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The Biggest Difference Between Passive Income vs Active Income

There is one huge difference between passive income and active income, and you really should care, because it affects your entire life. The big difference, is your time. And your time is your life.

Passive Income vs Active Income [Your Time]

What is passive income vs active income? Passive income is a steady stream of revenue that does not require active maintenance. Passive income may take an important time or financial investment to setup, however, it can provide non-active income for years. Active income requires physical presence and time in order to produce revenue.

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A good example of active income is a 9-5 job. You have to wake up in the morning, go to work, and complete tasks throughout the day for your boss and colleagues. If you are sick one day, you may not get paid. Want to go on vacation? You will have to ask your boss, and may not get paid. Took the weekend off? You won’t get paid.

Passive income can provide you income at any time of the day. If you put in the initial time and effort to build a passive income stream, it will bring you with income while you are playing with your kids, taking the day off, on vacation or even sleeping. Sick today? You will still make money. Want to take the week off? You will still make money.

Meh, Passive Income is a Utopian Idea

Wrong. Warren Buffet spent years studying stocks and is still making passive income from some of his initial investments. Mark Zuckerberg spent months and years building Facebook up from nothing, and is still making passive income from his business. JK Rowling wrote multiple books that have been providing her passive income for many years now. PewdiePie has is still making passive income from the very first YouTube videos he made 8 years ago.

I’m Not a Rich Person. Can I Also Make Passive Income?

The examples above may seem untouchable to you. We did name some of the richest people in the world. Well, they are still all people like us. Warren Buffet was once a young schoolboy with a passion for business. Mark Zuckerberg was a University student with a great idea. JK Rowling was a mom living on welfare. Nobody knew who PewdiePie was before he created the most popular channel on YouTube.

But there is something in common for each of these individuals. Execution. They didn’t just have the idea and the will to do it. They actually did it. They put in hours, and days, and years of hard work to build their passive income streams. But now, they have passive income flowing to them at all times of day and night. You too can make passive income. There are hundreds of ways you can do so. Sign up to our newsletter to receive 100+ ideas to make passive income.

I Can’t Quit My 9-5. How Can I Make Passive Income?

This entire website is dedicated to ways to make passive income. It’s especially geared towards beginners, so if you are looking for ways to get started, check out our home-page that contains a breakdown of what you can find on the site. We don’t just provide you with ideas, we actually detail steps on how to turn your work into passive income. You could also sign up to our newsletter to receive 100+ ideas on how to make passive income.

You do not have to quit your 9-5 to start making passive income. One way to do this is to also work a 5-9 when you get home. That second shift is for you. When you get home from work, you can start on building a new passive income source to complement your current salary, and eventually replace it. You may not have time to do so. 

Do I Have to “Invest Money to Make Money”?

You can invest money to make money, but you don’t have to. Some investments require money and time, but some can be created with only time, effort and dedication. However, we would like to insist on something here… There are ways you can use your time efficiently, or completely inefficiently.

I have an excellent example of this. I was sitting on my balcony one day, watching my neighbour pickup leaves. I lived in an apartment building and he helped out around the place to reduce his rent by trading his time for money with the landlord.

My neighbour was picking up leaves. And he was doing it, one by one. The process was very, very slow. He would walk to one end of the yard, pick up a leaf, walk to the other end of the yard, and drop it in the compost. Visibly his goal was to stretch out how long the task was taking him to justify an hour of work. Had he picked up the rake in the shed, it would have taken all of 10 minutes.

Don’t be like my neighbour when you are working for yourself. If you are working on any passive income source, dedicate yourself to your work and get it done efficiently. Use the right tools you need to save time and money. You will be cheating yourself and wasting your time otherwise.

How Long Does it Take to Make Passive Income?

I like to compare making passive income to the “Startup Dream.” Everyone likes to talk about Jeff Besos working in his garage, and then poof! The eCommerce empire Amazon appeared. We never like to talk about the years of grueling work he put in, between the photo of him in his garage and his now billion dollar empire.

Building a passive income source will take you time. That time depends on a couple factors including your motivation, dedication, execution, mindset and personal investment in building your dream. How long it takes will also depend on how passive, expensive, difficult, time consuming, risky, seasonal and scalable the passive income source you are building is.

The content on this site, Beginners Passive Income, is dedicated to helping motivate you and provide you with ideas, guides and ways to be more efficient in building passive income. However, only you can execute and get the job done. You have the choice of being like my neighbour and picking up the leaves one by one, or grabbing a rake and getting the job done efficiently.

Related Questions

Here are a couple other questions related to the differences between passive income vs active income.

Is Passive Income Taxed Differently from Active Income?

We know this is a question that is often asked. Therefore, we are working on an answer to provide you more information related to taxes and passive income vs. non-passive income. Sign up to our newsletter to know when the information is available.

Can Passive Income Make me Rich?

To become rich from passive income, you will need to execute the right tasks over a certain period of time, while remaining motivated and dedicated to building your dream. The more passive, inexpensive, low risk, non-seasonal and scalable, the more income you can expect from your passive income source. And of course, you need to know what “rich” means to you.

We wrote a detailed article on the ways passive income can make your rich, check it out here.

Beginners Passive Income

It takes time, effort, perseverance, motivation and skill to build profitable, sustainable passive income streams. We hope to inspire you and provide you excellent passive income ideas along your journey to financial independence.

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