The importance of passive income

Passive income - make money while you sleep

The definition of passive income

Wikipedia defines passive income as “income resulting from cash flow received on a regular basis, requiring minimal to no effort by the recipient to maintain it.” They go on further to say:

“Passive income is generally defined as a stream of income earned with little effort, and it is referred to as progressive passive income when there is little effort needed from the individual receiving the passive income in order to grow the stream of income. Examples of passive income include rental income and any business activities in which the earner does not materially participate during the year.”

For most people, when they work for others in a regular job, they are paid an hourly rate. This is known as active income. When they stop working, they stop getting paid. Passive income turns that notion on its head.

Why is passive income a good thing to have?

In my view, passive income is the most lucrative form of income, because it just happens regardless of what you are doing. You might be on holiday, or you might be sleeping. But your passive income still keeps ‘working’ and generating money for you. Passive income allows you to focus on what you want to do in life, and lets you spend your time doing what you really want to do.

Passive income is still at work even when you're not

Passive income can be likened to a tap that you can turn on, and just leave running. This type of recurring income is the most sought after thing in the working world. Isn’t that everyone’s dream – to continue to earn money even when we’ve switched off? Earning while we are sleeping? On holidays? Out at breakfast? Playing with the kids? At the movies? I can’t think of a greater lifestyle choice.

The majority of people end up wasting time at a job they don’t love, because they don’t know how to set up this recurring, passive income.

The hard part is understanding that anyone has the ability to turn the tap on in the first place – many people think that only ‘other people’ can have access to a passive income stream.

Once people do understand that they can in fact turn on the tap, the next hard part is to get the money flowing from the tap. It doesn’t just happen – it takes work. However, when you’ve switched on the tap and it is actually starting to generate passive income, you leave the tap on and walk away. It will continue to earn while you’re gone.

You may even choose to add another passive income stream once your first is up and running. The most successful people often have multiple streams of passive income.

Why am I writing about passive income?

What prompted me to write this article was my feeling of delight when I woke up on Sunday morning. My websites had been busy all night, and when I picked up my phone I saw notification after notification that my website had been making me money. It was a truly great way to start the day, and it made we wish that everybody could access this same feeling as me. I went to breakfast knowing I was on the right track.

Passive income works when you're not

It also reminded me that the hard work I have been putting into my online business is having an impact. My online business is growing, and the hard yards to get it to where it is today are paying off more and more every day.

Ways to generate passive income online

Most people will say that the best way to earn passive income is by owning property. Whilst I can tell you from my own experience this is an absolutely great way to earn passive income, it is not readily achievable for a large proportion of people, so that is not the focus today.

You don’t need to have money to generate passive income online. The way to do it is by creating an asset that gets bought repeatedly by people. There are several ways you can do this.

eBooks and digital products

An example is an eBook. Whilst it takes time to write a book, once it’s written, it is written. It continues to get purchased and once the work is done, the book can be bought repeatedly for years and years to come.

You come up with an idea, such as a “how to guide”. Once you pick an idea, you write the book. You can create a book in your spare time by drafting it and adding to it when you have time. This is not hard to do – we all know how to write. We all know how to do something and have the ability to write about it how we do it. It doesn’t cost you anything to put it onto kindle. Sign up to become a kindle publisher – it is free. You need to make sure you have a great title, a great cover, and an awesome description. If they don’t want to click on it, they won’t want to buy it.

You can find out more about self-publishing eBooks with kindle direct publishing here:


You can set up a blog and include affiliate links to products within your blog. Like eBooks, it does take time to set up blogs and add content. However, once your site has some authority, posts that you write can generate income for years ahead.

You can also turn content from your blog into an eBook. That way, you can re purpose some of your content for a different audience without having to write it all from scratch.

Within the online community that I am part of, Wealthy Affiliate, I often see posts from people along the lines of ‘my website that I haven’t updated for over 2 years continues to make me money’! Sometimes people lose interest in their site and start a new site, but their old one continues to work for them in the background. Isn’t that cool?!

