Passive Income.... What is it, and how do you get it?

Thanks Dien. :)

I thought I’d take this opportunity to clarify my thoughts on employment, in case anybody got the impression I was against it in my earlier post, which I’m not. As a full-time university student, I still work two part-time jobs that total 28+ hours per week, and assist one of my lecturers with research on the side.

So, why do I work these two part-time jobs, when I stress the importance of passive income over active income?

Well, there are two key reasons.

Firstly, active income and passive income can easily coexist. Initially, active income is a great source of funds to build your passive income if you choose to build it through property or stockmarket investments. You can of course build it by taking a more entrepreneurial route and set up a small business.

Secondly, I do not view employment as simply a way to earn money. I believe there are two components to employment – the benefits you receive through your wages, and the benefits you receive through the knowledge and skill you learn or improve.

The former reason is the primary one many people focus on, I think, in their efforts to become richer. I, on the other hand, am more focused on the experience and knowledge I am picking up.

That is why I am working at a stockbroking firm, and at a tax consultancy, rather than at McDonalds or Burger King. When I was younger, I never got a job at places like McDonalds or Burger King. Was I just being lazy? I’m sure some of my friends would say so, seeing as they all worked at such places. I never thought working at such places would build up my skills though, so instead I went to work on my own small businesses and gained good experience that way.

So, the point? Taking on jobs that will build the skills you lack and want to have can be very valuable.

- Thomas Rice.