The importance of focusing your attention on passive income

22 replies
People can generate income in several ways, but there are two main categories that should be taken into account, which are passive and active income. In order to have a better understanding concerning them, here you have their definitions, as follows:



1. The active income is the income for which there have been performed various services. This type of income includes wages, tips, commissions, salaries, and income from businesses where one can have material participation.


2. The passive income is the income that allows an individual to earn money without being actively involved. There are various situations one can have passive income, such as limited partnership, rental property, etc. Even if the services of this income are not active, they are still taxable.



Now that you know their characteristics, you can easily spot the main differences. If there is anything you should know, is definitely the fact that a successful person has both of these types of income. However, it seems that once it is achieved, passive income is able to provide more advantages than the active one. The main difference is that when it comes to the active income a person has to actively be involved in the working process, while in the case of the passive income a person is not involved actively in the working process. However, those who want to have a passive income will have to work hard in order to have money to invest.



When it comes to Internet marketing strategies, you should know how to create both passive and active income. However, your main focus should be in generating more passive income. This is simple, since all you have to do is to create a website and to generate traffic. In order to do this, you don't have to spend hours in order to post ads on forums and Facebook, but you have to create a website that will actually attract your target audience. It has been proven that people don't click on the online ads that invade their computer every time they access a website. On the other hand, they are actually attracted by valuable content especially created for them. Besides this, you can also publish on your website YouTube videos and interesting pictures. It has been proven that consumers are attracted by visual media. As you can see, it is very easy to make a website work for you, generating the necessary income you need.



Now that you know all this, you should focus your attention on passive income. It may be more difficult at the beginning, since you will have to work harder, but with time you will be able to create a powerful income generator that will work for you. In this way you won't have to worry about your income and you will have more free time in order to enjoy life. As you can see, if you have the will it is possible to achieve passive income.
#attention #focusing #importance #income #passive
  • Profile picture of the author movie2k
    Yes i can understand this with running websites myself as you can see my site in my footer.

    Passive income is some thing hard to build and i find it hard.

    As you say

    When it comes to Internet marketing strategies, you should know how to create both passive and active income. However, your main focus should be in generating more passive income. This is simple, since all you have to do is to create a website and to generate traffic. In order to do this, you don’t have to spend hours in order to post ads on forums and Facebook, but you have to create a website that will actually attract your target audience. It has been proven that people don’t click on the online ads that invade their computer every time they access a website. On the other hand, they are actually attracted by valuable content especially created for them. Besides this, you can also publish on your website YouTube videos and interesting pictures. It has been proven that consumers are attracted by visual media. As you can see, it is very easy to make a website work for you, generating the necessary income you need.
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  • Profile picture of the author jeremy49
    I think you hit the nail on the head

    "attracted by valuable content especially created for them"

    If it resonates with a problem they need to solve, then they will not mind that you are not active. Therefore they will accept and pay for passive media such as training videos.
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  • Profile picture of the author pnglifesolutions
    good topic regarding passive vs active income. I would like to add that it would be beneficial to put some thought into short term vs long term perspective too.

    Many monetization methods such as building niche sites for Adsense or affiliate income can be extremely passive once you got them on the right track. The downside however is that they might not be a secure long term revenue (google slap can tank them overnight)

    Something passive and long term IMHO would be a membership site and software development i.e. built in continuity.

    bottom line is sometimes active income is necessary such as providing services. While it needs more active involvement from me, it provides me short term income to support my long term projects. Hope that makes sense.
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  • Profile picture of the author barbling
    Don't forget customer care followup sequences in your product launches as well - it's very easy to weave in affiliate links weeks/months after a buy.
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  • Profile picture of the author JensSteyaert
    I do'nt really believe there is something like passive income. Every income source online requires a lot of work. I would rater define it as automated income streams.

    That being said the most automated income stream is definately promoting affiliate products with recurring commissions (membership sites). You don't have the ongoing maintenance of the site and you still earn months after your initial promotion.
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    • Profile picture of the author Joan Altz
      Originally Posted by JensSteyaert View Post

      I do'nt really believe there is something like passive income.
      I was going to write this myself.

      Everything requires some work, maintenance, updating, testing, adjustments for change, scaling, etc.., I think that's a better term also: "Automated Income Streams".

      A very nice and intelligent writer used "passive income" a lot on her blog to describe how she earned money online. She had built up a solid foundation of articles on Suite 101 and her goal was to continue writing until she attained a certain level of passive income to retire.

      But that dream crashed when Google released the animals from its zoo.

      And it's not just Google. Buyer behavior changes, trends change, products fall off the popularity map, strategies that work today fail tomorrow..."set and forget" for a time is possible, but not for all time.

      Just as an aside (came to mind while writing this):
      Some of you might remember Grizzly Brears - maybe one of the best IMers at ranking for keywords ever. What happened to him - I don't know, but at one time that guy was ranking #1 for "make money online", and he used blogger blogs to rank. An amazing marketer and straight shooter, but he crashed and burned also (I guess - he has some rumors floating around about him of the "Elvis lives" variety. lol).
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      • Profile picture of the author Elvis Michael
        Originally Posted by Joan Altz View Post

        I was going to write this myself.

        Everything requires some work, maintenance, updating, testing, adjustments for change, scaling, etc.., I think that's a better term also: "Automated Income Streams".
        This thread will most likely get a few people saying "there's no such thing as passive income." History keeps repeating itself (in very annoying ways.)

        The big misconception (with passive income) is that many people believe that it requires no work in order to qualify as being "passive." But as Keithb89 implied, passive could be anything with less direct interaction involved. Therefore, by definition, passive income does exist.

        But yes, it can be used interchangeably as passive income or automated income streams, as opposed to one or the other.

