What Is The Difference Between Passive and Non-Passive Income

Passive or active income

Have you been wondering why some people worked hard and get rich but some don’t? Some are enjoying the fruit of their hard work and some are stuck on having an income just for their monthly bills? That is because there are two kind of hard-working people, the Passive Income and Non-Passive Income earner.

You might be one of those people who are earning passive income or non-passive income but unconsciously doesn’t know anything about it. In this article I am going to share with you the difference between passive and non-passive and by the end of this article you get to decide which one is better and which one would be best for you.

Passive Income

Cash Flow

Passive Income base on my own definition is earning money while you are on vacation, traveling, or sleeping. Earning money while resting. But here is a definition from Wikipedia about passive Income. “Passive income is income resulting from cash flow received on a regular basis, requiring minimal to no effort by the recipient to maintain it.”

Yes that is true! But I would like to add something before “requiring a minimal to no effort.” Before reaching that point, dedication, persistence and hard work is required to set up your business before you can truly say the word minimal to no effort.

Work for Free before Passive Income

Are you willing to work for free? Well, sometimes it depends on people or company you are working for. Let us set an example. Some strangers ask you suddenly if you would want to work for free or to volunteer. Would you say “Yes”? 90% percent would say “No” and the rest is just because they are too kind to work for free. What if famous people like Vin Diesel or Megan fox? Absolutely you will. Same thing goes which company will offer you to work for free.

Working for free

I remember when I like someone when I was still younger than I am right now, I would probably work for free and take the risk to court her because I know that soon, it could give me the result that I have been waiting through my hard work. Same thing goes with business or online business.

Accepting the fact that you have to work for free is essential for you to see the results. Online business like blogging or Affiliate Marketing requires you to work for free at least 3 to 6 months before seeing some results. Quitting before you actually see some results will lead you to nothing.

Passive Income Opportunities

There are tons of businesses out there that gives you the opportunity to earn a passive income. Example of those businesses are, Dropshipping, Affiliate Marketing, Online Courses, Real state, Write an E-book to sell, YouTube Videos, and a lot more.

The good thing with passive income businesses is the opportunity to give you freedom to do what you want. No boss, No 9 to 5 Jobs, You have time for your family, very profitable once you established and no fix salary. Yes it requires time and effort but once you build it up, the opportunity is endless.

Affiliate marketing!

One of my favorite passive income business is Affiliate Marketing. It gives you the freedom to almost anything you can think of. The best thing about Affiliate Marketing is the freedom to pursue what you really want, in other words, your Passion. You love pets? write an article. You love music? write an article. Anything that you love is profitable when it comes to affiliate marketing.

What I love the most about affiliate marketing is the opportunity to help people on their needs and to give information. What do people nowadays doing when they want to gain information or to learn something? Google. There are over 4 billion internet users in the world and most people are relying on google search engine.

They want to know the best leash for dog? Google. They want to know how to play guitar chords? Google. Or maybe they want to learn how to start making money online? Search in Google. Most people that need information are relying on google. That is why I love Affiliate marketing because it give me the opportunity to provide information to people who are in need of something.

PASSIVE INCOME BUSINESS

Why Passive income?

Who does not want to earn money over and over again for work that you did once? Most people’s dream is to earn money while sleeping, enjoy with their family on a vacation. The freedom to do what you like without thinking about your financial status, The freedom without thinking that you have a job that limits your time with your family. Who does not want to be financially free? Only passive income businesses can bring you the freedom that you desire.

Here is my favorite quote from Warren Buffet: “If you don’t find a way to make money while you sleep, you will work until you die.”

That quote change my perspective 5 years ago from: find a decent job and earn money, to: look for an opportunity that will give me a passive income.

Non-Passive Income – Active Income

Active income

We’ve all been there and probably, you are still working on a daily basis that gives you a fix weekly or monthly income. Income that is already budgeted for your monthly needs. Income that is not even sufficient for you and your family’s needs. There are some work that gives a higher salary to sustain you and your family’s needs but educational degree is required. The question is do you get the freedom that you desire?

Non-Passive income from my own definition is a fix income no matter how hard you work. You work harder or not you still get the same monthly income that was offered to you. The good thing is that once you apply for work you get your salary right away in a month so you have nothing to worry about your monthly expenses. The not so good thing is that you have a fix weekly or monthly salary except if you get promoted from work that gives you a little salary increase.

Here is a definition from Investopedia about non-passive income, “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.”

