Comments on: What is Passive Income?

By: Customers Revenge

Customers Revenge — Thu, 04 Oct 2007 15:57:40 +0000

Passive income is where you make money without doing work. You leverage your ideas or your assets. In that way real estate is much more passive than an hourly job because you make money off the asset. But it is not as passive as being a slient partner in a business for example.

By: the Wealthy Canadian

the Wealthy Canadian — Tue, 25 Sep 2007 18:53:24 +0000

I agree that true passive income means that you do not have to actively do anything to earn that income. However, I think that all types of passive income do require some initial time (active) investment.
For example; dividends and interest income are truly passive once you’ve committed to the purchase of the income stream, but there is plenty of groundwork before that (which investment to buy, etc).

But you make great points, once the initial time investment is made you can turn many investments into passive income depending on how you structure it (hiring property managers for you real estate, etc).

By: HalOtis

HalOtis — Tue, 25 Sep 2007 17:55:39 +0000

Good points. I think you have to consider that there are many different ways to make money that don’t require that much on going work. Some of them are truly passive in that you don’t have to lift a finger, money automatically arrives in the mail or is deposited in your accounts.

There are however many other opportunites to make money that don’t require that much work. Brian at Geniustypes.com takes one day per month to go collect the money and refill his bulk candy machines. Is that passive or not? I think there’s a range.

The other key point from my perspective is that passive income should pay when you’re not directly working on it. If you were a door to door salesman for one day a month, it’s not passive because you only make money while selling. But Brian’s candy machines are collecting money for the entire month.