Choosing Passive Income Over Active Income Stream
Have you ever asked yourself why few people are getting rich while most remain poor in their entire life? Why rich guys are getting richer while the poor ones get poorer? The main reason for this is that most of us do not know or understand the concepts of active income and passive income. However, all of types and sources of income either fall to active or passive.
So what type of income most of us have? Most of us are having an active income. This is a type of where you only earn once for every task or work you have done. Active income is also a type of income where you trade your time for money. If you are not working on a period of time, you are not earning money. Needless to say, this is the type of almost all of us have. If you are an employee, whether you are a minimum-wage earner or your daily rate is 10 times the minimum wage, you are having an active income. From the word active, an active-income earner earns money only when he is active performing his job. He is theoretically selling his time for money. When an employee is absent, he is not earning money. Anyone having an active income is not getting rich no matter how big he thinks his salary is. No matter how hard he works, he is always beaten by his limits and there is always a ceiling in the amount of money he can earn on a particular period of time. An active-income earner starts his career alone and gets old alone. An active-icome earner does not mutiply himself and he never has any real financial security. When an employee is fired from his job, he only gets a one time separation fee and that's all. Everything that he accomplished or built for the company for several years will never give him any penny in the next days after he is terminated. This is because he does not own those things he has done for the company and therefore those are not transferrable to him.
So what can we learn from an active-income earner?..Ownership..This is the most important concept that a person who wants to get rich should undertand. Power is nothing but ownership. Who were the rich during the feudal times? The landlords who made sure that their ownership of lands are justified. Who are the rich in our time? The capitalist who owns the business establishments. In order to get rich, you have to make sure if possible that you own everything you accomplished or built today and that everything you built today can earn you money in the future with less or without your pesence. By doing this you are slowly but surely building your money-making machine. This is called the passive income stream . The important key terms hers are "passive" and "stream". Passive means that you earn money even if you dont work on it for a long period of time. Stream means that money simply flows like a water in a river. However, a single income stream is not enough. You have to make build multiple passive income stream. When one of your income stream stops you another one to support you. Examples of passive income streams are real estate rental, royalties from books and music, websites and blogs, and computer softwares.
