Active Income Vs Passive Income: Which One Is Better For You

Active income vs passive income

We all like to work and bag a better position in a company and be receiving a meaningful salary every month with active income, and while passive income, we all know it comes slowly but better, as anybody can make a significant amount consistently for life. making money with active income vs passive income which one would you go for.

Let’s delve into the article more to get enlightening.

You are working for a firm, you stood for the company for about 25 years and one morning the MD of the organization wakes up and tender you a sack letter, your monthly active income will immediately stop too. This is what active income do for you.

For example, you graduated from school, you were unable to secure a better job or you decided never to work for any organisation and you go on to established yourself maybe through any online business.

For the first few months, you are not making any income, as time goes on, the online business started picking up, you are making some cash, the money was not enough to pay all your bills at first.

After a few years, you have built the business to a stage where you are making a significant amount of money every month, you are scaling the business and more money keeps coming to you.

Within another few years, you are earning a six-figure monthly income from one or different online business streams you have created.

You become the boss that no one can wake up to sack or chase away from work and your money keeps on coming every time you need it.

You are the boss who now work independently and the money coming. This is what passive income do for you.

What Is Active Income

Active income is money earned in trade for performing a service, it can be on an hourly, wages, salaries, or commissions basis, your sweat has to drop before you can earn better.

Inactive income jobs, you are always expected to stand up for the company works like you can lay your life for the organisation to stay relevant in the company.

For better understanding, active income deals with if you have ever worked to earn a salary, wages are known as active income.

What Is Passive Income

In terms of passive income, this is money earned on an investment, or work done for year’s and money never stopped coming in from the effort you have made in the past.

Passive income is putting your money to work with little or no effort and yield the results for years to come.

For a better understanding of passive income, let say you invested in a real estate company or you are fortunate to have a rental property, or building an online business over the years.

These are investments you have made that guarantee you a passive income, either on a monthly, quarterly or yearly basis, you are making money. This is the magic in passive income.

How Can You Make Money Active Or Passive

The way you want to make your money depends on you, this guide is for you to know the difference between active income and passive income and the one that is far better to make a living and live a fulfilled life.

This is now at your disposal to choose what you think is going to work for you best, for better understanding, let’s show you a few ways to make active income and passive income.

If you want to go passively, there are numerous online jobs you can do that give you money passively and here are some below:

1. Affiliate Income

Affiliate income is one of the best ways to earn money passive income, your work as affiliate marketing is to refer people ( Your audience) to companies and once sale come through your link, you get paid for the work done.

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To this, you need a website, blog or social media pages with lots of people interested in what you are about to be promoting.

The opportunities to make money passively in this model is unlimited as thousands of companies offer openings for someone like you and I to earn every day.

2. Rental Income

Buying a rental property also is another source of earning passive income If you have the money to buy a rental property, it requires a huge upfront investment but if you were able to pay the sacrifice, you are going to be pulling in monthly income for as many years until your death.

The money is in the tents, make sure you are getting the right people.

3. Digital Products

If you want to make big money passively, you need to consider creating digits products like an ebook, online courses and others, this is a guarantee to generate six-figure even seven-figure for you within a short period and continue the process forever, once you have a large audience that is reading consume what you have then the money will keep on rolling in for you.

Related: 7 Passive Income Ideas that are legit in 2021

The can create a singular digital product and sell it for many years, sometimes you may not need to create the product yourself, you can outsource it and make money from what you paid for.

Just make sure what you are offering is of value to the user, nothing can stop your passive income from coming to you.

If you want to go Active Income way, there is still money to be made and some of the ways to make actively are highlighted below.

1. Salary

Without telling most of us, we know what it takes to earn a salary, 

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you go to work early in the morning, and leave by evening, some night. You get paid for your effort toward the company at the end of the month.

In a very short form, you are trade your time and skill in exchange for a certain amount of money every month.

2. Hourly Wages

Hourly wages are known to another way of making money actively, take for instance working for a company that pays you at end of each working session is offering you wages it often does in part-time.

Hourly wages of earning active income can be done full time too, it all depends on you.

One of the best benefits of hourly wages form of income is that it allows working overtime to make more money.

3. Commissions

Some may think does this fall under active income stream, yes, for example, a real estate agent who strikes a deal and sells a property earns a commission based on the effort he/she made to find a client and seal a deal that results in the selling of the property.

If you are in sales, then any commissions you make are in form of an active income. 

It has the highest potential to earn you the biggest money in active income.

Active income vs passive income which one is better For You

With all sincerity, passive income is better than active income.

Passive income can generate money for you even when you are not working, once built there is a tendency to keep on making the money for life.

In passive income, your physical presence is not always needed and little efforts are required to continue making money.

If you have a passive income stream, you can make money at any time and for life, whether you are sleeping, on vacation, or watching tv, you are still earning passive income.

It takes years to build but it worth the sacrifice.

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