I’d thought I would start this blog with one of my favorite forms of income. As some of you may already know passive income is income that you receive without continuing to put in effort. In other words you earn passive income while your driving in your car, while your hanging out with friends and even while you sleep. This is the 7-11 of income, it is open all day everyday.

You might be thinking that you already have passive income, and you might be right, however investment vehicles like stocks, bonds, funds and interest don’t count These count as Portfolio Income, which we’ll talk about another time.

So what is an example of passive income you might be wondering. One of the most well known examples is real estate. Owning an investment property may not seem like its earning money 24/7, but it theoretically is. The tenants pay for use of the property for a given month, so you are earning it all month you just only see the money at the end of the month. Since you aren’t actively involved in the investment (at least I hope your not) the income earned is passive.

Now that we know what passive income is and one way of earning it, its about time we figured out why it is so good. Passive income allows us to free up our time, so we can spend it doing whatever we want. If you managed to build up enough passive income, that it was equal to the amount of money you need to live comfortably you could quit your job! People may tell you that money cannot buy time, but that essentially what passive income does, it frees up your future time. And who doesn’t enjoy more spare time?

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Filed under: Passive Income, Portfolio Income, Real Estate