💰 Passive vs Active Income | key differences

Passive vs Active Income | key differences. At Invest My Buck, No matter how you make an income, the money you make will fall into two categories: passive income, or active income. And while you may have heard these two terms in the past, many people don’t quite understand the difference. So, without getting much further into this post, I want to answer the obvious question: what’s the difference between passive income and active income?
Passive income is money earned on an investment, or work completed in the past, that continues to make money without any additional effort. Active income, on the other hand, is money earned in exchange for performing a service. For example, hourly wages, salaries, commissions and tips, are all examples of active income.
So, which form of income is better? Well, we have a lot to cover before I can answer that.
In this guide, I’m going to take a deep dive into active and passive income. My goal for this article is to not only help you understand the difference between these two forms of income, but to also equip you with a few examples that you can incorporate into your own financial life.
So, if you’re ready, let’s get started!
Passive Income (Explained)
I have heard passive income called the holy grail of income streams, and it’s pretty easy to understand why. I mean, think about it. If someone told you that you could put in some upfront effort into something that will generate income for years, or even decades to come, would you honestly say no to that? Well that is the idea behind passive income.
If you are willing to put in the work early on, passive income could sustain your lifestyle for a really long time. The good news is that these days, there are all sorts of ways to generate passive income.
Though, I think it’s important to preface this section with one very important statement: passive income still requires work. In fact, oftentimes, the upfront work required to generate passive income can take years. But, if you focus your effort on something that will eventually generate money while you sleep, then the juice may be worth the squeeze.
So, what are some ways you can make passive income? Well, that’s exactly what I’m about to cover.

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