Posted by: kamaruzamanomar | July 26, 2008

Why Passive Income Is Better Than Earned Income

I’ve read Robert Kiyosaki’s book Retire Young Retire Rich, a present from Jaslinah to my wife during our JABS seminar. A very good book for those who would like to quit from the makan gaji and move on into entrepreneurship. Whether you want to become a Unit Trust Consultant, Insurance/Takaful Agent or other Network Marketing business, it does not matter. What is important is the experience that you will go through doing your own business. The good thing about joining the business above is that they will give you the time as long as you wish and the capital required to join is usually very low and sometime it is even FREE like our unit trust company. Therefore the risks are minimal or close to ZERO.

The difference between earned income and passive income is that:

Earned Income

active income which mean you have to be present doing the job
you work you get pay. No work no pay
you get paid only once
Passive Income

income that you will get even when you are not there
no work still get paid
you work hard in the beginning and get paid over and over
If you are given a chance assuming everything being equal. Let say you are fresh graduate. You have been given RM2000 per month enough for your food etc for 12 months. If you go for earned income, you work for corporate with RM2000 per month. At the end of month 12, your income will be RM2000 per month.

Now if you choose to build your passive income, let say you join unit trust industry. Your first 3 month income is about RM2000. This is still the earned income. But for the next three months your income will be RM2000 (your active income) plus with RM500 (your passive income based on your own sales as well as your downline sales). To cut short the process your passive income will grow exponentially over the time. Therefore ultimately the percentage of your passive income will surpass your active income to the extent of 90:10 ratio. That is why you see many of senior unit trust consultants or senior takaful agents or senior MLMers are not in desperate to find new clients as well as new agents.

Imagine the CEO salary of RM70,000, if they quit or retired, they won’t get that RM70,000 over and over. But for unit trust consulants that have created many group agency managers, they will still received the money from the group sales even if they only produce minimum quota requirement. So that is a huge difference. Furthermore, the income can be inherited to your beneficiaries.

Thus, we encourage you all to start thinking of building your own PASSIVE income rather than other people passive income. You must aware that we are moving from industrial age to information age very rapidly. So does our thinking. If our thinking is still in the industrial age and don’t want to change, we will be lacking far behind. This era is the era of entrepreneur or home-based business, where you see many people started to build their own business from the back of their house or domitory.

Any Enquiries, Please call / sms / e-mail
019-2828 264


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