What is a True Passive Income?

Now that I will lose my job very soon I had started looking for alternative ways for making money. I’ve considered the idea of looking for a new job but I think that probably it’s time for me to start a business of my own. Unfortunately there’s just a handful of good job opportunities in Mexico, and most of the job positions here offer me like half of what I’m currently making, for more hours of work a week.

Thanks God due to local labor laws here in Mexico, if I’m fired without a justified cause (like in my case now), then the company needs to pay me a good severance for this, so I’m eagerly waiting to get this money.

Through the years, I’ve been a fan reader of entrepreneurial courses and books like “Rich Dad Poor Dad” and Robert Koyosaki teaches us the importance of having a business that can give us “Passive Income”.

Today while I was navigating on Internet researching for information about Vending Machines, I came across a good article that gives an excellent description of what “Passive Income” is. Here it is:

This is a great and excellent definition for this. Most of the times when we think about Passive income, we think of it as “Money without any Effort”, it comes to my mind the picture of a rich man with a lot of money in the bank or lots of money invested in stocks or a bunch of houses for rent, and cashing every month a good amount of money as interest earned, dividends or rental income.

This is true passive income but if you think about it, even these rich guys have to spend a portion of their time, managing their money, stocks or real estate properties. The trick here is that they spend just a few hours of their time managing their business, so if you divide what they make by the hours spent, it gives you a lot of money per hour, and since they invest just a few hours of time, then they are free to do other business or going to vacation.

So having said this, as the article states, there are different levels of Passive Income. The more Passive or automated a business is, the more amount required for the investment and the more the work required. The key here is that as the definition says, the gap between what you do from a business that’s giving you passive income needs to be increasing over time vs. the hourly wage you would earn in a Job.

Among the business I’m considering at this time that might bring me a passive income are my blog, building niche websites and Vending Machines. I need to put all this ideas in plan I can execute and keep track of my progress.

Here is the link to the article I wrote in case you are interested