There is a limit to how much workload our body can handle – and that limit tends to dwindle as we grow older. By the time we reach the retirement age, we lose the vitality and drive to work for earning a livelihood or considering new ventures because this is when we hit the ceiling.
If you want to have a peaceful and hassle-free after-retirement life, you need to seriously start thinking about ways to generate passive income. Not only that, you can achieve financial freedom well before retirement if you plan well, allowing you to enjoy the little luxuries of life during your prime age.
Why Should Passive Income Matter to You?
Active income is simply a tradeoff between time and money – you put in your time and effort at your workplace which in return gives you money. Passive income, on the other hand, refers to reoccurring income that you get by spending minimal effort and time.
It is the most lucrative way of generating income that allows you to maintain a better work-life balance and speed up your journey to attaining financial freedom.
Establishing a steady source of passive income isn’t as easy as it may sound. Arguably, the most difficult part is laying down the foundation and starting the flow of greens. However, your hard work pays off copiously when the tradeoff of time for money shifts your way positively – more income for less time.
Still not convinced? Here are some great reasons why passive income should be on your priority list:
Extra Cash in Your Bank Account
You would no longer be bound by your salary or be forced to compromise on the little things you enjoy to make ends meet. When you have a side income that supplements your regular paycheck, you are able to cope with additional expenses without having to slash your budget for simple pleasures or falling into debt.
Most people have to make peace with unreasonable work conditions or annoying bosses because they don’t have the choice of giving up their job. In some cases, people are living hand-to-mouth, and can’t afford to switch jobs. But with a passive income, you can have the option to reduce your working hours, find a more comfortable job that pays less, or survive if you lose your job.
You have peace of mind that whatever the circumstances, you won’t enter a financial crisis if anything happens to your active income stream.
A Source of Relief for Emergencies
According to the annual report of the Federal Reserve, over 47 percent of Americans do not have $400 worth of savings to cover unexpected expenses like a medical emergency or car repair. This is because a majority of people live paycheck to paycheck, having little to no savings to act as a cushion for emergencies.
A passive income stream can allow you to have extra money at your disposal to cover for such emergencies without putting a dent on your bank account.
Regardless of how you look at passive income, in today’s world, having a steady, reoccurring source of income is of paramount importance.
What you can do to set up a passive income stream is a different ball game and a topic for another time - so stay tuned to our blog for that!
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