When you earn money without your active participation in a business called passive income.
There are two type of income based on your involvement:
- Active Income
- Passive income
Active Income
Active income happens when you actively involve any business and earn money from that business. Like, when you work in a business as an employee and get monthly or any periodic salary. Another kind of active income is when you start a business and work as CEO or Chairman of that business. your earning from that business will be active income.
Passive Income
Passive income happens when you earn money without your active participation in the business. Usually if you invest in a business but do not involve yourself actively in that business, your earning from that business is called passive income. Othar than that if you build anything and earn money from that on regular basis without your active participation is also called passive income. For example if you build a house and give it to any party to rent and manage the house, you earning from that house is passive income.
In the online world there are couple of way of passive income. If once you build an website with some good content and allow other to sponsore your content or run ad in your website, that earning will also be considered as passive income. You can also earn by affiliate marketing, youtube video etc.
Do not be misguided by juicy promotion to earn x number of dollar as passive income. Be wise to evaluate any promotion before any investment. You can write in the comment area if you have any question.
