Is Passive Income Ordinary Income

Creating passive income is not just about putting in some effort to earn money, it takes additional efforts to keep the money you have made active.

It’s hard to say if what he was saying was purely motivational or if there were some lessons hidden in here as well.

But what I will tell you with certainty is that his comments don’t make him any friends of MMM.

At least not people who enjoy their personal success by virtue of hard work alone.

His words may motivate others to take more risk and put more energy into creating something that produces recurring income, but they definitely won’t win anyone admirers.

That’s why I left the article without commenting directly on his statements.

Instead, I would like to talk about the difference between having ordinary income and having stable, passive income.

I believe that most people understand the concept of steady, consistent income, but few truly appreciate the importance of it.

Stable income isn’t just valuable because it gives you financial security, it also helps you achieve other goals.

By establishing stability early in your career, you set yourself up for long term success. You establish roots, you build trust, and you ensure that you can fulfill your obligations to family and loved ones.

You are much less likely to walk away when things get tough later in life if you have enough money to see you through those times.

Examples of passive income

is passive income ordinary income

Active income is what we refer to as earning money that requires your constant involvement, typically done through work. For example, if you are an accountant, you would have to be in the office to do your job.

You wouldn’t be able to sit home and wait for clients to come to you or drop off payments at your house either!

In fact, before internet tools, most people still made their living by going into town to find customers and make sales. A few did stay at home and use the internet to market products but this is the minority these days.

With active income, the amount of money you earn depends on how much effort you put in to achieve it. The more time you spend working, the higher your earnings.

But there are some things that can be left alone and reap big rewards. One of those things is investing.

Investing is the process of putting our money to work so that we get returns on that investment (profit). This could be in the form of stocks, real estate, private businesses, etc.

As we already know, investing in the stock market is one of the best ways to grow wealth over the long term. And while owning a business takes lots of work, running one really well comes down to just knowing yourself and being good at communicating and networking.

Dollar amount of your income

Beyond having an employer that pays you, what kind of income you have depends on how you spend your time. More than half of all working Americans hold at least one full-time position, so it’s not always the case that people who call themselves entrepreneurs are actually running their own business.

According to Forbes, only about 10% of self-employed individuals make more than $50,000 per year! The rest earn much less since they depend on sources like Amazon Prime or Shopify for income.

The term “passive income” has become popular in recent years. But is this really appropriate?

No, passive income isn’t ordinary income if it helps you meet your financial goals. And unfortunately, some versions of the word “passive” can give the impression that it is.

Your work

is passive income ordinary income

Creating and sharing content to inspire others to change their lives is a great way to make passive income. However, this isn’t your typical small business idea. This takes more than just writing a good book or creating a popular app.

It requires you to have something special that people are looking for. It can be anything from learning how to bake the perfect chocolate chip cookie to finding the best ways to manage your money.

By offering your expertise as a professional, you get paid for educating other individuals on what you know.

There are many ways to create educational content that makes enough money to produce a steady flow of cash. Writing a book is one of the most straightforward ways to do it.

But this doesn’t mean you should stop there! You can also offer courses, speeches, and talks on a variety of topics related to your field.

Running a YouTube channel is another way to start making passive income. By putting in the time required to grow your audience, you will eventually find yourself being paid to watch movies and games you love!

What about starting your own website? Even if you don’t have much experience with websites, you can still earn money by producing quality content online. There are plenty of free blogging platforms where you can test the water.

The key here is to provide value to your readers by talking about things they are interested in.

Your assets

is passive income ordinary income

A large part of becoming wealthy is owning lots of things that you enjoy. You can’t become rich by spending, but you must spend time doing something you love to make progress towards your goal.

With this understanding in place, we can now talk about what it means to say that someone has “passive income.” It’s simply called "income" that comes in only sporadically, without any effort on your part to generate it.

I'll give you an example.

Say you read this article I wrote today. You're motivated to write back and share it with others or even to edit my writing if you are a writer.

You don't get paid for reading articles or writing replies, but you do get rewarded through the indirect economic exchange that takes place as you spread wisdom to other people.

