Melvin Feller Defines Passive Income
Melvin Feller Defines Passive Income
Melvin Feller Business Consultants Group Ministries in Texas and Oklahoma. Our mission is to call and equip a generation of Christian entrepreneurs
to do business as ministry. We provide workshops and resources that
help companies discover how to do business God’s way. When the heart of a
business is service rather than self it can be transformed into a
fruitful ministry. Melvin Feller is currently pursuing another graduate degree in business organizations.
I
prefer to define passive income broadly as revenue you earn even when
you are not actively working. Another name for passive income is
residual income.
By
contrast, active income is money that stops coming to you when you stop
working. If you are paid a salary and you quit your job or are laid
off, most likely you will stop being paid. You may get a severance
package to help you transition, but your boss will not keep paying your
salary unless you keep showing up for work.
Similarly,
if you do contract work for clients who pay you, and if you will stop
being paid if you stop doing this work, that is also active income. You
may have more flexibility with contract work, but you still have to do
the work to receive your payments.
With
passive income, you would keep being paid whether or not you do any
meaningful work. You may do a lot of work up front to get the ball
rolling, but eventually you reach a point where the passive income
stream is activated. At this point, you can essentially stop working on
this income stream if you so desire and more money will keep flowing to
you through this stream regardless what you do or do not do.
Passive
income does not mean one-time lump sum payments such as an inheritance
or the sale of an asset like your home or some stock you own. Passive
income is a source of income with some sense of continuation over time.
Passive
income does not mean permanent income. Some forms of passive income may
last a few years. Other forms may keep going for decades or even for
centuries across multiple generations. Nevertheless, all forms of income
eventually dry up for one reason or another.
Passive
income does not mean 100% secure income. As Helen Keller wrote,
“Security is mostly a superstition.” Some forms of income are more
secure than others is, but there is always a risk element. For any
income source, there is a non-zero probability that something could
destroy it. This is one reason it is often wise to create multiple
streams of income, so you can reduce the risk that all of them will fail
simultaneously.
Passive
income does not mean perfectly 100% passive with no maintenance
required. With any income source, you may need to do a little
maintenance to keep it going. Sometimes this is easy and only involves
checking your mail and depositing checks. Sometimes it is even more
passive when the money is deposited directly into your bank account
every month. Then you may still need to report this income and pay taxes
on it.
Passive
income is really a spectrum of possibilities. Some income streams are
very passive. If you do essentially no maintenance on them for years,
the income will keep coming.
Other
income streams are semi-passive. You may need to do some work to
maintain them even if you are not working for a salary. For example, if
you own a house and rent it out, you may earn passive income as rent
payments from your tenants. However, you may also need to invest some
time, energy, and money to maintain the property, to find new tenants
when the place goes vacant, and to handle the mortgage, insurance
payments, and property taxes. If your tenants get ornery or become
delinquent, you may need to do even more work. You may delegate much of
this work to someone else, but then you have a business partner or
employee to manage instead.
Passive
income does not mean it is passive for everyone. There may be other
people with regular jobs who do some of the work that enables you to
receive passive income. You may also leverage technology to do a lot of
work for you. The level of passivity is perspective dependent. One
person’s passive income is another person’s active income.
I
also want to distinguish passive income from what I will call moocher
income. Moocher income is what people try to earn when they succumb to a
get rich quick mindset. This is an undisciplined attitude that seeks to
get something for nothing. The idea is to find a way to mooch money
from people or the economy without providing any meaningful value. It is
possible to generate income this way since markets contain plenty of
inefficiencies, but it is not an approach I recommend. I do not
personally define passive income to include moocher income, but there is
a spectrum here where some forms of passive income deliver more value
than others are.
I
intend to help you create passive income in a way that generates good
value for others. This is more sustainable in the end, and it is better
for everyone. Fortunately, there are many ways to create value.
Creating
passive income streams is work. You can meditate on abundance, invoke
the Law of Attraction, and pray to Hestia all you want, but also expect
to do some real work if you are going to make passive income a reality
for you. Creating streams of passive income is a very active endeavor.
You must do the work first; then you can enjoy the results.
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| Melvin Feller Business Organization Graduate Candidate and Business Coach |
Melvin Feller Business Consultants Group Business Ministries in Texas and Oklahoma.
Melvin Feller founded Melvin Feller Business Consultants Group
Ministries in the 1970s to help individuals and organizations achieve
their specific Victory. Victory as defined by the individual or
organization are achieving strategic objectives, exceeding goals,
getting results or desired outcomes. He has extensive experience
assisting businesses achieve top and bottom line results. He has broad
practical experience creating WINNERS in many organizations and
industries. He has hands-on experience in executive leadership,
operations, logistics, sales, program management, organizational
development, training, and customer service. He has coached teams to
achieve results in strategic planning, business development,
organizational design, sales, and customer response and business process
improvement. He has prepared and presented many workshops nationally
and internationally.
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