YouTube videos

If you’re an extrovert and love being in front of the camera, then YouTube videos might be for you. This is definitely not for everybody, but if it is, then go for it. There are a few ways you can make money on YouTube.

Here’s some great information put together by shopify about how make money on YouTube:

Choose the style of passive income that will work for you. If you like writing, then eBooks, blogging and affiliate marketing might be for you. If you’re great at talking in front of the camera, then YouTube videos might be a way for you to earn income.

Find out how I learnt to make passive income here:

Start your path to passive income today

Life’s too short to stay in a job you don’t like. It’s time to know that you CAN turn on the passive income tap. You CAN change your life. It will not happen overnight. It will take time, effort and dedication. Passive income requires work upfront. You need to remember the end goal – that you will be setting yourself up for a sustainable future. It’s all about working hard now, so you can reap the benefits later.

What passive income techniques have worked for you?

12 thoughts on “The importance of passive income”

  1. Great post. I’ve been trying to find some other way to create side income. Mowing lawns during the summer after a regular job takes so much away from the family. I always thought that creating blogs and using links , that you needed to be technically inclined and know your way around programs. This really sounds like something anyone could get involved in and make something of it considering they put forth the right amount of effort to get it started. Thank you

    • Hi Donald, yes, absolutely anyone can get involved and make something of it, provided they put in the effort. I wish more people would!
      Thanks for stopping by Donald and sharing your thoughts. I wish you all the best.

  2. Nice post! There are a number of ways to make a steady income online and I want to start branching out in different directions once I have a steady pace at what I am doing currently. I love learning all the different ways and experiences of making money online. It seems almost endless and can be a fun process the mind is put into it.

    • Hi Brandon, thank you! There sure are a few ways to make money online. I have found the best way is through affiliate marketing. And I do find it a fun process too.
      All the very best to you.

  3. I tried other passive income streams out there but I think blogging or having a website is the one that suits me. I am really not comfortable in front of the camera so I refrain from YouTube although I have created my channel. I tried also CPA marketing but I stopped since I spent more in advertising than what I earned. I found a platform that can turn your passion into an online business so I gave it a try. And I liked it. As additional passive income, I invested a small amount in bitcoin. Bitcoin is also I think a great source of passive income just make sure it is legit.

    • Hi Dan, I haven’t heard of CPA marketing but based on what you’ve said it doesn’t sound like I’ve missed much. I’m yet to try Bitcoin. I still don’t know how I feel about it, but I see others doing quite well from it.
      All the very best to you Dan.

  4. Loved this post! I hope someday I can get to the point where I make enough to quit my job. I would love to be able to spend more time with my family.
    I am writing blogs myself, but the idea of making YouTube videos does sound like fun to me.
    Thanks for a great article!

    • Hi Dan, I’m glad you enjoyed it! Thanks. Spending more time family is such a motivator for wanting an online career isn’t it? I know it was the driver for me. All the very best for your YouTube videos.

  5. Hi Melissa,

    This article on the importance of passive income is the route out of 9/5 jobs and minimal work – but only in time. First you have to heed the expert help and advice in this article and do the work first. I learned so much in this article despite my own time working online. I found that once someone gets really good at making their own website and getting traffic to that site, its actually a ton EASIER to get traffic on YouTube. YouTube is Earths second largest search engine and so it can’t be ignored.

    Thank you Melissa for your expert insight here today.

    • Hi Philip, thanks for your own insights. I’m lagging behind with YouTube myself, as I’m a massive introvert! Whilst there’s ways of making videos that don’t require you to personally be in them, I know they are more effective when there’s a real person backing up what they are saying. I’ll have to work on that : )
      All the very best to you Philip.

  6. I enjoyed your post and you made some very good suggestions. Too many people are looking for a get-rich-quick option without understanding how a passive income really works and having some patience. I started my journey a few months ago but already I am enjoying the training and learning all about internet marketing.

    • Hi Helen, I’m glad you’re enjoying the training and expanding your knowledge. It’s well worth getting that foundational learning so you can build a sustainable, online career. And knowing that it takes time and effort up front is important. I see people give up because they expect it work very quickly, and that isn’t reality. Wishing you all the very best.


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