What is not passive income? VS Passive Income (Explained)

What is not passive income VS Passive Income (Explained)
Share this post...

Passive income is often misunderstood and confused with side work (hustles). Part-time work (side hustles) is a great way to increase your income, but that’s not true unless it works in a way that allows you to go back (and to earn more).

The Main Examples of non-Passive Income

  • Office job
  • Consulting
  • Side Hustle
  • Investing for speculation

What’s the difference between passive and active income?

Passive income is often a goal for people entering the world of entrepreneurship and real estate. When you build passive income, it means that you are earning money without actively working. In other words, passive income is money that comes in whether you work or not.

Also called residual income, passive income can be earned in many ways. Some examples include investing, real estate, retirement funds, peer-to-peer lending, royalties, and cashing out on rewards programs.

Active income is money you earn while working at your job. It’s the type of income most people think about when they talk about making money. Benefits are wages, salaries, tips, and commissions. It also includes things like bonuses and profit sharing from your company or jobs you have outside of work.

Active income by contrast is easier in that most people have more than one source of this type of revenue stream. You can create multiple streams of active income by giving different speeches or selling different products to the same audience at the same time.

Passive vs active income: which is better?

Building a strong base of passive income will give you the financial freedom to pursue other dreams as well as live a more stress-free life.

Passive income is exciting because it allows you to make money while you sleep! Many people just starting out in life are not used to having excess cash flow while they are sleeping. Having passive income helps sustain your life and reduces stress because you don’t have to worry about paying your bills on time.

Passive income differs from active income which is generated by doing work or labor for someone else. A good example would be an employee that is paid an hourly wage and works 40 hours a week for his employer. 

Another example would be a salesperson who works on commission and gets paid when he sells goods and/or services. Some examples of active income include wages, self-employment, tips, bonuses, commissions, and interest.

PRO TIP! It’s important to note that not all forms of passive and active income are equal when it comes to taxes.

How to Pick the Best Passive Income Stream for You

So here are 10 ways on how to pick the best passive income stream for you:

  • Do your research!
  • Pick something you enjoy doing.
  • Work hard in your day job and save as much as possible!
  • Take action! Start a blog, an affiliate website, or start selling things on Amazon. Experiment with lots of different money-making methods. Keep what works and ditch what doesn’t.
  • Never give up! If you go after it with everything you’ve got, there’s no reason why you won’t be successful. There will always be ups and downs along the way but if you keep at it, you’ll make it work!
  • Don’t lose focus on your day job.  The only way to make any real money is by selling products and services.  Never let your passive income streams replace your day job income because when one runs out, so does the other. You still need your day job to survive!
  • Invest in it!
  • Diversify your stream: Diversification is important in any business venture, and this holds true for earning passive income as well. You don’t want to put all of your eggs in one basket because if something happens to your stream of income, you stand to lose everything. If you have multiple streams of passive income then you know that if one stream dries up, there will be others keeping the money coming in.
  • Be patient: You won’t see results overnight and you may not see them for months or years depending on what path you choose to take. Patience is the key to any sort of investment

What are The Characteristics of Passive Income?

  1. Extra money

Extra money – This one is pretty easy to identify because it’s pretty damn obvious! If your company is paying you an extra $500/month for little-to-no effort, then guess what? You’ve got passive income!

  1. Predictable

Predictable – This is where passive incomes differ from active incomes. With a regular paycheck, you know exactly how much will be coming in every month and when it will arrive! You’ll also be able to plan for illness, vacations, etc. But with passive income, things can be planned anytime even in advance. You can be on a vacation and still earn passive income. This is an extra income that adds up to your bills.

Pro Tips if You Want To Earn Passive Income Faster!

Passive income is a great way to earn money on a regular basis. If you want to make money online, passive income will help you achieve this goal. It’s the key to getting started for many people who are just getting started online. Passive income allows you to build a business that produces earnings over time with little effort from you each day.

Once you learn how to generate passive income, your business will be able to run without your help and still produce an income stream. This is the real beauty of passive income –- building something once and then letting it work for you so that you can do what you want. Passive income is money that continues to flow in your direction even when you’re not working at all!

Passive Income can be made in a wide variety of different fields, including writing, affiliate marketing, selling products and affiliate product creation. It’s important to remember that the quality of your work will determine how much money you make from it. Creating high-quality ebooks, videos and other content will help ensure that your passive income continues to grow over time.

Passive Income requires lots of hard work and dedication but it can also be incredibly fun! If you’re just getting started with making money online then passive income may be exactly what you need.

Pro Tip To All Bloggers! #Earm Passive Income Fast

Just after you published your blog post and got a few initial readers and all you want to do is check the stats on your website and see how many people are finding their way to your content. 

But, for some reason it’s taking longer than usual, even Google has its own issues with crawling your site. You don’t need to worry too much about these issues, but it’s still better if you could fix them, right? 

This is just one of the problems that most new bloggers face. As soon as they publish a piece of content they want to make sure it’s presentable enough to attract both users and search engine bots (more readers = more traffic = more money).


There are some forms of income that can be considered passive but they require a lot of work on your part or they won’t last forever. Some examples include:

  • Blogging
  • Drop-shipping
  • Affiliate marketing

All of these methods require work on your part otherwise they won’t be able to grow or continue. In addition, they can all be dangerous because they have the potential to hurt your brand image when you aren’t providing enough value.


You can create passive income through trading cryptocurrencies such as Bitcoin or Ether. In this way, you can make money while you sleep!

Passive income is income that you receive on a regular basis without having to actively work for it.

Passive income is income resulting from cash flow received on a regular basis, requiring minimal to no effort by the recipient to maintain it.

The primary source of failure for people who try to make money is that they are just chasing the “money”. The primary source of success for people who made money is chasing solutions. To find solutions to problems, there is the key.

“Let your life speak, so that people may see your actions and recognize your values.” ― Martin Luther King Jr.

If you enjoyed reading it, then please do give it a share. Thank You!

Do you have any questions or concerns we didn’t address above? Please let us know in the comments below! We would love to hear from you!



  • How To Become A Millionaire With These Insanely 13 Passive Income Ideas
  • 17 Important Factors to Consider Before Picking Passive Income Streams

Share this post...

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top