The Real Value of Passive Income

Passive income's real value lies in the answer to this question: If you stopped working today, how long could you go before you ran out of money?You may or may not be in search of passive income ideas right now, but have you given much thought to the real value of passive income?

Of course, we know intellectually that passive income is money that comes in when you’re not actively working to earn it. It can be money that continues to come in because of work you did in the past, or it can be money that comes in because of investments.

What it does for you

But passive income’s real value lies in the answer to this question:

“If you stopped working today, how long could you go before you ran out of money?”

If your answer is any time frame shorter than “indefinitely”, there’s room for growth in the passive income area.

You see, part of the real value of passive income is that it allows you to focus on what you want to be doing instead of what you think you have to be doing.

Which doesn’t mean you’re likely to spend all of your time at the beach just because you could.

It gives you freedom of choice

Take Jimmy Buffett, for example. While I have no idea what his financial situation is like, he strikes me as someone who could easily be making quite a bit of passive income from his music and book royalties.

If anyone were going to enjoy sitting on the beach doing nothing, it’d be him. Instead, he works hard at putting on great concerts — and you can tell he truly enjoys the work.

Enjoy, and build from there

You might already enjoy the work you do (I do, for example), but knowing that you have some income coming in no matter what happens can still improve your outlook.

When you’re happier — both with yourself and with the work you’re doing — you also often do a better job because you enjoy and care about what you’re doing.

Don’t underestimate the value of feeling free to pursue the things that are important to you.

One comment

  • I completly agree with you about the power of passive income. I’m on a journey currently to replace all of my expenses by doing so. It’s good to see that someone else is thinking along the same lines that I am.