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Passive Income vs Employee Income

By Edited Jan 17, 2016 0 0

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Passive Income Vs. Employee Income

Getting a job and trading your time for money may seem like a good idea.  There’s only one problem with it.  It’s work!  It’s the hardest way you can possibly generate incomeHave you ever considered what it might be like to get paid if you’re not working (aside from begging)? 

Don’t you think your life would be much easier if you got paid while you were eating, sleeping, and playing with the kids too?  Why not get paid 24/7?  Get paid whether you work or not.  Don’t your plants grow even when you aren’t tending to them?  Why not your bank account?

Employee Income

Employee income is the most heavily taxed there is.  In the USA you can expect that about half your salary will go to taxes.  The tax system is designed to disguise how much you’re really giving up because some of those taxes are paid by your employer, and some are deducted from your paycheck.  But you can bet that from your employer’s perspective, all of those taxes are considered part of your pay, as well as any other compensation you receive such as benefits.  Even the rent for the office space you consume is considered, so you must generate that much more value to cover it.  You might feel supported by your corporate environment, but keep in mind that you’re the one paying for it.

Another chunk of your income goes to owners and investors.  That’s a lot of mouths to feed.

It isn’t hard to understand why employees pay the most in taxes relative to their income.  After all, who has more control over the tax system?  Business owners and investors or employees?

You only get paid a fraction of the real value you generate.  Your real salary may be more than triple what you’re paid, but most of that money you’ll never see.  It goes straight into other people’s pockets.

Does putting yourself in a position where someone else can turn off all your income just by saying two words (“You’re fired”) sound like a safe and secure situation to you?  Does having only one income stream honestly sound more secure than having 10.

Passive Income

Most of us often start out on the traditional employee income path.  Go to school, get good grades, pray we score high enough on our SAT’s to enter the recognized college of our choice, then get in line to compete for the job of our dreams.  But we eventually realize that trading time for money is life draining, and that there must be a better way.  And of course there is a better way.  The key is to separate your value from your time.

There are systems that generate income 24/7, especially passive income.  This can include starting a business, building a web site, becoming an investor, or generating royalty income from creative work.  The system delivers the ongoing value to people and generates income from it, and once it’s in motion, it runs continuously whether you tend to it or not. 

Sure it takes some upfront time and effort to design and implement your own income-generating systems.  But you don’t have to reinvent the wheel — feel free to use existing systems like ad networks and affiliate programs. 

You might think it’s important to get a job to gain experience. But, you gain experience from living, regardless of whether you have a job or not.  A job only gives you experience at that job, but you gain ”experience” doing just about anything, so that’s no real benefit at all.  Sit around doing nothing for a couple years, and you can call yourself an experienced meditator, philosopher, or politician.

For all the great qualities of passive income it takes work, motivation, and persistence.  And even though it takes work to go the traditional route of employee, it also takes work to set up passive income streams. 

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