What is Passive Income and How to Choose It

Working in general today until retirement is not the only way in life. Passive Income is a method to generate sustainable income. More and more people are choosing to share their energy, combining Active Income with streams of income that do not require frequent checks. This article will help you understand the differences between each type of income and gradually find out which path suits you best.

What is Passive Income? - Real cash flow, not a promise

If you’re still confused about What is Passive Income, simply think of it as money that comes in regularly, whether you’re at home or doing other things, such as renting out a property that continuously generates income each month, or dividends from stocks paid periodically.

In fact, Passive Income arises from holding assets that “work” for you—copyrighted goods (ebooks, images, music), or tangible assets (stocks, land, money) that can generate ongoing income.

3 Types of Income Investors Should Know

1. Active Income - Money for effort

Income from work, whether contractual jobs or regular salaries. When you stop working, the income stops too. Like a water pipe valve—if you turn off the water, nothing flows.

2. Passive Income - Money waiting

As mentioned earlier, even if you don’t work, money still comes in. This allows you to combine Passive Income with Active Income simultaneously.

3. Portfolio Income - Earnings from trading

One-time profit from buying and selling stocks or profits from selling investments. These can be repeated but are not automatic. Dividend returns from stocks can be considered Passive Income, but

8 Real Ways to Collect Passive Income

Country 1: Dividend Stocks - 6-8% annually

Buy stocks known for consistent dividends. You receive payouts every year. Some stocks may yield 6-8% per year. Additionally, you can gain Portfolio Income if stock prices increase.

Advantages: Good returns, liquid, easy to buy and sell on the stock market.

Considerations: Stock prices fluctuate; 10% withholding tax applies.

Country 2: Crypto Staking - High returns but high risk

Deposit cryptocurrencies into a pool to earn returns, ranging from 3-5% up to several tens of percent. But the risk is high—if the pool fails, you could lose all your money.

Advantages: High returns, easy to operate via platforms.

Considerations: High risk, unclear tax implications, not suitable for beginners.

Country 3: REIT - Invest in real estate without owning property

Buy REIT units (Real Estate Investment Trust) instead of purchasing land yourself. The trust distributes rental income from properties to unit holders. Types include office buildings, hotels, infrastructure.

Advantages: Low investment, easy to trade, diverse options.

Considerations: 10% tax withholding, unit prices may fluctuate.

Country 4: Rental Properties - Continuous cash flow

Own a house, condo, or rental space to generate regular income. Plus, property value may appreciate over the long term.

Advantages: Quick Passive Income + Portfolio Income from the first month.

Considerations: Need property first; if no tenants, no income. Maintenance costs apply.

Country 5: Fixed Deposit - Safe but low returns

Deposit money in a bank, earning interest upon maturity. The simplest and safest method.

Advantages: No effort required, guaranteed returns, predictable.

Considerations: Requires substantial capital for worthwhile returns. Interest is taxed at 15%.

Country 6: Bonds / Debentures - Fixed interest

Buy bonds from government or private entities, earning interest at the Coupon Rate specified. If the issuer has high risk, interest rates are higher accordingly.

Advantages: Steady returns, higher than fixed deposits.

Considerations: Requires large capital, interest taxed at 15%. If the issuer defaults, you may lose your investment.

Country 7: Creating Copyrighted Works - Zero investment, lifelong income

Write ebooks, take photos, draw, create templates, sell on platforms like Shutterstock, Amazon, Canva, or YouTube, Facebook. One-time effort, ongoing income.

Advantages: No need for large investment, can do what you’re good at, long-term Passive Income.

Considerations: Platforms take a share; you receive only a portion.

Country 8: Savings Insurance - Savings + insurance combined

Pay premiums to accumulate money. Upon maturity, receive principal plus 2-3% interest annually, along with life insurance benefits.

Advantages: No effort needed, insurance benefits, no 15% tax deduction.

Considerations: Requires significant funds, long-term savings, lump sum received at maturity, not periodic payments.

Comparing the 3 Types of Income

How to choose for Passive Income that suits you

1. If you have no capital → Create copyrighted works (ebooks, images, templates) starting today.

2. If you have some savings → Invest in dividend stocks or REIT.

3. If you own real estate → Rent it out for continuous income.

4. If you want safety → Fixed deposits or bonds.

5. If you’re willing to take risks → Crypto staking with high returns.

Passive Income is long-term, not a quarrel

Passive Income is the key to reaching your financial goals faster, without relying solely on Active Income. Today, there are many options—from no capital needed to high investment and expertise.

The important thing is to choose according to your initial capital, acceptable risk, and available time. No need to copy anyone; everyone has their own path to wealth. Passive Income is just a tool in your hands.