The difference between active and passive income

October 10, 2008 · Filed Under peso makin'

You see a lot of people that are talking about passive income on their blogs. You see a lot of people that do those monthly income reports where they list “passive income” as one of their earners. If you pay attention to those sites you will notice something. Some people make a ton of passive income and some don’t. If you dig a little deeper you will notice that some of those big earners are including active income in their passive income column. But you don’t hear people talking about active income.There is a difference between passive income and active income. Active income is when you are constantly working to create income. For instance, having a blog that you update regularly that brings in money is technically active income. Getting paid to evaluate products on your blog is one-time active income. In its simplest form that is what active income is - you do something one time and you get income one time and there is no opportunity for recurring income from that activity.Passive income is the opposite. Passive income is when you earn income on something over and over that you only had to actively work on once. Passive income is income that tends to be recurring and requires no additional work after the initial output. Blog posts that have some adsense in them that get a lot of traffic is a great source of passive income if you get a lot of traffic and click throughs. Another great example of a passive income earner is an affiliate program. You throw the link up once and people click on it and you earn money until you take it down or until they end their subscription to the affiliate product.

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