Why is passive income important?

So why is passive income important? When we work for a salary, what we're really doing is we're trading time for money. Therefore, if we want to make more money, we have to spend more hours working. The problem with this is that since there is a limited number of hours a day, there is a limit to how much money we can earn by trading time for money. There are only 24 hours a day, and nobody works 24 hours a day. Give it a try and see how long you'll last.

The most important concept of passive income is that you only do the work once and it generates a continuous stream of income. Want an example?

Think of your favourite singer. S/he records his/her album once but as long as the CD sells, s/he will earn a royalty. Do the work once and enjoy a continuous stream of income. Do you know that Elvis Presley earns more now that he's dead than when he was alive?

Novelists like John Grisham (BTW, not a favourite but his name just pops up in my mind), for example, writes his novel once. As long as people buys his novels, he earns a royalty. His novels are sold worldwide. Just imagine how much money the guy's making.

"But I can't sing, and I can't write a novel... how am I going to create passive income?", I hear you protest. Aaaah... stay tune for the answer. ;-)