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True meaning of passive income and how to generate passive income

Updated on September 16, 2013

Passive income may be defined as income that does not require direct physical or mental effort 100% per cent of the time. In a way interest on bank accounts can be included in the items regarded as passive income. Similarly income or dividends from shares can be also because all they require is the investment of your money which are then traded into shares or stock of the company. The company then uses the money to create a dividend for you and the company.

Probable the most fruitful of passive income comes from Royalties either from something you have invented, or written, designed or sung. For instance I think John Lennon's 'Imagine' song took two hours in total to produce yet the song still generates income for his estate 30 years on...Similarly the man that invented the first can opener the estate still derives royalties from the design patent & the royalties that come from it...

The bottom line is either you invest your time your money or both.

With most start up businesses say such as Omega-trend you have to come up with about $300 dollars for a starter pack and find a omega-trend member who is willing to sign you up. Usually they are and then the best thing is to be guided by them as to where to go next. Usually the first issue is to get a contact list of people who you can contact about the product and services that say omega-trend offer. You then ring these contacts and say something like. Ive got a product or service that can generate residual income for you that requires little of your time. Would you be interested in earning more money ?. So on and so forth until they become member and start doing the same toying. Eventually you can have a large network of affiliates who you get a percentage of the profit generated by all the sales. This can be quite lucrative. Some of the earlier superstars earn 10,000 dollars week. It must be remember though that they are the ones at the top of the pile and there fore they have already invested considerable time coaching their affiliates and ensuring they select the right ones to train...

Other forms of passive income might be working for Amway or Avon. With these you promote products and services to friends acquaintances ands other social networks in time you generate affiliates who are accountable to you and with that you earn some of the profit that the affiliate makes.

On the Internet income is generated by the number of people that visit and read your site and as well purchase products that are advertised on your site...

With this you need to ensure your properly registered with each advertiser and that the code is in the right place on your site ands active !


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    • profile image

      edna 6 years ago

      Just earn and invest not spend more.It's as simple as that. Where? CDs, gold, rental properties, pension, businesses, devidends, royalties, trading, shadaqah (giving to less fortunate after paying your zakat 2.5%), blogging, bonds (sukuk),cashflowing...May ALLAH BLESS U (GBU), FOR ALLAH IS THE ULTIMATE OWNER...We only borrows. In the end...we give all back to Allah.

    • Springboard profile image

      Springboard 8 years ago from Wisconsin

      I agree passive income is, hands down, the best form of income there is. I really wish more people understood the whole concept of money, how it works, and how it truly can be obtained. Everyone has a tendency to focus on college or career, and while those things are important, what's really important is to change the mindset that those things are what will earn you the most in your lifetime. If you work to earn to spend you will never attain wealth. If you work to earn to invest, you will eventually replace the earnings you work for with the earnings that continue to work for you.

    • barryrutherford profile image

      Barry Rutherford 8 years ago from Queensland Australia

      Avon has been around a long time just like Tupperware my Mother used to do it when I was around five years old !

    • Maniadorendimento profile image

      Maniadorendimento 8 years ago

      Hello, Barry

      I recently started a passive income with Avon and I have to say I like it.

      It is not a big amount but it allows my some cash flow wich I find almost as important as a passive income.

    • barryrutherford profile image

      Barry Rutherford 9 years ago from Queensland Australia

      very passive at a dollar a (~)

    • glassvisage profile image

      glassvisage 9 years ago from Northern California

      I like to think of HubPages as passive income :)

    • barryrutherford profile image

      Barry Rutherford 9 years ago from Queensland Australia

      me too i found it hard some people especially couple thrive on it !

    • Eileen Hughes profile image

      Eileen Hughes 9 years ago from Northam Western Australia

      I find that things like amway is very hard been there done that but you really have to be pushy to really sell sell sell, that just was not me so pulled out. I tried a few different things. If you have the knack to talk you would do well.

      Thanks for sharing this. from another ozzie

    • guidebaba profile image

      guidebaba 9 years ago from India

      Good. This was my request. You have tried well. I appreciate. Best Wishes.

    • barryrutherford profile image

      Barry Rutherford 9 years ago from Queensland Australia

      okay ill add a bit more...

    • sukritha profile image

      sukritha 9 years ago from Cochin

      Oh feel you could have wrtire a littile more. Good subject to write upon.