Passive income is income from money that is not obtained through active physical or mental activity. Rather, it is a question of income that flows by itself in addition to the main activity. The generation of passive income is particularly well represented in the online business market.
In general, the term is associated with a way of “earning money in your sleep”, as the income flows into it by itself. At the beginning, however, there is a considerable amount of planning that should not be underestimated. Basically, a distinction is made between two types of passive income, portfolio income and external passive income.
Portfolio income
With the portfolio income, a certain amount of money is initially invested and you then participate in the profit development. An example of this is stocks. With the portfolio income, you therefore need a certain amount of start-up capital.
External passive income
In contrast to the portfolio income, you do not necessarily need a certain amount of start-up capital for the external passive income. With the external passive income, the focus is more on the amount of work. One example is writing an e-book. The workload is significantly higher, but little or no investment is required.
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Gendernote: I have used the masculine form for ease of reading. Therefore, unless an explicit distinction is made, it always refers to women, diverse as well as men, and people of all origins and nations. Read more
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