We
all think about how to make extra money outside of our daily routine.
There are many different ways of making money. To make money we need to
understand basic of different type of incomes. Here i have put in simple
terms what is Active and Passive income. I will be discussing them more
in my future posts.
What is Active Income
As it's kind a clear
from word "Active", active income mean income from actively
performing a task. This task can be a service or manual work e.g. Project
Management or a Electrician.
According to
Investopedia:
Active income refers
to income received from performing a service. This includes wages, tips,
salaries, commissions and income from businesses in which there is material
participation. For example, an accountant who works for a monthly paycheck
receives active income.
What is Passive Income?
Real definition of
Passive income refers to income received by doing nothing. In reality True
passive income does not exists as you cannot earn money without doing anything.
There is always little effort required to make money. So practically, passive
income means when someone put little effort to generate money and hopefully
after that little effort there is not much else needed.
In my upcoming posts
i will be discussing some Passive income ideas. If you would like to be
notified about my blog posts, please subscribe!
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