Is Passive Income Important?

June 23, 2022

Before I start my discussion, let me define first if what does it mean when we say PASSIVE INCOME.

Passive Income - is an inflow money in which we did not made so much effort to earn it. It is one way of letting our money work for us. The beauty of this kind of earning system is, it requires us just a little effort to make money. A passive income's goal is earning money even while we are sleeping.

Some ordinary people will find it somehow unrealistic and may even doubt like as if they do not know that this scenarios do exist.

What are the sources of passive income?

There are lots of way in which we can earn money just by doing nothing.

Here are some:

1. Bonds

Investing in financial instruments such as bonds will let you earn money.

Financial Instruments such as bonds, protect our initial investment and may offer good interest rates.

2. Investing in Stocks

Investing stocks may not always guarante you to make earnings. There maybe profits but it is not 100% guaranted.

In trading, there is also good timing. Do not just buy and sell all you want to do. If you really want to have this kind of passive income, first you must simply educate yousrself in this kind of passive income.

It may take sometime for you to fully understand the process of trading but when you finally understood, it will be a great help in achieving your financial goals.

Investing in stocks does not mean you need to trade everyday since trading everyday is considered active income.

Trading will only be classified as passive income when you bought stocks and hold it for a long period of time because you believe that in the future, the value will go up.

3.Business

Putting up a business and hiring people to work for you is another kind of passive income. You are earning because your people works for you.

But putting up a business may result to loss or profit. That is why before you put up a business, make sure that it will become profitable and your costumers will love your products.

Make sure that the products that you are going to sell in your business is really that something worth purchasing for. The progress of the business really depends on the product and the service so make sure to hire someone with good morals and right conduct.

4.Copy Trading

If trading is classified as active income, copy trading is the opposite.

Copy traders will only deposit money in their account then do some process and then copy a trader whom they think is really with a good trading trends.

I guess there are a lot of platform that allows us to copy a trader. But when copying a trader, we must be really careful in choosing one because their are only two options that will happen to you in the end, it is a battle between gaining or losing.

It is better to copy a trader whom you really know or somewhat you have communication with. It is of great opportunities if you know that person personally because you know your money will really gain.

I, myself have a passive income and it falls under copy trading. I do not know personally the trader I am copying but the one who invited me in the platform knows him and we also have a group chat in messenger in which he keeps us updated. And his trades are really with good outcome. The trader always tells us that we just have to keep calm whenever the open trades are not yet profitable. He will not close a trade if it is not yet profitable.

Why is passive income important?

We do not always know what will happen to us in the future. We are not healthy everyday. If we got sick, there are instances wherein we can not manage to go to work. And if your job is your only source of income then during those times you have no salary. And if we got sick, sometimes we need not just one day but 2 to 3 days to finish it.

We should not always rely on our earnings in our job. Imagine a table with only one feet on the center and a table with four feet. Let the feet be the source of our income, if the table with only one feet got destroy, what will happen?, There will be no longer support and everything will breakdown. But if we have different sources of income, in a four- legged table, if one was destroy, the table did not collapse totally because there are still three feet holding it. Just like our money, if for example we lost our job but good thing is we have investments or business then we are still capable of buying necessities for our living.

What I am trying to say is, if you have seen opportunites to earn, grab it. Our earnings in our job maybe capable of getting what we need but it is beyond okay if we have other sources of income.

If there are still some things you know which is an example of passive income, feel free to comment below.