For many people, their current salaried job is their only source of income or the rice bowl even though they don’t like the job, the company they work for, the job title, the work environment, and also the type of business the company does. This is because they have burdened themselves with all kinds of commitments and they feel they could not move out because of the risk of losing income. Despite having many commitments, many people venture into the second source of income without realizing what they do is either passive income or income from investments. Eventually, these sources of income replace the income from their salaried job and build a better lifestyle.
Which is better passive or investment income or whether both the same or different? We will look at both separately.
What is passive income?
Passive income is a term that is used to describe income that comes from sources other than the primary job. Passive income can be generated from many sources and it doesn’t have to be a traditional nine-to-five job. Some passive income ideas are as follows:
- Blogging
- Affiliate marketing
- Drop-shipping
- Royalties on intellectual properties
- Income from rental properties
- Creating and selling digital products
- Buying and selling domain names
- Photo and music licensing
- Creating and selling e-books
- Creating podcast
- Creating and selling online courses
- Buying shares, options, bonds, mutual funds, etc.
How to create a passive income that supports you in life?
The best way to make passive income is to create a business that is scalable and can grow without you. The first step in creating passive income is to pick a business model. There are many options out there, but for this example, let’s say you want to start a blog about cooking.
You will need to decide how much time and money you are willing to invest upfront, how much time the business will take up each day and what the return on investment will be in terms of profit per hour of work. Once you have decided on this, it’s time to do some research. Find out how many people are already blogging about cooking and find out which ones generate the most traffic or revenue. This will tell you if your idea has potential. Once you know that your blog has a good chance of being successful, it’s time to create it.
The best way to do this is by creating a content plan and choosing the perfect domain name. For your blog, you will need content ideas, recipes, and pictures. Once you have all of these things ready to go, head over to WordPress services.
What is investment income?
Investment income is simply income that comes from investments which include dividends from stocks, bond interest, and income from a property in the form of rental. It’s important to remember that income from investment income is not the same as your regular paycheck. It’s not guaranteed, and it can go up or down over time. However, if you are disciplined about saving and investment, investment income can be a great way to help you reach your financial goals. There are a few things to keep in mind as follows if you are looking to generate investment income:
- Strategy
- Goals
- looking for capital gain or generating income?
- The acceptance level of risk
The above will help you make the right decision on the type of investment. Once you have decided what you’re looking to accomplish, it’s time to start deciding where to invest.
How to Create Investment Income that Supports You in Life?
There are a few things you can do to create investment income that supports you in retirement. One option is to purchase a property that you can rent out. This will provide you with a steady income stream, as well as the potential for appreciation over time.
You have a lot of investment options including investing in stocks or mutual funds. This can provide you with the potential for capital gains, as well as income from dividends. You can also consider investing in bonds. This can provide you with a fixed income stream, as well as principal protection. Finally, investing in the options market is where you can make money when the market is in an uptrend, downtrend, and also sideways. Each of these options has its own set of risks and rewards, so it’s important to carefully consider your goals and risk tolerance before making any decisions.
However, by diversifying your investments, you can create a retirement income plan that fits your needs and provide you with the peace of mind you need to enjoy your golden years.
Conclusion
We have discussed at length what is passive income and investment income and noted that shares, bonds, mutual funds, options market, and property investment were discussed under the topics of passive and investment income. Is this mean passive and investment income are the same? Passive income includes all sources except active income i.e. income thru a salaried job. That means investment is also considered a part of passive income.
