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To be honest, I only heard of the term, "passive income," a couple of years ago when I first started learning about money. Blame that on being raised by parents who believe money should not be publicly discussed and never receiving even a day of financial education at school!
But wait, doesn't my background sound familiar? Because if you're also a Filipino from a middle-class background and also got "traditional" education, you can probably relate. Right? Let's not fret, though, especially now that we understand how important financial education is!
So what's passive income?
This is basically a source of income that you don't have to consistently work hard for. In other words, this is income you get even when you're not doing anything.
Sounds great, right? Imagine not having to worry about your electricity bill because you know a source of passive income takes care of it. Work smarter, not harder, as they say!
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It's not surprising to know that if you want to achieve a level of financial independence, what you need to establish is passive income.
How Different is it from Windfall?
Windfall is money you didn't expect. For example, it could be from an inheritance or a donation or a tax return. Both are not immediate products of working. The difference between a windfall and passive income, however, is that the latter comes regularly.
In other words, it's almost like a salary that you get without lifting a finger. However, unless you have millions in your account that you can freely use to invest, please take note that passive income usually doesn't come right away. It arrives after years of work and investment (remember delayed gratification?).
Common Sources of Passive Income
