What is Passive Income and How to Achieve it

Passive income is a magical concept for some people. It is the act of making an automated income that requires little to no effort to maintain. This is a dream to most people and not many people achieve this. Having money pour into your bank account while you are sleeping sounds amazing. To understand passive income you will have to first know the two different types of income.


There are two types of income that exist, and that is Passive income and Active income. Active income is when you trade time for money and you have to be present actively to earn that money. For example, a job is a form of active income as you have to be present to earn money and you cannot be elsewhere other than your place of work. You have to spend time and effort for money. Active income is not a very good concept and can be seen as being a slave to a large cooperation for the rest of your life and not achieving what you want. You've heard the saying 'You will never get rich working for someone else' and this is true to some extent.

Another form of income is Portfolio income and this is all the income that is made through investing. This can be seen as passive as you are not presently there and still earning money while not being there. Examples of this include; Rental income from properties, stocks, bonds, trading, mutual funds, buying and selling real estate and buying and selling other assets such as high valued antiques or cars. Some websites that may help you are;

• How to create a Portfolio Income
• Building a Dividend Portfolio for Passive Income
• Build an Income Portfolio that could set you up for life

Here are some of our recommended books that will help you on your path to understanding portfolio income;

• The Financial Times Guide to Investing
• Investing for Dummies
• How to Dominate Property Investing in the UK and Achieve Financial Freedom
• The Naked Trader

Passive income is money that you earn when you are not present and the money is occurring while you do not have to be there. Passive income is when you achieve more money then effort or time used. Passive income should require little to no effort to maintain and can include many things. Passive income includes income from things like; selling information products, earning money from book royalties, writing or ghost-writing a book, writing and earning money from a blog, writing articles for websites such as ehow and earning money, affiliate marketing, etc. The key idea with passive income is making multiple sources of income so you can reap the rewards more and also if one income is slacking, the other incomes will make up for it.

Try a few incomes together and see if it helps build your passive income up. A good thing to do is look at examples of websites and owners that are already achieving passive income. Some website owners actually post their full income on their website, you can use these stats to see what works well and what doesn't. Some example of websites that make passive income are;

• Viper Chill
• Escaping the 9 to 5
• Make Money on Internet
• Pro Blogger
• Profit Addiction
• Smart Passive Income

A newspaper ad from the olden days on how to make more money. It's totally different now, isn't it?

Forums are another good source on how to make passive income online and how to make money. Forums are usually contributed by many users who are already successful in making passive income online and they share their experiences and help other users out. There are a lot of bullsh*t techniques on some of these forums but among the bullsh*t, you will find some pretty brilliant ideas. Some forums that are on the passive income topic are

• Warrior Forum
• IMD Forum
• Associate Programs
• Site Point
• Wicked Fire

Books are really helpful on finding new information. Some of our most recommended books for making passive income online are;

• Online Money Making Secrets
• How to make Money Online: Learn how to make money from home
• Make Money Online: Build a Cash Cow
• The Four Hour Workweek
• The $100 Startup

Once you achieve passive income, you can afford anything!

This article will hopefully have solved all of your questions on passive income and the different types of income there are. There are also helpful websites included in this article that you can use as reference. Do you have any of your own tips on how to make passive income? Do you already make passive income? Share your experience with us in the comment section. If you liked this article then please share it, tweet it or even post it.