Active and Passive Income – Which Is Worth More

8 comments

I know I’ve been going on a lot about the importance of having assets that make money and create wealth for you, without you having to be involved in the value exchange – the earning money bit. This is what is called PASSIVE INCOME. 

I’m banging on about this, because I still see so many people believing they should focus their energy on increasing their active income, believing this will solve their money problems, at the expense of creating wealth generating assets.

This video explains the difference between Passive and Active income and why you should be waking up each day excited to create assets that earn money for you rather than thinking how you can earn more.

Watch the video now…

 

Now that you’ve watched the video I thought I’d add a bit more juice to the argument – not only is having passively generated income the only way you will ever be able to free yourself from the rat race BUT…

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As you now know, active income involves you in some way and because of that it has a whole bunch of costs associated with it.

Us humans are “heavy on petrol” as they say! Let me show you why.

When you earn income actively there are a whole bunch of direct costs like travel to get to the place you earn the money, food, clothing, make-up, and you pay taxes on this income too.

There are indirect costs too with earned income. For example you may have to live in a certain place to be near employment, when given the choice you could live in a far less expensive (and probably more pleasant) home and environment if you didn’t have to earn this money.  This is before we have even added in the cost of your time, the lost opportunity to be doing the things you actually want to do ,and to get more value from your life because you have to use this time to earn money. And what about the stress?

So you get it – active income comes with a whole bunch of costs which eat away at the amount you actually get to use.

Now to our much loved passive income. No special hair care product and perfume, no gluten free lunches, and Hawaiian massages needed to get rid of the stress. No transport costs, no holidays, no food, no housing, no clothes…

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 The best is still to come…

When you have a whole ocean of passive income created by multiple streams flowing in, you can live anywhere you please! You are no longer tied to one particular place because that’s where you need to be to earn money.

Where would you live if you could live absolutely anywhere?  How much could you reduce your cost of living if you moved somewhere else? Would that lower your Financial Freedom number

Would you have a number of places to live. Would you be in the mountains in the summer and on the beaches in the winter? Or visa versa if skiing and sun burn are your thing.

Perhaps you’d choose not to have a home at all and just hop from one cruise ship to another.

The point is…

Sure there are some costs associated with some passive income as some still attracts taxes, but these are significantly less than the heavy cost burden loaded onto active income.

I hope this has gotten you thinking and falling in love with passive income even more.

In the comments below I would love to know…

What would you do with the freedom passive income gives you? Would you choose to continue living where you currently live or do something completely different?

 Remember to share as much detail as possible as thousands of Wealth Chef’s in the making come here each week for juicy wealth snacks, insight and inspiration as they create their juicy financially free lives too. Your ideas and shares may trigger someone to have a big breakthrough.

Thanks as always for reading, watching and sharing so generously and for choosing to master this key ingredient money and live your un-limited life.

Big love

TWC_Ann_Signature_spaced

 

 

 

 

 

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8 Comments

  • Mbongeno says:

    Thank you for this Video Ann, you shared so much valuable information. At the moment I am investing in Assets in the digital/Cryptocurrency space and because they have not reached the Critical Mass I would like them to in order for me to start earning my target Income from them, I will continue compounding my earnings at the moment, but I really look forward to the day I will be able withdraw from the Assets waaaay more than I do in my current job

  • Valda says:

    Amazing teaching, life changing. Thank you Ann, I feel so liberated. This will be my mission to unlock the mystery regarding financial freedom. Valda van Heerden née Wilson. East London, SA

  • Ruth says:

    At the moment I have 2 flats for rental also shares with Satrix Wish to accumulate more properties

  • Debs says:

    Thankyou Ann, so very much, for teaching so clearly around the mystery of money. I really had no idea – until I met you – what went on behind the scenes of money savvy lives. I’m about to start a passive income business with my book, Menopause Magic, that’s all ready to go! Since I met you, I have started investing in trackers, found a property investment partner and got busy on my journey to financial feeedom. All that from a – starting point, as my consumer debt is now nearly gone too. Once I get to FF II will be moving around Europe, focussing on living in Italy, France and Spain where I’ll be absorbing the language and Tango! I’ll have a village home in England, be helping perimenopausal women in a big, juicy way, and having tons of fun with my horse, and my writing x

  • Zakhele says:

    Thank you, very informative.

  • Suse says:

    Not being tied to one location is big for me. I love to live in new places and experience different cultures. I would love to the freedoms of being mobile like that. To be able to travel more but also relocate without the additional pressure of finding a new job etc.

  • Marnita says:

    Yes! Passive income is what it is all about!
    I have a network marketing business which is bringing in monthly income and it is such fun and life changing for me and my clients.
    I’m an affiliate for some amazing coaches.
    I want to write ebooks and a book
    Eventually property.

  • Malathie says:

    Thank you. Thank you. Thank you.

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