- Rental income
- Capital income
- Royalty income
The internal revenue
services (IRS) says passive income can come from two sources: rental property
or a business in which one does not actively participate.
Importance of passive income
It gives you the freedom of time
It reduces stress, anxiety and fear of future
You can do things that you want without any fear
It gives you the ability to work from anywhere
Disadvantages
of passive income
1-At the
beginning/setting up passive income take effort and time
2-One cannot
grow overnight
3-It requires diversification to
ensure that you have money flowing in at all times
4-passive income can be
too passive for some people.
How can you generate passive income?
·
By writing an eBook
·
Make YouTube videos
·
Try affiliate marketing and make sale
·
Sell your own products on the internet
·
Put your photography to work on the web
·
Purchase dividends stocks
Passive income can be made by writing
an eBook. There also many other ways to make passive income that includes
YouTube channel, through this we can make informative videos and get unlimited
passive income for life time. BY affiliate marketing, in which we can also make
passive income by generating sales. Passive income can be generated by selling
others products in internet at different websites, by practicing photography we
can also generate passive income and by purchasing passive income is generated.
By purchasing dividend stocks passive income can be generated. So, these are
some of the methods that are used to generate passive income.