How to get rich... Part 2: Passive vs. active income

I’ve read an article not to long ago from Steve Paullina’s website.
And it reminded me of something I hadn’t thought of for a long time.
The terms passive and active incomes.

The idea with this article is to make you realize that there other ways to make an income, than trading you working force for money.

Let’s take a look at the two terms:

Active income is when you are doing a task and then get paid once.
Passive income, is when you doing a task and then get paid again and again.

Artists have a passive income. Take a musician for example.
He will work hard in a period without getting paid, to make an album.
When it’s finished, he will be paid, for as long as his album sell.
Take the Beatles for instance, the survivors still receive a pay check once in a while, for music they created decades ago.

Say you have a bakery.
You bake a cake. Sell it for $5.
You hire another baker, to bake the same cake. But you’ll only pay him $3 to bake it.
Now you made yourself $2. Say you hire ten bakers. They bake $10 cakes, and you’ll make $20.
This is passive income. Sure in this particular case, there are other expenses such as electricity, rent, taxes and so forth. But you get the idea right…

Another example would be, to make a website. Say 1% the visitors, would click a banner ad.
And, just for the example, you’ll get $1 for each banner click.
If you had 100 visitors each day, then you would make $1 each day. This is also passive income.

Basically what you have to do is to somehow copy this idea, and make it your own.
I assume that you are not a worldwide known artist, and that you are somehow interested in blogging and internet, and since you are taking the time to read this, I also assume that you are interested in passive income.

Adsense:

Now you are familiar with the term passive income, if you want to take this further, please notice AdSense box in the sidebar, on the top of that box, is a link “adds by Google.”, please click there, and you will be redirected to a website telling you everything you need to know, about getting the most out of your blog.

If you enjoyed this article, please leave a comment and check the Google links in the sidebar, and see if something looks interesting.

And most importantly have fun…