Friday, July 13, 2012

Is passive income worth the effort?

You may have heard from several financial experts that we should be creating passive income stream. We thought it would be worthwhile figuring out if its a cliche or something of real value. Lets start with basics first.

What is Passive Income?
Passive income is an income that can be maintained with little effort.

Passive Income compared to a job?
A job is something where you get paid till you spend time. A job is based on the concept that you are an expense for your employer and you are leveraged by your employer to make profit for himself while minimizing your salary! You may rightfully argue that when you are part of the senior management, you are no longer an expense for the employer as you are leveraging the time of other employees and potentially making larger bonuses! This may be partially correct but here is what I have to say to that, you still have to to spend 40 or more hours a week to leverage other's time!
If you do not do that, you do not get anything...  while passive income keeps on multiplying provided you are taking all the right steps, and at one point in time the money you make overtakes the time you spend and then you have truly generated something of real significance as you will get money even when you are sleeping

happy family
I don't think I can put a dollar amount to that kind of freedom. Your thoughts?
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