Surely you have already imagined what it would be like not to have to work and still earn money. For many, this is a daydream that could never become reality.

However, this idea is not that far from what is feasible. For this reason, we would like to discuss the idea of passive income with you in this article.

What is passive income?

To understand the concept of passive income, you first need to get to know its counterpart. The vast majority of you are probably also familiar with this version.

An active income comes from a person’s work. In this case, the working time of the employee is remunerated with a certain hourly rate. This is how most people earn their money. The big problem arises when you realise that time is very limited and certainly many of you can find better uses for it than working.

In most cases, passive income is generated in return almost without the contribution of a person. Thereby, passive income does not depend on the amount of time you invest, but for example on your invested capital. In this way, you receive an income without spending a significant amount of time on it, which allows these emoluments to be classified as passive.

This whole concept is based on the ideas of many financial experts. One of the pioneers of these methods is Robert Kiyosaki with his book “Rich Dad – Poor Dad”. In this book, Kiyosaki describes the difference between his father (poor dad) and his mentor (rich dad), and the concept of passive income is expanded by other concepts, such as those of assets and liabilities. This book was a real influence to us starting our own business, Pillar-X Limited, which was formed in 2020. Investing in real estate is our passion and our business is going from strength to strength with this year employing our first employee.

How do you generate passive income?

Of course, the question that now arises to you is how passive income can now be generated. Perhaps some of you also have doubts about this idea.

But there are actually many ways in which you can build up a passive income. This can be done, for example, by building up a business, through shares or also classically through real estate (known as assets). In most cases, real estate is the most accessible option.

The concept of a property with monthly rental income is much more understandable to many people than building up a business or buying distributing shares. Basically, in this case, you invest your money in a property, from which you generate monthly rental income. This money does not come from your work, but from your capital.

In short you make your money work for you. As a result, your assets will keep growing without you having to invest more time. The time that has to be spent on managing a property can also be assigned to a property management company, for example, therefore reducing the amount of time needed to invest in property.

Of course, this is not free money, as you also have to consider the corresponding risks. Properties can remain unrented or lose value. For this reason, you should always act rationally, even when it comes to your dreams of a passive income.