The Pros and Cons of Passive Income: Is Passive Income Good?

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In the overview of passive income, we learned what passive income is, why it’s dreamed of many people and some of the broad examples of it. In this article, we will now give out the pros and cons of passive income. In addition to that, we will also discuss how it can benefit us as people.

As mentioned in the overview, we learned that a lot of people want to earn through businesses and generate passive income. Not just because of the laid-back feeling it gives but also because of the flexible and lucrative chances that it gives to its owners. In this article, we will take a look at the advantages of having a business with passive income. Moreso, we will also discuss the negative aspects that it can possibly give us.

Read: 21 Home-based Business that Filipinos can do

What benefits does passive income have?

It can provide financial freedom

One of the main advantages of generating passive income is that it has the capability to provide financial freedom. Once it stabilizes and that it becomes successful, you can be worry free because you will have a lot of time to work on other things. In the long-run, it reduces the stress that businesses usually give its owners.

Passive income is standard and constant

Since it’s an asset that can give us a regular and steady source of income, it’s something that we can count on. Although that might not be the case in the first few months or years of the business, it will provide a steady stream of profit that does not require hours and hours of work.

You can look at it as a good retirement plan

Say you start out a room or a piece of land for lease, even after you retire, your piece of land or your room will still be used. In conclusion, even after you retire, you’re still acquiring profit. It’s a good investment plan until you retire because it brings in profit at a standard and steady rate.

The opportunities are vast and immeasurable

Having a business that earns you passive income is not just lucrative, it’s also limitless. As long as you focus on your goals and in growing whatever you’ve put up, the sky’s the limit and it can not just make you rich, it can bring you a fortune you’ve never imagined.

The pros of businesses and passive income is too good to be true because it is. You just have to ensure that you keep your eyes on your goal and that you won’t give up when times get rough. Now that we’ve covered what the main benefits of it are, let’s go to the not-so-good things.

What disadvantages does it have?

It can cost a lot of time when you start

I know that we said that it can save you a lot of time in the long-run but when you’re just starting, you’re just another regular business man. No business starts alone by itself and it won’t grow without utmost care and supervision. You need to exert time, effort, and good decision making when you’re starting a business.

It’s high-risk

Just like any other business, it imposes a high risk. Like stocks, the higher the risk, the bigger and better the return of the investment. Although there’s no assurance that your business will be successful, when you properly manage and run it, it will go a long way.

Read: DTI Business Name Registration Online – Requirements and Procedure

You need a lot of attention in its early days

There are businesses wherein you need a lot of attention to ensure that it will become successful. Moreover, you need to have a keen eye on it for its best growth and development. You might be surprised by its returns if you properly manage it.


Capital and time are kind of inverted. Let’s put blogs as an example. Setting up a website does not require a fortune for you to start. However, you need a longer time in order for it to start gaining profit. Whereas an apartment, you need a high capital to start reconstructing the apartment but it gives you profit right away.

The negative aspects of having a passive income stream of profit are not that heavy, however, they’re important especially if you’re looking at it as a retirement plan or as something that would make you rich. You need to take all of these into consideration because it can make or break the plans that you have.

Now that you know the pros and cons of having passive income as a fall on profit, you can weigh whether or not this is for you. As a matter of fact, with these in mind, you can play with how you want your business/es to start.

Read Also: How to Invest or Buy Stocks in Philippines Stock Market

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