This online publication is focused on generating passive income, but that doesn’t mean we are against you building income through more active means like starting a business. In fact, the perfect scenario is converting income from a profitable business into more passive streams. However, the ultimate goal should be to generate enough income through passive investments to sustain your lifestyle. Here’s why:
Flexibility
- Passive income gives you more opportunities to not be fixed to one job
- It allows you to move cities, change careers and not have to worry as much about income
- Freedom – more control over how and when you work for someone else (e.g. part-time job, volunteering)
Security
- Passive income affords you financial security against loss of work (e.g. layoff, furlough)
- Income is still being generated even if you suffer a health crisis and cannot actively work (e.g. short or long-term disability)
- A safety-net for unforeseen emergencies (e.g. car repairs, house repairs)
Protection
- Can serve as a hedge against inflation, especially if your salary isn’t keeping up with inflation
- A safety-net for your net worth and savings (e.g. divorce, death) that protects against long-term loss