Everyone agrees that the generation of passive income is often one of the fastest and easiest way to achieving financial freedom and requires little, or no effort.
Yet, what I tend to find is that a lot of people often confuse side hustles with passive income. Now, if you're taking this approach, I want you to know now that this approach is absolutely wrong.
Not only will this approach actually lead you down the route of fatigue and burnout because you are not identifying the right thing to lead you to where you want to go i.e. Financial freedom, but also you will simply just end up quitting in total you will quit that goal and that dream of working towards financial independence and financial freedom the face behind the money bag I'm going to be sharing a lot of key tips.
So, first, foremost let's start by defining exactly what passive income is so the dictionary definition of passive income is that, "Passive income is money earned with minimal activity through any venture that requires little daily effort or upkeep on the individual's part or simply put money earned whilst you're sleeping".
Now, the golden rule of passive income is that it should actually protect your time. So, if you're finding that you are to put an increasing amount of time towards that venture in return for either the same or much likely even minimal amount of return in terms of money earned then that venture is not passive that venture is very much an active source of income i.e. It might be a side hustle, or it might be something else, but it definitely isn't passive income.
The key thing to remember here is that there are lots of ways in which you can generate income, but not all of them are passive. If the first thing passive income isn't is your job so your nine to five is not a form of passive income, it's not a form of passive income, because you're consistently required to exchange your time in return for the money you earn from working that nine to five. So, your nine to five is not an example of passive income, essentially you cannot quit your job and still be getting money through your job. If your job was a form of passive income, you would get to a position where essentially you would be able to quit your job and still be getting money from that income source. So, I hope I've cleared up that bit. The next thing that isn't a form of passive income is side hustle. A lot of people make this mistake your side hustle is not a form of income because again you are consistently having to put in some effort into actually generating that money.
So, for instance if you find that you work as a freelance photographer, and you regularly have to take pictures at different celebrations that is not a form of passive income, that is a side hustle. If you're someone who bakes cakes for celebrations, and you know you're into maybe arts and crafts and things like that these are just examples again that is not a form of passive income that is a side hustle because essentially if you don't bake a cake you're not gonna get any money. So, I hope that I've given you two different examples of what would be classed as a side hustle and why more importantly they are not passive income sources.
The third part that a lot of people tend to mistake as a passive income source is consultant. Consultant is actually not a form of passive income. I understand why a lot of people would generally tend to make this mistake, but I can assure you that consulting is actually not a form of passive income why because again as a consultant being a consultant you're not having protected time.
If I worked as say maybe a consultant GP for instance, as long as I'm not seeing patients and working with those patients I'm not gonna get paid. So, even though as a consultant I would typically be generating a much higher pay per hour or per day, that doesn't mean that that venture is a passive income for something like consulting to actually be passive. You would have to get to a point where you're able to actually view that consultancy practice to a point where you can leave it to other people to run it on your behalf, effectively meaning you can then take a step back from that business and not have to actively be involved in the activities of the business but simply just earning the return on a monthly or yearly basis but essentially. It means that at that point, you are no longer required to exchange your time in return for that money that you are getting from that consultancy practice.
So, basically, Active gives up a portion of your time in order to make money.
And passive income earned as a result of effort done in the past without additional time spend.
very informative
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