        I see people here making money from Amazon books they published years ago (without actively promoting them anymore.) I see people making money from software they distributed years ago as well.

        And even if they do some promotion (or work) here and there, this still qualifies as passive because there is less active interaction involved.
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  • Profile picture of the author gcbmark20
    Creating passive incomes for your business allows you to take away most of
    the problems of having to make consistent one single sales from your sales funnel
    in order to reach your monthly income goals.

    One example of this is to create a membership site platform.

    Once you've laid the ground work and you've added lot's of useful content
    that people can get easy access to every month then it's just a case of improving
    and tweaking your conversion rates and your retention rates too.

    Retention rates are a key factor in running successful online recurring passive
    income membership sites because once you know that you can keep members
    active for several months by strategically drip feeding your content to them that
    they need and desire then this becomes a very powerful way to keep constant
    revenues coming into your business.

    Very powerful and I always encourage any mass product creators out there to
    think about creating them also.
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  • Profile picture of the author dreamhobbiz
    so what type of product, business or service would be best for passive income?
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    • i don't believe in passive income either, online at least

      something can qualify as "passive" for awhile but the internet world changes so fast that if you don't stay working hard someone else will and gladly take your "passive" income as their own

      I think if you classify anything as "passive" in your online portfolio it is a dangerous mistake and you put that income stream at risk by negligence
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  • Profile picture of the author keithb89
    I don't think the OP was describing a "free lunch" -- just less of a direct relationship between services/good provided and revenue. That being said, content with a long tail could be a sort of passive income in this context.
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  • Profile picture of the author Phil Steptoe
    I was once told "If you are exchanging time for money, you will never be wealthy."

    I'll never forget that. Passive income is what it's all about. The asset mindset is the road to riches.
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  • Profile picture of the author lionelfrench
    Yes Guys generating a system which generates a passive income does not mean there is no work involve. Let`s give you a step by step tasks you need to to do in order to achieve this.

    1/ Research a product that the market wants

    2/ Create a landing page

    3/ Create a serie of emails on your autoresponder (Videos even better)

    4/ Create traffic

    5/ Monitor and make adjustment.

    Now if you decide to generate traffic by posting on forums and be active on social medias every day I will not call this system a passive one as you require to work every day to generate traffic.

    On the other hand let`s say you decide to generate traffic by using youtube and you are going to do a research to find keywords with reasonable search and relevant to the product you want to sell.

    You create an amazing video talking about this specific keyword (Group of keyword) preselling your product and you repeat the process everyday for the next 50 days. After a while you are going to generate a system which will generate traffic without your assistance and some of them will convert into a sale.

    This is what I call a system creating a passive income but initially you needed to work on this for 2 months without making any penny and most people in this world do not have the patience and persistence to achieve this.
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  • Profile picture of the author Jonwebb
    passive income is as easy as building a stock porfolio that pays of dividends every quarter. The trick I finding real life companies that pays divdends, and have a history of paying divdends
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  • Profile picture of the author drr
    Actually very true point. Hard to build, but worth the effort. Membership sites are a good example - same amount of work and marketing on the product, but the clients stay around month after month.
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  • Profile picture of the author Aira Bongco
    Passive income is definitely better than active income.

    However, passive income takes time. It will require endless efforts that don't seem to get anywhere. Until that one day where everything starts moving.

    And this is the main reason why more people choose active income as they can get their needs satisfied immediately.
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  • Profile picture of the author IDoTheLegWork
    True passive income is perpetual. The IRS deems passive income
    are only rental activities or business activities which you are not
    materially involved.

    If you are not materially involved in your endeavor your income will
    disappear eventually.

    Forbes.com calls the type of income we are discussing as leveraged
    income. Instead of trading an hours work for a set amount of money
    we invest an hour into something that will work many hours (but not
    forever) without our involvement, in hopes that we generate far more
    income than we would as a wage earner.

    As we develop automated processes and systems the leverage
    increases. Maintenance will always be necessary though.

    Leveraged income does allow us to take significant breaks without
    involvement so we can enjoy our higher income on a regular basis
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  • Profile picture of the author Thomas Belknap
    Originally Posted by lionelfrench View Post

    The passive income is the income that allows an individual to earn money without being actively involved. There are various situations one can have passive income, such as limited partnership, rental property, etc. Even if the services of this income are not active, they are still taxable.
    By this definition, there is no such thing as passive income when it comes to business. BTW, I do agree with the definition.

    The reason I say this is because the whole passive income when it comes to business is pretty much a myth used to sell courses

    The minute you stop being active, then it is just a matter of time your business dwindles to nothing. That could take a week, month or year. Either way, that isn't a good thing and most definitely not something I consider passive.

    What I do think people should be looking at is leveraging their time. Get the most out the least amount of work.

    Forget the whole passive income unless you have a lot of money you can throw into some long term bonds.
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    • Profile picture of the author Steve B
      Originally Posted by Thomas Belknap View Post

      What I do think people should be looking at is leveraging their time.

      I had a post I was going to make until I read Thomas' contribution which is what I subscribe to.

      If you have a source of income that is regular and requires very little or nothing from you on an ongoing basis, why not put a little effort into it and crank it up? Scale it up so that it makes five, ten, or fifty times the profit it makes with no effort?

      How do you do that? Leverage. Other people's effort. Affiliates, partners, syndications, up sells, cross sells, continuity, membership sites, and about a thousand other things.

      When you have a proven niche, a product that sells, don't just put it on autopilot and leave it to whatever may come. More often than not, it will lose momentum and peter out.

      Put just a little effort into it and scale it up! Attack it! Make hay while the sun shines!

      Steve
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