Passive & Recurring Income: What’s the Difference?
We all know what income means. Income refers to money received in exchange for providing a service or when investing. This applies to both people and business entities. There are two types of incomes, Passive income and Recurring income. Let’s find out what is the difference between the two.
Recurring income: is the type of income where you need to be actively involved in order for the income to keep on coming. recurring income is created by acquiring assets that continue to give you profits. For example, if you own a flat and rent it out, your involvement is taking care of issues that arise at the property.
Passive income: although they are similar, there are some differences. Passive income requires little to no effort. Let’s imagine you have invested in the stock markets and you receive dividends from your investments. That is passive income. It requires no involvement, you only need to provide your details and the money flows in your account.
Both recurring and passive income have similar concepts. However with recurring income you have a little more work to do and you need to be more involved in order for the income to come in.
Let us say you want to receive £100 a month from either passive or recurring income, but not sure sure how to start? Here’s how: this can be through your work, for instance you are involved in some sort of network marketing activities, you keep working and the money keeps rolling in. This definitely has you involved as it is a hands-on operation.
There is also another way of looking at this, through a capitalistic point of view. Ask yourself this question “how much money would you need to invest in order to get £100 a month as passive income?” In other words how much capital is needed. Once you have determined how much capital is needed , which in this case it is £24,000. Your yearly yield would be 5%= £1200/year which then makes £100 a month. Keep in mind that each investment return might not be monthly. It can occur on a quarterly basis, twice a year or even once a year.
Alright so you’ve decided you want £100/per month in passive or recurring income, but how can this be put in place ? What can you do to make this happen? You need to look at dividend strategies. There are several strategies to look for such as the stock markets, however it is challenging to get the targeted dividend. It is not impossible, you could still get the 5% return but you would have to invest substantially more money. There is also real estate, which is excellent for achieving returns. At The Access Club, we teach how to do this. At the moment we have a great deal and this is the kind of yield to expect but also higher. Energy deals can also be rewarding, we will soon be introducing a deal, so stay tuned!
Of course all the above is easier said than done. It is not always easy to find the appropriate deals that will give you the return you want. Beware there are lots of scams out there, so it very important to be watchful of who you trust with your investment.
What is Holding you Back?
Sometimes it’s not the lack of knowledge that you don’t do something, you simply hold back from achieving what you want. It can be that you don’t know how to deal with excess money. Picture having a great financial year and you’ve earned a great amount of money, but don’t know what to do with it. Well this is where we come in. The Access Club can teach you, we can guide on how to invest and what strategies to follow that will give you the yields you want and more.
In most cases what is holding you back is fear. Fear of failing, fear of losing all the money and this comes back to knowledge. Once you understand what you are about to get involved in and study what it is about, it will all fall into place and the fear will decrease.