Active and passive income
Both of these types of earnings allow you to earn a certain profit. However, they have significant differences. Below we have compar , active and passive income to show you the difference between them.
Active income Passive income
Making a profit
Money is receiv , by an employee, a worker, a specialist for performing a certain job. Profit ceases after the end of work activity.
Profit comes regardless of whether you work , this month or not.
Availability of assets
Earning money occurs without relying on existing resources (capital, assets).
To make a profit, you ne , to have assets or start-up capital.
Time costs
It takes a lot of time. To get it, you ne , to do a certain job (or even several).
Does not require a lot of time.
Risks
There is a higher risk of being left without a livelihood than with passive income.
By investing in several bosnia and herzegovina phone number library projects, you provide yourself with continuous income. Even if one project fails, you will not be left without money.
Financial stability
Most often it does not allow one to have financial stability.
Types of passive income
Passive income comes in different forms, each of which is discuss , below.
Intellectual. Profit from this type of income comes from a previously creat , intellectual product: a book, invention, video, song, etc. The author subsequently receives interest and royalties for copies sold, as well as for a patent.
Marketing. Income is generat , bas for many newbies a store , on the creat , marketing network, personal website or own brand. Thus, such an asset provides you with a profit of a certain amount every month.
Investment (financial) . To create this type of passive income, you ne , to have start-up capital. In the future, these funds ne , to european leads be invest , in securities, real estate or shares. After that, you will receive certain interest and dividends from the investments made.
Legal. Many citizens have this type of income by law. It includes pension and social payments, as well as financial assistance. But to receive these payments, you must have legal rights to them and draw up the appropriate documents.