Post
Topic
Board Economics
Re: Passive Income
by
deisik
on 12/03/2017, 07:28:57 UTC
A short definition of passive income according to Investopedia:
Quote
Earnings an individual derives from a rental property, limited partnership or other enterprises in which he or she is not materially involved
As I've seen recently on this topic that there's still someone who misinterpreting the real definition of passive income and uttering the thing that's out of context ( in this case, passive income ).
Doing tasks to get paid ain't considered as a passive income

Indeed, doing tasks for remuneration can hardly be considered a passive income

But, on the other hand, the definition that you cited from Investopedia is no less misleading (and you likely have taken it out of context as well). Really, if someone derives his income from an enterprise, how can he possibly be not materially involved in it? It is just this involvement there (material or not seems to be irrelevant here) that allows him to receive income in the first place. If you have nothing to do with some company, you can't get any earnings off them, obviously. In the same way, renting out property can only marginally be considered as passive income