An example of non-passive income is company worker, school teacher, driver, and a lot more. Anything that you work in a regular basis in exchange for money. In short, You work for money. There are some people who really want a non-passive income because they believe that, that is the only way to support family’s needs. Little did they know that there are a lot of opportunities to build up a passive income business while doing a non- passive income business.

What Will You Choose?

Passive and Non-Passive income

It is all up to you to decide whether you want to build up a passive income business or you want to stay as a worker. You do not need to quit your job to start a passive income business. You could do both for now until time comes that you could actually tell your boss that “I Quit.”

If you want to learn how to start affiliate marketing business, Click here!

If you want to know my No. 1 recommended platform called Wealthy Affiliate that teach step-by-step on how to create a profitable online business, Click the link below.

Wealthy Affiliate

If you ever need a hand or have any questions, feel free to leave them below and I will be more than happy to help you out.

All the best,

Ford Juan

founder of Affiliate Entrepreneur

email: ford@affiliatentrepreneur.com

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About the author

Ford Juan is an Entrepreneur for 4 years from 2011 to 2015. From 2015 he started Online Entrepreneur and now he is currently a Full-time Affiliate Marketer at Wealthy Affiliate. The No. 1 Best Affiliate Marketing Platform in the world.

Comments

  1. Thank you for this exciting article! I am tired but felt I had to read everything because it was very interesting.

    You are right, as long as you do not make money while you sleep, you have to work until you retire and get a pension (then you get money while you sleep lol!). This article opened my eyes and I now see the difference between passive and non-passive income. Haven’t thought about this before.

    I realize that I have to make some changes in my own life, so I don’t have to have to work so many years. This is really interesting, especially what you mention about affiliate marketing. I’ll look into this. How much work do I have to expect to put into it to get passive income in 6 to 12 months? And how long time do you think it takes before I earn enough to not think about money?

    1. Hi Erlend! Thank you for appreciating my article. I hope that you now have the idea about passive and non-passive income. Yeah, There are so many ways now how to make a passive income online business.
      All you have to do is dedicate your time and effort. If we are talking about Affiliate marketing, It will take about 3 months before your website get trusted, 6 months time is possible that you will earn but it is not guaranteed. All you can do is trust yourself and not to give up.
      I can’t give you the answer about how long will it take before you earn. It is all up to you and to your effort. If you still have any question or concern please feel free to leave them below and i will be more than happy to help you out.

  2. Well written and very informative article. I certainly think that working for free is essential if you want success. A few months of hard work for very little can reap huge rewards if your serious about creating a passive income. I’ve been self employed for quite a few years, but still trading time for money.

    1. Hello Kathy Joyce. Yes absolutely right. The key to success is to never stop dreaming. You know why? Because It is free to dream big and that free dream will soon come into reality. IF you still have any concerns just leave a comment below and i will be happy to help you out! Peace!

  3. Hello Randyford. I commend you for differentiating non-passive income earner from passive income earner. I think that passive income earner has a lot more freedom in many ways. At the same time, the earnings are decent and can sustain oneself and family. Also, I like what Warren Buffet said, which you quoted. It is somewhat true. I’m really eyeing for passive income these times and would like to take a look at the one that you recommend. Thanks for this helpful information. Wishing you the best!

    1. Hello miss elaine! Little did you know that passive income is not just to sustain oneself an family. The opportunity is endless and and will give you an endless of passive income too that will bring you to the freedom (Financially) that you desire. I hope this helps. Thank you! If you need anything just leave a comment below. 🙂

  4. Hi Ford Juan
    Thank you for posting this informative guide on passive and Non-passive income. Your guide reminded why passive income is important and how powerful it is. Personally, I am at that stage you talked about where I am working for free in order to reach my goals of passive income. I will carry on working hard and not quite before I see results.

    Thanks, Tuawhenua

    1. Hi Tuawhenua! Good to know that you are willing to work for free. I admire your hardwork. Keep up the good work and soon you reap what you sow. If you still need something or have any question please feel free to leave them below and I will be more than happy to help you out. Peace.

  5. Great article, for me there is no real true passive income, only semi passive as in most cases the work has to be done initially inorder to get to the stage of being called passive.

    1. Hi derek! Each person has its own perspective. You are quite right because you still work hard before achieving the passive income that you have been waiting for. Meaning, you work hard for it in exchange with a huge result. Thanks for sharing your thought.

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