This reward comes in the form of feel-good vibes and psychological boost that you gain from giving away your hard work to help others. In addition, you earn kudos for being smart and self-aware, which also boosts your confidence.

All of these benefits add up and make you happy, which makes you want to keep sharing your knowledge and moving upwardly in life. This process continues indefinitely, making your passive income source very stable and surefire.

It also happens at a steady rate, so there's no big rush like there would be if you were getting paid more frequently.

Your location

is passive income ordinary income

As we mentioned earlier, you do not need to have a large income to feel good about yourself. Many people with low incomes are still successful because they focused on investing in things that make them happy and spend time doing things they love.

If you want to know if your income is high or normal, compare it to what “normal” means for other people in similar situations to yours.

For example, let’s say that next month your daughter will be graduating from college. She will probably celebrate by going out to dinner with some of her friends.

She doesn’t really care whether or not she eats at expensive restaurants, so she can choose anywhere as long as it’s within our budget. Therefore, how much money we spend on this celebration becomes important.

By using one of our examples again, here are some numbers related to this event.

General guidelines tell us to eat like a person who makes less than $1000 per week. Because my friend does not pay for his food, I will use him to determine how many people our budget should accommodate.

Therefore, her budget should be enough to feed two people. Now, we must figure out who these people are!

We can easily assume that most anyone celebrating their child’s graduation is eating themselves, so we will allocate half of the money to each of those individuals.

Take a break

is passive income ordinary income

We are constantly being told that the key to successful living is more money, having more things, bigger houses, etc. But what if we took it one step further? What if achieving true happiness was simply a matter of having enough money to satisfy your basic needs (food, shelter, clothing) as well as fulfilling and satisfying your desires (hobbies, vacations, etc)?

I’m not saying you can’t be happy spending all day every day buying new gadgets, owning a houseboat, and traveling the world, but staying in this state of constant desire to fulfill your dreams takes lots of resources!

It takes an incredible amount of energy to keep yourself motivated for such large goals, and it can become boring or frustrating when you don’t reach your goal. It also doesn’t leave much time or energy left over for relationships because you’re busy chasing your dream.

What if someone came up with a way to achieve their dreams while at the same time giving back to others? I think most people would agree that this type of lifestyle isn’t very motivating.

So why not combine the two? Why not create a system where everyone has access to the tools needed to succeed in life while also getting some moral satisfaction from contributing to the community?

This is the basis of my philosophy about wealth. My term for this concept is “intentional poverty.

Multiply your income by the factors mentioned in 9)

is passive income ordinary income

Most people think that earning more money means having more money to spend, but this is not true for every person. For example, someone who makes $50,000 per year may feel they have little left over after paying their bills and supporting their loved ones.

If you add up all of the additional things you pay to earn more money, you will find that it is actually much less than most people believe.

The reason why this is important to know is because investing is very expensive! If you could easily afford an investment strategy when you first started investing, chances are you no longer can.

This article will talk about how to increase your personal investing power so you can invest in the future without breaking the bank.

Compare it to the factors mentioned in 10)

is passive income ordinary income

As we discussed, being rich is not about how much money you have, but what type of lifestyle you live with your money.

Being wealthy is living a life that makes you happy and keeps you motivated to keep achieving more.

You feel accomplished and know that you worked hard to get where you are.

It’s having enough income to satisfy your basic needs (food, shelter, safety), and then some extra to enjoy yourself. It’s understanding that whatever level of wealth you have, there will be people who have far less than you do.

This isn’t something special or unique to only a few people, it’s just part of human nature. We all compare ourselves to each other and think “I could never be like them”, but aside from their very fortunate genetics, they too were able to achieve things because they worked really hard for it.

About The Author

Tiara Ogabang
Tiara Joan Ogabang is a talented content writer and marketing expert, currently working for the innovative company With a passion for writing and a keen eye for detail, Tiara has quickly become an integral part of the team, helping to drive engagement and build brand awareness through her creative and engaging content.
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