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A Not-So-Passive Look at Passive Income
By Daegan H Smith

Are you tired of working for hours on end everyday for the last
so-so years?

Do you want to take some time off from work, yet still earn
without doing much?

If you answered yes to these two questions, then passive income
is just for you.

If you want to achieve financial freedom while in the comfort
of your own home, you will benefit from knowing everything about
passive income.

What is passive income?

Here are some fast facts about it.

Passive income is only one of the three basic types of income -
active and portfolio being the other two.

Passive income is a type of earning that an individual draws
from owning a rental property, engaging in limited partnership,
or joining other ventures that does not require his/her active
and direct involvement.

Other examples of passive income include: preset web business,
interest paid from bank deposits, earnings from real estate and
property, royalties from doing creative work, bonus from share
holdings, network marketing, and income from marketing digital
files, such as software, e-books, scripts, or any service that
does not involve merchant involvement.

This type of income does not take account of wages or earnings
from participation in business, nor does it comprise interest,
dividends, or capital gains.

For tax reasons, it is essential to take note that losses in
this type of income usually cannot make up for portfolio or
active income.

What are the types of passive income?

Passive income has three types: residual, leveraged, and active
leveraged. The third, however, is not exactly passive, but can
be a key to more earnings while working less.

Residual income is a type of earning that one gets after a
while from doing work at one point.

Here are some examples of residual income:

commission received every year by an insurance agent whenever a
client renews his/her policy

royalties being collected by a photographer every time somebody
purchases one of his/her images from a clearinghouse

proceeds gained by an aerobics instructor from the sale of a
workout video that she produced for members of the gym where she
teaches

payments received by a writer who produces an e-book and sells
it via the Internet

Leveraged income is a type of earning gained from the effort
and labor of other people.

Here are some examples of leveraged income:

a profit margin made by a general contractor on the job
completed by subcontractors

income from franchising your business to another entrepreneur

commission received by a network marketer from the sales made
by the individuals under him/her

payments received by a writer for the sale of his/her e-book by
way of colleagues who promoted the merchandise

Active leveraged income is a term used for the type of earning
that requires active participation on your part, but you will be
able to make more cash by involving more individuals.

A one-time, big-time event is usually involved here like:

a class, symposium, or seminar

a convention or conference

dance and song recitals and concerts

parties like raves and the like

This kind of endeavor might require direct involvement on your
part, but your earning power is higher than if somebody will be
paying you for an hourly rate.

You may consider packing an area with a thousand people and
having them pay $50 each. In the end, you will be delighted to
find out that you were able to pay for the facilities you used
and the staff you hired, and still be able to keep a sizeable
chunk of the proceeds for yourself.

What happens next?

Think about these matters and make sure to apply any of the
good ideas in your next business enterprise.

About the Author: Daegan Smith Is An Expert Home Business Coach
And Trainer "Who Else Wants To Lean The Secret To Making
$85,147,717 Per Month While Quickly And Easily EXPLODING Your
Network Marketing Organization by 7,141 People Without EVER
Buying Or Calling a Single Stinking Lead?" Free CD Explains All:
==> http://www.easymlmprofits.com

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