Quest for Quiescence

I haven’t talked about passive income on this blog yet. So far I’ve mainly discussed alternative income. I want to discuss passive income and how it relates to alternative income. First off, let me describe what alternative income means to me.

Alternative Income is any source of non-traditional income. By non-traditional, I mean anything other than a typical day job. Something that wouldn’t require submitting a resume, being interviewed, working for an employer or exchanging your time for a predetermined rate of pay. This may include but is not limited to…

• Selling Stuff on Ebay
• Washing Cars
• Typing Transcripts
• Running a Lemonade Stand
• Completing Online Surveys

Each of the money making methods listed above could be considered alternative income according to my definition above. The problem with each of these examples is that if you stop actively working on them, the income goes away. This is called Active Income. Active Income isn’t necessarily a bad thing, but it is something you need to be aware of. You need to understand that setting up alternative streams of income that are active in nature will require continual effort if you want to see on-going returns. For example, for me personally, in my “Quest for Quiescence”, I don’t want to end up with any active income sources UNLESS the active portion is something I truly want to do. So, what’s the alternative? Passive Income of-course!

Passive Income is also a form of alternative income (Active Income and Passive Income are subsets of Alternative income) but it is the polar opposite of Active Income. Passive income will continue to provide returns with out requiring any active effort. Ideally, passive income would be something that would not require any effort at all… Ever. I’m sorry to have to tell you this, but I don’t think this exists (If I’m wrong please let me know). Some amount of effort is always required, at least initially. Even on an ongoing basis there is usually some amount of effort required to maintain an income stream. That said, most people will accept an active component in their Passive Income definition at some level. Usually people will consider a significant initial effort followed by minimal effort over a longer term as Passive Income.

Passive Income is a subjective concept. Everyone has their own opinion as to what constitutes Passive income. But, true Passive Income, even if unattainable, is the holy grail of all alternative income. It may be an objective that is impossible to reach, but it’s a journey to see how close we can get.

What’s your definition of passive income? Care to share in the comments?

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