Passive Income: What is it?

You came to this site, more than likely, to learn about passive income. There are many sites out there similar to this one, but who will claim to know the "secret" to "unlocking vast wealth and untold riches" or some crap like that. Passive income is money you make while you are doing something else. By that definition if you have a savings account then you are earning passive income.

There is no secret site you can log onto, no ultimate plan that if followed will lead to you not needing a job in a few months; it's about putting in work up front that will pay off in the long run. If you mow lawns every Saturday for the next year and then invest the money you earned, then the interest you accrue is passive income.

A lot of people don't like that last sentence; it always boils down to "I don't want to work, I want to make money while I sleep". Without an investment of sweat or money you simply aren't going to earn anything ever, and if that isn't what you wanted to hear then this site and the entire notion of passive income is not for you.

If you're willing to invest, or get dirty, then let's dive a little deeper into some of the types of passive income. For the most part it all boils down to different types of investments; stocks and Bonds, CDs, real estate, money market accounts, etc. People have been using passive income to make unimaginable wealth for hundreds of years, they just didn't call it that. I put a post on Facebook a while back that got quite a few people asking me questions. Here it is:

In a 2% interest savings account it takes $92,000 to earn just a measly $5.00 a day in interest.

For many of them it was the first time they had ever seen an example of interest at work. Others who hadn't ever saved up for retirement got scared; For most of us money is a taboo thing that we shouldn't talk about. Every single company I have ever worked for tells you NEVER discuss your earnings with another employee. I understand that policies like that keep employees from getting angry over pay rates, but it may be time for us, as a nation, to start talking about money a little more often.

If you weren't sure of how interest rates worked, or if you had never been given an example rate and what it would mean in daily dollars, then the idea of passive income would amount to "people said if I followed these 15 steps I could be rich". For the most part that isn't true. If I follow the same 15 steps I might end up penniless. It's the same as any other type of investment; it's a risk from start to finish, but one that we mitigate as much as we can.

There you have it, the real truth about passive income. If you're thinking to yourself, "He never told us any real ways to earn passive income", then you need to visit The Blog! and check out my other articles on passive income, working from home/online, my hobbies, home repairs, and much more.