[m8547's Reply #3 on: November 11, 2015, 09:15:43 PM
in my topic - but where is the
permalink? - made me thinking into asking this question]
The famous saying (by Warren Buffett, and, perhaps, others) goes like this: work for free on what you like, then ask money for it. Alternative version: if you work on your passion, on what you like, you really never have to work in your life. Think our father, MMM; he still earns money for this, but he is just doing it for fun now.
The definition of passive income?
Selling ebooks on the Internet (as popularized by many), for example, is definitely not passive income in my books. Especially if you want to be the best in the world. On why being the best in the world matters, check out Seth Godin's great little book,
The Dip: A Little Book That Teaches You When to Quit (and When to Stick).
Investopedia's definition, for reference:
Earnings an individual derives from a rental property, limited partnership or other enterprise in which he or she is not materially involved.
I don't agree with this definition:
- If you treat your rental property business seriously, you Airbnb your properties. If you treat Airbnb seriously, it's almost like being a hotel manager, with good marketing, customer service; far from being passive, but can be fun and profitable, though.
- You always have to worry about whatever business or limited partnership you have invested into; I mean, that's the point of a diversified index fund portfolio; that you do not have to worry.
And I think that, the diversified index fund portfolio is
the only vehicle where you don't have to worry about it. You don't have to worry = my definition of passive income. Tell me if you know of others. I'm interested.
Your take? Or the definitive word on the subject?