Nov 20 2008
Defining Passive Income
There are many different definitions of passive income. My definition of passive income is income that you do not have to do any additional work to receive. Thus dividends and interest would count as passive income. I had to work to earn the money I invested that is now paying dividends or interest but I don’t have to do any more work to continue earning the dividends or interest.
Sometimes it can be unclear whether income is passive or not. A good example is blogging. I definitely have to work to make money from my blogs which makes the income earned from them not passive income. On the other hand if I stopped blogging today my blogs would still earn ad revenue for quite a while just at a diminished rate. This makes blogging income a mixture of active and passive income.
I’d prefer to make all of my income from passive income but I’m a long way from that goal. For now I won’t be worrying about whether income is active or passive I’ll just be focusing on ways to make extra money.
Now that I have clarified my definitions of passive income and alternative income I will start posting tomorrow with ways to make extra money.
