What are the Difference Between Passive and Active Income?

[Faith B]

If you are looking to start a new business or are just trying to make ends meet, passive income is the way to go. Passive income is generated from assets or activities that produce an income without you having to actively participate in them. Unlike active income, passive investments require no effort on your part and can continue to pay you after you stop working. But there are some differences between active and passive.
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• Passive income is income that doesn't need to be generated through work. You can use it to make extra money that will supplement your salary while you are at work. For example, passive income is an excellent way to buy a house or move out of your parents' home sooner.​
• It also allows you to have more time for leisure and improve your life quality.​
• Passive income is any money that you don't have to work for. You simply need to invest and let your investment do the work for you. If you invest, you earn a predictable amount of money each month. This means that passive income is a good source of income.​
• Passive income doesn't require a huge upfront investment. It can be started and earn money in a matter of months.​
• If you're looking to get out of debt or improve your balance sheet, passive income is the best choice.​
• Passive income is earned from a company, it requires no work on your part.​
• But the biggest benefit of passive income is that it is completely tax-deferred and not dependent on the passing of time.​
• Active income is a reliable stream of money that you can rely on. It's the kind of money that you receive now, while passive income comes later.​
• Active income is the type of income you generate for yourself.​

Downside of passive;
The only downside of passive income is that you might not see any returns on your investments. You'll have to work for months or years to make it work, which can take years to build. It's also important to remember that passive income strategies may not reap you any rewards at all.
P&A income
By contrast, active income is earned indirectly. The latter can include dividends, interest, rental property, and limited partnership profits. In contrast, passive earnings are not taxable. When you're making money with investments, you're earning passive income. You're not making money from the business itself.

You can choose between active and passive income.

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[moonchild]

Passive income doesn't just start coming in within a short period of time it requires discipline and ability to nurture your business till it become massive is not very common.

Passive income is not really rocket science as you said, but it takes a long time to actualize and produces desirable results.

For example if I have a YouTube channel and my goal for that channel is to make passive income with it then I have to really work very hard for maybe six months or a year to be able to start seeing massive results and I don't really consider YouTube as a typical way to earn a passive income because if you stop uploading on demand videos people will stop going to your channel and one othre guy out there will take your subscribers or veiwers.

A Passive income is one that requires you to do absolutely nothing and still make money and the only platform that fulfill this is fixed deposits where you get to earn passively if you invest a huge sum of money.

That's why I always advise people to start with thinking of ways to generate a lot of money actively and fund their passive income streams

 

[hanif25]

hi I am Muhammad Hanif, active income is the most formal way of earning while passive income is just informal way of earning.

 

[Mika]

If you have to go to your workplace and do the job all day long and receive a paycheck at the end of the month, or the first week of the following month, that's an active income. Active income is an income that you generate by working regularly. if you have published a book and the book generates regular sales, and you earn royalties on the book sales, that is passive income. In order to earn passive income, you do not have to work every day. Sometimes, active income can become a passive income, for example, business is an active income source, which can later become a passive income source.

 

[Setho]

There is quite a difference between passive income and active income and in fact they are even directly opposite of each other .

When you are making money passively then it means that you must have done something in the past and it is continuously rewarding you . It can also be a means of income nearby you do not necessarily have to work for it or work so much before it can be rewarding you . For example if you have created a blog post and it is there in your website people can be reading it from now up to the next 10 years and you are going to be paid based on the number of people that have visited the site . You can very well consider this as a passive income .

Active income on the other hand means that you have to work before you are been paid and you have to be doing this every time . For example if you are employed to a hospital as a nurse , you have to work for 37.5 hours every week before you can be able to receive a paycheck . You should be able to mix between passive and active income if you want to be financially free.

 

[sincerem]

I love passive income, but at the moment I am earning from active gigs, I need to work more hard to get to earning passive income everyday. Their are times I just feel tired to even go to my device, had it been i have a passive income means, it would help cover up some losses, of not generating from my active gigs online. I don't have any passive income means offline nor active income stream, I earn my income online, such has made me devoting most of my time online than associating with people offline, since I can't earn offline anymore. I want to use my online earnings to establish an offline business and investment that will bring me passive income in the future. It will take time, I'm ready to face the challenge to work everyday online, but not when I'm feeling strained. If I can generate reasonable amount in the future, it can enable me start up an offline business which will turn out to be a passive income stream with time. I'll also build an online business and invest more, and get more passive income in case when I didn't have that strength to handle my active gigs, I can rely on my passive income streams.

 

[Setho]

This is actually something that a lot of people usually confuse them even though they are different ways in which you can be able to make money . I will try to break them out so that you can be able to understand the differences between making money actively and passively .

Passive income is just a general umbrella of the ways in which you can be able to make money without having to work for it all the time . This means that passive income is a source of money that you do not have to be going to a physical office or sitting in your computer from day to evening before you are going to be paid . A typical example of passive income is blogging. If you have created a blog article today , it is still going to be online even up to the next 10 years and people can be able to access it. Provided that traffic keep on going to your website then you are going to be making passive income without having to do anything .

Active income of the other hand are the sources of money in which you have to be working for them every time and the amount of work you put in is the amount of money that you are going to make . An example is the physical jobs in which we are doing . For example if you are a health practitioner for example a medical doctor. There is a specific amount of hours that you are supposed to be working everyday and the hospital expect that you should be able to meet that . If you are going to default for one day then it is going to be deducted from your salary .

If you want to be financially free then you should be able to mix between passive and active incomes.

 

[Chibson]

Passive income is the kind of money you make even when you are sleeping and you are not active. There are a lot of passive income methods currently in which a lot of people have capitalised on and are currently making a lot of money from it.

Active income on the other hand requires your presence in order to make money. People who are making active income on the internet need to be online on daily basis and some hours in order to make tangible amount of money for themselves. the truth is that if you are getting involved on the internet it is important your try as much as possible to make money actively because from there you will learn a lot of things that would help you to make money passively.

Freelancing is one of the most lucrative active income streams on the internet in which a lot of people are using to make some good amount of money for themselves. As a freelancer you really need to be very active in order to deliver gigs on daily basis to clients and probably get paid.

On the other hand passive income does not require your presence on daily basis because you can just set up the system at once and start making money even when you are sleeping. Some typical examples are; blogging, YouTube and others.

 

[Ayuba Ernest]

There are two types of income - passive and active. Passive income is money earned from investments, such as dividends from stocks or interest from savings accounts. Active income is money earned from working, such as wages from a job. Both types of income are important, but they are not the same.

Passive income is important because it can provide a steady stream of money without the need to work. This can be helpful in retirement, when you may not be able to work anymore but still need an income. Passive income can also be helpful in building wealth, as it can provide money to reinvest in other assets.

Active income is important because it is the money you earn from working. This is the money that you use to pay your bills and live your life. Active income can also be helpful in building wealth, as it can provide money to invest in other assets.

The main difference between passive and active income is that passive income does not require work, while active income does. This means that passive income can be earned even when you are not working, while active income can only be earned by working. Passive income can be a great way to build wealth, but it is not the only way. Active income can also be used to build wealth.