Other ways of earning passive income are through buying and selling real estate, investing in “ownerships” of public companies through the stock market, investing in government bonds (which are IOUs by the government to those who want to grow their money for an agreed time), and setting aside money in time deposits, which can be used to help build an emergency fund. One common way is through opportunities and activities where you can turn money into assets. Unlike being fully employed or doing freelance work, it does not require much of your time and effort. How do you earn passive income? Most of us are trained to attain only active income growing up, which is why only few know about passive income and how to earn it. In short, passive income describes the idea of “making money work for you.” These may be investments you have made where you earn money or work you have done in the past that continues to pay dividends even in the present. Passive income is money from activities where you have no active or direct involvement. See related: extra income tips from Metrobank So, what can you do about it? You may need to assess how to increase your income source. It could also be too meager for you to build an emergency fund.Īnother challenge active income earners face is the reality that they cannot possibly provide certain duties or services their entire lives. For one, it might not be enough to cover your living expenses. However, a regular active income comes with challenges too. It also comes at expected periods, so it is easier for you to save and plan.

For one, it is more predictable and secure if you’re trying to budget your monthly expenses. Having regular active income has distinct advantages.

Such is the case for artists, bakers, chefs, and tailors. Some do get paid daily, weekly, once every month, or paid per project.Īnother way a person can earn active income is by selling a product. Payment for active income earners happens every two weeks (colloquially called “kinsenas” or paid every 14 to 15 days). It is the most common type, if not the only type of income for most Filipino households. You can even be working for yourself, which is called being self-employed.Īctive income earners are also either full-time, part-time, freelancing, or contractual workers. If you’re working for a person or a company–be it manual labor, office work, or home-based service–you earn active income. passive income, knowing it can be insightful and may even lead to new opportunities.Īctive income is defined as salary earned from specific duties or services rendered according to an agreed task, within a specified time frame.Įxamples of active income are salaries, tips, fees, commissions, and allowances from the companies you provide services to. While you can go on with your life without learning the difference between active income vs. There are two types of income: active and passive income. One of the most basic concepts about money that you need to master is income.ĭepending on your financial and occupational situation, you may be able to find additional income streams so you can earn more. When it comes to your financial health, you must understand how you acquire money before you can be financially resilient and secure.

Sources of passive income