The Millionaire Blog

As an individual the number of hours you can work and the amout of revenue you as an individual can generate is finite. To break that barrier you need to generate passive income. In this article I will explain passive income and provide examples of three types of passive income.

Passive income is defined as income you generate without actually being involved in the actions that generate the income. In other words, it does not require your direct involvement. You can be sick, go on vacation, and still generate income, as the income will not stop just because you’re not there.

Let’s take a quick look at two types of residual income and a third type of income that technically is not passive but can play big role in generating income.

Residual Income:is income you earn over time from something you do once. Examples of residual income:

Leveraged Income:uses the work of others to generate income for you. For example:

There are many different models of both residual and leveraged income. A model that combines both is even better. As an example if you are the owner of the insurance company you’ll receive residual income when policy owners renew, but you are also making leveraged income by using agent to sell your product.

The third type of income though not technically passive leverages people but in a different way. I am referring to active leveraged income. This is income derived by the direct participation of others. For example:

Passive income will allow you to multiply your revenue without having to multiply your work. I am creating a category on this blog devoted to “Passive Income”, in it I will provide more detailed examples and ideas on creating passive income.

Regards