For brief introduction, active income refers to money gained as a result of spending time to perform a service or selling a product. The income can also be quantified as salary or wage and the categories include anything that the income earner has to substantially participate on a regular basis. For instancing, working in a farm, corporate jobs, factory workers, drivers, social workers, sole proprietorship where the owner has to be present materially for effective running of business.
On the other hand, passive income is gained with less to no work in production and maintenance. Some examples include property and equipment rental.
Blending both Active and Passive Income
Though rarely combined, doesn’t mean they can’t be on the same page.
Each of these income groups, has a unique twist to it. Passive income stream guarantees complete freedom in terms of time. But it might not be a long term output for meaningful service or products.
Or in worst cases, you might find yourself with freedom, money, doing meaningful projects with your passive stream but quite lonely – or hanging out with a wrong company of friends.
On the flip side, active income group, ( or regular job ) may seem kinda demanding in terms of time involvement for the monitoring of the actual projects but you are happy with the work output and the work associates or close friends and family outside work bring a positive satisfying vibe on the long run.
With the above illustration, one might opt for the active stream instead
How to find the balance
Well, in the modern day society; we are somehow convinced that all we need is financial Independence, without sacrificing your happiness in life. But that’s not true!
You don’t need a 9-5 job to foot all your bills or running a full-time business!
What you need is a workable situation; one which creates time for friends and family and personal time too; and ability to pay your expenses without pressure – maybe leaning you with a little savings too!
The best part is, only you have the freedom – to choose what works for you. Whether this means 25% passive income and 75% active or 100% either.
For instance, if you want to start a business and transition from full-time job; you would approach it by: working full time for a specified duration say 5 years. While doing this; you’d have to move into a cheaper accommodation area or even share house with a friend or your family for extra savings. Within the same window, you could cut down expenses such as vacations and social gatherings that you need to spend on. After the 5 years, you could slowly start your business as a side gig where you work in the evenings or weekends. After the business has a concrete foundation – then and only then can you quit your full time job.
You could also opt for part-time job after the 5 years duration and balance between you business and job, as long as you are happy with the workable situation