A lot of people seem to mix passive income with residual income. That's because there is a thin line that divides the passive income from the residual income. Residual income is something that you generate from something you have done in the past and no longer have to work on it. For instance, when you receive pension or retirement funds when you retire, it is residual income.
Passive Income Vs. Residual Income
- Thread starter nomad
- Start date
Passive income is that money that one earn
continuously from the investments or business that you started a long time ago while residual income is the money people earn for once or in sections from the work they did a long time ago.
continuously from the investments or business that you started a long time ago while residual income is the money people earn for once or in sections from the work they did a long time ago.
I think everyone would love to pick passive income because it's a way to generate money even while you're sleeping.
You can make money while sleeping as a passive income idea.
There is a need to involve a lot of activities before you can start up a passive income source.
You cannot start to make passive income on a platter of gold, you must have put in a lot of effort before you will make money through this medium.
It is not exactly the same, generally passive income is obtained when you have put money into an investment and it is generating passive income thanks to the fact that it is producing something and generates frequent returns, residual income is, as you say, from previous work and that you receive years later like retirement
As you say residual income is like that which one gets from the work they have done in the past already as in pension after retirement while passive income is more of an income that one gets from engaging in little things that are not their main jobs but at times some people turn their supposed passive income tasks more serious than the main job as it last even better.
From what you are saying now, that means side hustles are passive income. I thought passive income are income streams that don't need your participation.
As it stands, how can we online workers build residual income. Since we don't have retirement benefits. It seems we should just focus on building passive income sources.
Well in my country you could simply take out retirement insurance and contribute an amount to the fund monthly to ensure a retirement that does not come from the state, I think that's a solution.
- Thread starter
- #20
True. sadly, a lot of people mistake residual income with passive income. While you earn passive income without any on going work, you will be earning residual income through the work you have done for a long time in the past, pension for example.