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Thursday, September 10, 2020

ACTIVE VS PASSIVE INCOME: WHAT'S THE DIFFERENCE?


   Getting a job, receiving a salary, and paying for everything, that process is usually done to survive. Obviously if you do a particular job and get paid for it, it's the same as you're getting active income.


On the other hand, many people also dream of being able to have funds that come "without" additional effort in getting it. These funds are often referred to as passive income.

However, what exactly is the difference between the two? And more importantly, how do I get both?

Active Income 


Active income received by you with a fixed time. For example, if you're an employee, you'll earn per day, week, or month from the company or place you work. When viewed from an entrepreneur's perspective, this active income comes from the results of them managing their business. 

Simply put, active income is the money you receive in return for doing a service. For example, hourly wages, salaries, commissions and tips, business net income, and more. 

Usually this active income is used for daily or future purposes. However, on the other hand, this active income has also great risks. When you become an employee, there is a risk that age factors, illness, bankrupt companies, or layoffs put your active income at a standstill. 

Passive Income


With passive income, there is usually also a plan in implementing it. Passive income itself is included in the strategy to maintain one's assets and holdings. This strategy also increases the chances of reducing risk when active income is stalled or reduced. 

Passive income is the result of investing with the assets you own. So, where should capital be used on passive income? 

As described above, to earn passive income, usually each individual already has a specific plan, strategy, and goals to achieve. Therefore, when you already have active income, try to continue converting that income to certain assets, such as Bitcoin, gold, or stocks.

Then, what assets can be used as assets to later get passive income?

Buy Crypto!


One of the assets that many people are currently wading into is crypto currencies, such as Bitcoin and Ethereum. Both assets can be said to be the top crypto currencies when viewed from their market capitalization. What's more, Bitcoin itself was a pioneer in this crypto industry.

By buying crypto as an asset, you only need to keep it for some time until its value rises or with some other strategies such as staking and yield farming. 

Staking and Farming Crypto Assets


If you feel, simply storing crypto currency alone is not enough. You can do other strategies recently offered within the crypto currency industry with DeFi technology. 

It is called staking and farming. Both provide an opportunity for crypto asset owners to earn passive income in the form of other crypto currencies with crypto asset capital.

This system actually has the same concept when you invest in the form of deposits in banks or ordinary cash systems. From the money you have, you will get interest from the bank.

The difference is that staking and farming is done using technology called Decentralized Finance or decentralized finance with smart contract systems within DeFi platforms. 

Each platform has different policies and return results. However, some of these platforms promise returns of up to 5-10% per year according to the liquidity you provide into the set in the protocol.

Want to know more about staking and farming? You can continue to pantengin Daily Coinvestment Articles! Make it your active income into passive income right away!


 

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