Passive Income versus Active Income

Most of us, and by us I mean the working class, live off of an active income. This means that whatever money you earn you earn through time and/or labour, and there is a direct exchange of cash for labour produced or time spent on a project. Passive income, on the other hand, is produced through stock investments, portfolio returns, and continuous payments from rental properties that you own. In other words, passive income is generated in the background, while you do something else in the foreground, and not all of it is directly tied to your time or your energy, save for the initial time you spent researching the stocks or picking out the property.

Many people believe that passive income is a luxury afforded to the rich who have money to spend upon stock and real estate. Unfortunately, this is a widely believed myth which has in some ways been perpetuated from generation to generation, becoming somewhat of a self fulfilling prophecy. As people are told by their elders and peers that you cannot break the barrier between the rich and poor, they soon begin to despair of ever doing so themselves, never experiencing and then realising the truth that no such barrier exists.

In truth, stock investments brokered by a bank can be started with as little as one thousand dollars, foreign exchange accounts can be set up with reasonable margins for as little as two to five thousand dollars. Some reasonably nice pieces of real estate can be bought for as little as a fourteen hundred dollar down payment, and then rent can be sold higher than your mortgage payments, giving you a steady income every month. All of these transactions can be found online or through local agents, and such deals simply require a little research and careful planning and follow-through. Both types of income are important.

In the workplace, drug testing affords you a certain amount of leverage in two directions. In one direction, employee drug and alcohol testing acts as a sort of reminder to your employees to not behave irresponsibly, and in the other direction, it can be used as evidence in dismissing an employee who does not obey company policy. Both types of leverage are important.

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