Passive vs Active Income: Are You Working For the Wrong Income?

construction-workerAs children, we are often taught by our parents to do well in school, go to college and get a good job to succeed financially in life? We have all heard that being active and hard work will make us healthy and wealthy. But being an active participant isn’t always good for your financial health.

Think about it – Do you want to work 40+ hours a week for the rest of your working life? Chances are you have spent most of your working life working for the wrong kind of income. I’m talking about Passive vs. Active income, and which is right for you.

Active Income

This is the kind of income most people are working for, unless they were born into wealth or won the lottery. This i


[Continue Reading at]

This entry was posted in Investing, Making Money, Personal Finance, Retirement, Work and tagged , , , , , . Bookmark the permalink.

8 Responses to Passive vs Active Income: Are You Working For the Wrong Income?

  1. A Marino says:

    Another advantage of having passive income is that you don’t pay Social Security taxes and Medicare taxes on it. You want to pay the least taxes that you can.

    Although real estate is considered passive income, I wouldn’t say that it is free of work. Being a landlord isn’t an easy job. It requires you to make sure rent is collected. You may also be woken up in the middle of the night for an emergency. When you are on vacation, you have to leave an emergency number for the tenants. Then, you also may have to go through the trouble of evicting tenants for non payment.

  2. Scanner says:

    “Another advantage of having passive income is that you don

  3. Pingback: Roundup and Link Love - Labor Day 2008 Edition | The Wisdom Journal

  4. xinecho says:

    Oh, I wonder when can I attain a passive income. I am looking forward to it.

  5. A Marino says:

    Scanner: When you have net income from rental property, you pay withholding not social security or medicare. You pay social sec and medicare when you are actively running the property as your main job. My accountant might disagree with you about that.

    You don’t pay social security on interest on your CD’s, savings, etc.

  6. Alan says:

    Another means is through residual income, where your income either remains the same or increases when you stop working (active income) and retire (start withrdrawing income). This is something I am working on now and helping others.

  7. DivineMercy says:

    Another eye opener for securing the future! Working 40+ hrs a week doesn’t really guarantee a good retirement. Good article.

Leave a Reply

Your email address will not be published. Required fields are marked *