Ganibade
Verified member
Your pay is effectively the fixed rate at which you sell your time for money at work. The ancient saying "You, as an employee, are working to make your boss rich" applies because in order for the economy to function as a whole, the employer must buy your time and profit more from it than he is paying you.
You must learn to add "additional passive income streams" to your income in order to begin to escape this "linear" way of supporting yourself. Additionally, they might be paid on top of your compensation from your job, and passively, as they "take care of themselves" and operate in the "background" of your life.
Passive income typically requires some setup work before it can create a consistent income (which may last forever!) with a little 'effort' to keep it going.
Renting out real estate is the best example of passive income, yet it's not the simplest. This has the problem of requiring a significant initial financial investment. True passive income "streams" begin with no initial investment and grow over time into significant "rivers" of income.
Rent is regularly paid by renters when you rent out a property, so you can actually calculate how much money you will make each month. This passive income is fixed. The first part of the "job" is that you
The exchange of stocks and shares is another form of passive income. I am aware that this includes risk, as do many projects that provide passive income, but the concept is straightforward. Purchase and hold shares in a reliable company that you are confident will be around in the coming years.
The key takeaway from this example is that any "Dividend" paid on the shares, not their increase in value, constitutes the passive portion of income. Similar to the real estate example, the "Capital Appreciation" portion of the equation may significantly increase, but the passive component is in the regular dividend payments. This model is less fixed than the rent because these will vary.
You must learn to add "additional passive income streams" to your income in order to begin to escape this "linear" way of supporting yourself. Additionally, they might be paid on top of your compensation from your job, and passively, as they "take care of themselves" and operate in the "background" of your life.
Passive income typically requires some setup work before it can create a consistent income (which may last forever!) with a little 'effort' to keep it going.
Renting out real estate is the best example of passive income, yet it's not the simplest. This has the problem of requiring a significant initial financial investment. True passive income "streams" begin with no initial investment and grow over time into significant "rivers" of income.
Rent is regularly paid by renters when you rent out a property, so you can actually calculate how much money you will make each month. This passive income is fixed. The first part of the "job" is that you
The exchange of stocks and shares is another form of passive income. I am aware that this includes risk, as do many projects that provide passive income, but the concept is straightforward. Purchase and hold shares in a reliable company that you are confident will be around in the coming years.
The key takeaway from this example is that any "Dividend" paid on the shares, not their increase in value, constitutes the passive portion of income. Similar to the real estate example, the "Capital Appreciation" portion of the equation may significantly increase, but the passive component is in the regular dividend payments. This model is less fixed than the rent because these will vary.
