What Is Passive Income?

Passive income is exactly what it sounds like: Money that comes in whether you’re actively working or not. It may sound strange at first, but it really does make a lot of sense. There are two main ways to make passive income:

1. Investments working for you

The first major type of passive income is an idea most of us are familiar with already: investments. These investments generally create monthly income with a fixed or standard rate of return attached to them. This would include vehicles like the stock market and government bonds, rental property income, Mutual Funds, UITFs, etc.

2. Businesses working for you

The second type of passive income is the one that’s harder for most people to wrap their heads around: passive business income. Many people assume that running a business means you need to be constantly working in order to achieve any real success. But that’s actually not true at all. Instead, what you need to do is create a business that has the potential to be systemized so that it can work without you. That way, rain or shine, money will continue to flow in whether you’re putting in the hours or not.

Let's focus on building passive income streams!

Let's Prosper Together,

Lorenzo Leonardo, AFP®