Passive Income Questions

So I have decided to try and answer the most common question on passive income in one post! Now there are sooooo many questions out there on this topic so I cant just answer them all. But here are the top 10 questions on passive income! 

What is the definition of passive income?

Every single definition of passive income is different – but I have tried to answer mine using my own understanding and make it relatable. 

Passive income is where you receive compensation for an activity in which does not currently require regular and onerous work. 

Such examples include investing in shares from a company and receiving dividends as your compensation.  After investing the money into the company, you have not actively had to do anything to manage the company or your investment. It just sits there and generates income for you.  

In contrast to passive income is active income like a 9-5 job that does not generate passive income, as you are required to actively work on the job and you only receive money for the time spent at work. 

How do I generate passive income?

The easiest way to generate passive income in my opinion is to buy a parcel of shares and just sit back and wait for the dividends to be paid into your account. There is no pressure or any extra work required from you. Just sit on the couch and wait for the passive income to be paid into your account. There is however plenty of other ways in which passive income can be generated – for these please follow my link here for 30 different types of passive income.

Is passive income worth it?

Yes!!!  Passive income is totally worth it – instead of just getting paid for the number of hours of work you do, now you can get paid regardless of whether you sit on the couch all day or sleep all day. This is the type of income you want to be generating and not the type of income that depends on the number of hours that you work. The Millionaire Fastlane explains the concepts of the sidewalk and the slow lane and says that no one will ever get anywhere by just saving 10% of their salary. This will only get you rich when you are 65 and too old to use any of the money. Whilst not explaining that you need passive income and in fact MJ actually is against share investing.  

Types of passive income 

Please follow my link here for 30 different types of passive income

What is an example of a passive income?

An example of passive income is investing in shares from a company and receiving dividends as your compensation.  After investing the money into the company, you have not actively had to do anything to manage the company or your investment. It just sits there and generates income for you.  There is however plenty of other ways in which passive income can be generated – for these please follow my link here for 30 different types of passive income.

Is there such a thing as easy passive income?

Yes – If I wanted to generate $50 of passive income each and every year, it would take me 5 minutes. Log on to my bank, buy a $1,000 parcel of shares that pays a 5% dividend and never do anything again. That’s it. So there is definitely such a thing as easy passive income. Where it gets much harder is when you need to start generating passive income without having any initial investment into something with dollars but with only time. 

Can you live off passive income?

Absolutely! One of the books I have read covered this perfectly (5 Day Weekend) which had the viewpoint that once you know what your expenses are in say a week or a month, then you can work towards that as your goal for passive income in a way or month. If you can reach those weekly expenses via passive income you can reduce the number of hours a week you undertake through passive income. Not working at all may be difficult but entirely possible. 

Why passive income is important?

Passive income is important, as it is the exact opposite of active income. You are no longer receiving remuneration for the exact amount of hours that you have put into something. You are receiving money irrespective of what you have done that week. 

How can I make passive income in 2019?

Please follow my link here for 30 different types of passive income.

How can I make my college passive income?

Please follow my link here for 30 different types of passive income.

Want to read more?

If you are like me and want to read all there is one generation of passive income, then follow this link through to my Top 30 Passive Income Ideas. Here I list out similar ideas to the one above, and go into detail explaining how to generate passive income through them. 

I also have my Top 10 Passive Income Book list that I save you hours and hours of reading and take the very best lessons I learnt from each book. 

Leave a Reply

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