| Most people exchange their time for | | | | when exchanging time for money. The |
| money. Their entire compensation | | | | reason is simple. There just is not |
| package is determined by the number of | | | | enough hours in a week to work to make |
| hours that they work in a given week. | | | | it profitable long term. Eventually, |
| Typically, an hourly wage is set which | | | | there is a cap on one's earning |
| is multiplied by the total hours worked | | | | potential due to the time limitation. |
| during that time period. The standard | | | | Couple this with the fact that taxes |
| in this country is 40 hours with | | | | take a greater percentage the more that |
| overtime accumulated after that. One's | | | | is earned and one quickly realizes that |
| complete paycheck is contingent upon | | | | it is a fruitless proposition. |
| them showing up for work. Miss a day of | | | | The key is in the concept of passive |
| work and there is no pay earned without | | | | income. Basically, passive income is |
| sick time. | | | | money acquired without you "directly" |
| Another common pay plan is a salaried | | | | working for it. It is income that is |
| position. This is similar to the hourly | | | | not an exchange for time. If work is |
| except the pay rate is the same each | | | | required, it is done one time with the |
| week regardless of the number of hours | | | | money flowing in multiple times. |
| worked. Overtime is usually not | | | | There are two forms of passive income: |
| available in this scenario. | | | | income derived from business and income |
| Unfortunately, most people end up | | | | derived from investments. Business |
| working more that the normal 40 hours | | | | income is the money that one receives |
| under this plan. Companies put so | | | | without actually needing to work in the |
| much pressure on employees to increase | | | | business. One acquires a business that |
| production that the time spent working | | | | is either run by someone else or is self |
| seems to lengthen with each passing | | | | sufficient. The profits generated are |
| year. | | | | taken out by the owner thus yielding |
| This is the common mindset that is | | | | passive income. |
| instilled in all of us growing up. We | | | | Income derived from investments is |
| are taught the we are to do well in | | | | making money from money. Instead of you |
| school to get into a good college. Once | | | | working for money, it is putting your |
| there, high achievement is stressed so | | | | money to work for you. depending upon |
| that we can get a good job with a decent | | | | the investment, a rate of return is |
| salary. When we accomplish that, the | | | | realized which generates passive income. |
| pressure is to work hard so that we can | | | | Examples of this are dividends from |
| advance to higher ranks within the | | | | stocks, appreciation in real estate, |
| organization with an associated increase | | | | interest on savings, etc... |
| in pay. Finally, we can retire after a | | | | The wonderful aspect of this type of |
| productive career and drift off into our | | | | income is that the money is created |
| golden years. | | | | regardless of one's efforts. If you |
| Unfortunately, in this era, this concept | | | | don't show up for work, the income still |
| is not realistic. Although the | | | | exists. You will earn the same while at |
| educational system still prepares us to | | | | work as you would sitting on the beach. |
| get a job, the lifetime employment with | | | | In addition, this allows one to increase |
| the same company is bygone. People | | | | their overall efforts. If your money is |
| typically work for numerous companies | | | | working while you are focusing on |
| during their careers. Massive layoffs | | | | something else, you are, in effect, paid |
| are well documented. Loyalty either | | | | twice for your time. It is easy to see |
| from the company or the employee is | | | | how it is possible to create massive |
| almost non-existent. Oftentimes, people | | | | wealth under this scenario. |
| are caught in financial hardship due to | | | | Focus your attention on creating passive |
| unexpected changes in circumstances. | | | | streams of income. It holds the key to |
| How does one get ahead? It almost | | | | all financial freedom. |
| impossible to attain financial abundance | | | | |