As good as a healthy active income might be, it should not be the height of your financial goals. Perhaps you’re doing well financially with your day job, but soon you’ll realize you can only go so far by trading your time for money. Active income carries certain limitations, and until you come to an understanding of those limitations, you will never realize your true need for additional streams of passive income.
Limitation #1: If you stop, the money stops!
There could be a myriad of issues that might prevent you from being able to work. You could become disabled or may have to stay home to care for a sick child or spouse. You may be forced into an early retirement or could lose your job altogether. And if you’re unfortunate enough to face one of those life challenges, you’ll quickly realize that the bills keep coming in even when the money stops. Of course, a physical job in a physical location is a good thing that many of us rely on, but we must realize that it’s not the best thing to meet our financial needs.
Limitation #2: Time is in limited supply.
Let’s be honest…we all want to build wealth & multiple streams of income. But if our only way of making money is actively, then we will eventually hit a glass ceiling we can’t ever overcome. For example, there are only so many miles that the truck driver can log and only so many shifts that a nurse can take on in a day. And even if they were both allowed to work 24 hours a day jacked up on energy drinks and caffeine patches, there income would still hit a cap. The solution? Income that doesn’t require YOU to be working.
Hopefully you’re beginning to recognize that active income – no matter how much of it you can acquire – is not the best option if you truly want to meet your financial goals. What you truly need, and should be working towards, is what we call the Holy Grail of money…PASSIVE income.
Multiple streams of income are great, but not if they are ACTIVE streams of income in the form of multiple jobs (even if you own them) with 80+ hour work weeks and no work/life balance. You will eventually burn out or die a lonely and miserable person. Passive income is the art of making your MONEY work for you, instead of YOU working for your money, and it should be the investing priority of every serious investor.
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