the income from your day job is your active income – because you trade your time for money , working for someone else
passive income is the income for which you don’t have to work anymore . it is the result of an idea or your money earning money
an example would be .. you have bought a rental property from the money earned . the people stay in those properties and pay your rent
or your money invested in dividend paying stocks . when the company pays a dividend , you will be getting that money – without working for it . another example of passive income
how do you get passive income in your business ?
suppose you are a yoga teacher . you have some students who pay you for the hours that they get your services. but there are only 24 hours per day . you cannot teach more than a certain number of clients and hence your income is limited.
but if you have a website , which runs 24 hours a day , the clients can sign up on it depending on their location . you can also have a database of yoga teachers in various locations. now , these yoga teachers can get paid by the students , the rates are decided mutually based on various factors such as location , experience , etc.
So , how do you earn income ? by commission .. when a yoga teacher signs up on your website and gets a referral student through your website , you charge them a fixed percentage , say 5 % or 10% of their hourly fees . This is passive income – you did not teach those students but you still earned the money.
welcome to the aggregator model.
another example – uber , lyft , ola , didi – these companies match supply ( cab drivers ) and demand ( the passengers ) . for matching the supply and demand , they earn a certain commission per ride . Passive income . they are smart computer programs , making money from matching supply and demand and earning commission in the process.Add to favorites