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The Importance of Passive Income


Passive income refers to any money that comes your way without having to put any effort into acquiring it. The opposite of passive income is called active income, which is typically a job that you need to put in the time to earn money physically.

Examples of passive income include dividends from stocks, royalties from an artistic undertaking, rental income, and book royalties. Passive income comes your way when you’re idling, but you may need to make an investment first. And https://www.spaceshipinvest.com.au/ is a good place to start learning about investing for passive income.

A good example is a clerk working a 9 to 5 office desk job where he receives a fixed weekly salary. It turns out the same clerk is a recording artist and receives income from a recording he released two years ago.

While the desk job requires direct effort to receive the agreed weekly salary, the recording contract is different. Regardless of the going-ons in the office, the clerk never has to leave his office desk to perform a live act to get paid.

Why is Passive Income Important?

Many people earning an active income would love to find ways to make a passive income, and many articles have been written exploring different ways to generate a passive income. However, many writers fail to answer the most pertinent question – Why is passive income important?

The solution can be explained by how people spend their time, as opposed to money. Everyone has twenty-four hours in a day. So, time becomes an equalizer. Since it comes and goes, it can only be utilized once, and then it’s gone. It cannot be re-used or re-invented. This alone makes passive income important.

Unlike cash, which can be printed, spent, invested, and lost, it’s not possible to hoard minutes in a room. So time is of utmost importance.

 It’s Hard To Create a Passive Income

The problem in generating a passive income is one of the most challenging undertakings. It takes enormous investment and effort with very meager returns in the initial stages. The learning curve can be so frustrating it makes you want to pack up and leave. But remains one of the most lucrative undertakings one can embark on.

Foundation of Wealth and Happiness

Just the same way the 24 hours mentioned above offer different income opportunities to different people, it’s the same way passive income creates foundations of opportunity and bliss to those lucky few.

You now become free to invest your time doing the things you love. You can focus on improving your health, spend more time with your family, or pursue a creative undertaking that is the exact opposite of the hated job you left behind.

So why not make some money when you’re awake and also when asleep? Here are five reasons passive income is important.

  1. It’s Good For Stability and Growth

Passive income offers the investor a platform to stabilize and grow. When you receive automatic income, and you no longer need to work, it allows you to explore new ways to improve your finances even more.

  1. You Can Invest and Live Anywhere

When you own an automatic stream of income, you can spend, travel and live anywhere under the sun.

You can afford to live in the best suburbs of the major cities or metropolises around the world for a fraction of your income.

  1. It Reduces Insecurity

Nothing beats the pressure that confronts you when you’re unable to pay your bills. The anxiety, desperation, and fear evoke some of the worst emotions in us. The worst scenarios flood your mind like a hawk swooping for the kill. If you have a passive income, all these fears and anxieties dissolve and leave you with calming wellbeing.

  1. You Retire Comfortably

Having invested all your working time there comes a day to retire. But not everyone enjoys a comfortable retirement. For those who plan for retirement well, passive income provides a comfortable retirement as you rely on your nest egg to pay your bills and cater for expenses. Even when you find retirement savings are not enough, putting aside some little amount over a more extended period ensures a comfortable passive income when you retire.


There is growing evidence that a passive income brings about better health and better relationships. Many relationships are fraught with infighting caused by lack of money for general upkeep. This infighting can cause deterioration in physical and emotional health. Passive income can improve all this for you. It may sound a bit far-fetched, but it’s true.

So, what do you think ?