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As humans the one thing that we all desire, is to be in a position where you don’t have to worry about anything financial.
Whether it is education for our children or good health care for our elderly, everything in this world somewhat revolves around money. So it is natural to be apprehensive where there’s lack of cash flow in any household.
Hence we have been conditioned from birth to seek a stable job, by means of going to school in the hope of a lucrative financial reward. While there’s nothing wrong with a job, it is the very cause why we inadvertently set boundaries and limits to what we can really achieve in life.
It is a typical human inclination to be conceited when we have a job, therefore putting us in a vicious cycle of constantly working for a little bit more pay. Income derived by such means is called ACTIVE INCOME.
Active income means you are trading time for money. In many cases, the money is spent before it is earned because it has to be earned first before it is paid out to you. This is the least effective way to be free financially. But if you have strategy in place to use your active income to build a leverage of steady cash flow, where you don’t have to be a slave to your job, chances are you are on the correct path to financial freedom.
The cash flow that you don’t have to physically trade time for is called PASSIVE INCOME. This method of generating income is a guaranteed road to real material success when done correctly, because of the benefits and advantage associated with it.
Active earners pay the most tax with little to no means of write offs or deductible. Passive earners pay little to no tax legally and can deduct almost anything “business related”.
You almost cannot build wealth with active income because, your time and directives are bought and controlled by another entity for a fee. Passive income means you have bought your time by making your money work for you.
Active income wears you down after awhile, working until you are 67 with very little money to show in form of pension, that you are too tired to enjoy. Passive income is the opposite and allow you to retire when you feel like it.