Active income and Passive income both are vast topics internally. We will discuss each step to get rich effectively without working for money.
Definitions: Active VS Passive Income
Active Income: This category includes things for which services have been performed. Which is wages, salaries, tips, commissions and income from businesses in which that individual participation is must.
Passive Income: This category include earnings from an individual who drives it from rental property, partnership or other sort of enterprise in which he/she is not actively working there or involved.
Like, I remember the RICH DAD POOR DAD, Mr. Robert Kiyosaki says, in his book that Poor and Middle Class works for money while the Rich don’t work for Money, The Money Works for the Rich.
Now in this point it may seem little confusing that how money works for the rich. It’s that easy that they are investing their money in real estate, stocks, bonds, businesses etc. And In which they are not actively participating there but they yet make money from places like rental property, stocks, businesses etc.
Now the Middle Class always buys luxuries that will drain all of your money, and they buy big houses, cars and other useless materials.
And the Poor people if you give them a million dollars they will soon be poor again, because they don’t know the rules of money, they will waste all the money paying their expanses for the entire life.
How to get into the Rich Category?
Well, it is easy to get rich but first you must know the rules of money. Like the Warren Buffett one of the world’s best investor who says “Never Depend on a Single Income Source.”
Why it is important to create Multiple Income Sources?
It is essential because there is no guarantee that today your job, businesses etc, is going fine it may end anytime. Just imagine, if your boss through you out of your job. What would you do then?
Or, multiple incomes of sources can also help you to fulfill your dreams. It means when you have the least amount of money in your account, you can invest in any business and do whatever you want.
Now, if you are actively working, it is not wrong though, but you must save some money so that you can invest them in your desired business or property that could be anything that you actually want.
And when you have successfully completed saving good amount of money and started investing you can then leave your job and can do other things that could facilitates you to not work for money but make the money works for you.
One of my mentors, who told me that you can solve 99 percent of your problems through money. If you try further you can 100 percent solve your issues from money?
Now I don’t discourage you from leaving your 9 to 5 job or other sort of jobs that you do, I am just letting you know the rules of money how to be rich effectively. Do your job and try saving some of them and when that money grows try just investing them in any real estate or job or that might be a company, which could help you become rich.
You should remember one thing about MONEY, You must have to have a good Financial education. That you could easily understand how money works.
The greatest investment in the world is to invest in yourself, what I mean by this is that you must get financially educated and read as many books as possible on investing.
Your brain is the greatest Asset that can make you what you want in life, if you use it correctly, don’t wish for things, Desire for them, set goals and be patient. It will generate good results for you’re very soon.
There are Four Types of People (ES | BI)
- Self Employed
- Big Business
Now in our very first category we have Employed person. Who basically exchange your time for an income? You won’t get paid if you don’t work!
Now in our very second category we have Self Employed person. Who works for him/herself but do you think that you can take 6 holidays in your business and yet your business keeps on going without you? Exactly Not?
Now in our third category we have Big Business person. These are the people who have people working hard for them to generate them an income!
Now in our fourth category we have Investor person. This is the person we want to be, they are very keen and smart. They are the people that have money working hard for them. They play gold and live a good life!
Now let us take an example of Mark Zuckerberg CEO of Facebook. He is very intelligent person, He invested his money and bought Instagram, Whats-app and other platforms. He is smart because he invests the money things that he really has the knowledge about and knows that this is the chicken that gives gold eggs. Now just see where Instagram and Whats-app is today, how they are generating income for them.
Always keep in mind that you ought to invest in things that you understand and have deep knowledge about them.
If you are a student like me and you don’t have money to invest, it does not matter at all. Invest in yourself learn more about financial education and intelligent investments. And these days, it so easy you can work online while studying and make good amount of money that you can later invest in things that you desire for.