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Active versus Passive Income – What’s the Difference?

Filed Under: Growing Your Business

For the rest of the week, we are going to look at active versus passive income. Most Silhouette and Cricut small businesses are classified as active income businesses, but there is no reason that a small business owner can’t also collect passive income.

What is the Difference Between Active and Passive Income?

Active income is income that you receive for selling a product or a service. Typically, you are “hands on” (hence, active) when you earn active income. Here are some examples of active income:

  • Working a 9 to 5 job is considered active income. You receive money for completing tasks.
  • Selling at a craft show is active income, you make products, set up shop, and sell products to customers.
  • In general, selling online is active income because you create the products, market them, answer customer questions, and package and ship them. There is a component that is passive, because if you sell online – you are often making money 24 hours a day, 7 days a week.

In contrast, when you earn passive income you are generally “hands off”. You are not doing anything for the money. Here are some examples of passive income:

  • Investments are passive income. You invest one time and receive income based on that investment.
  • In the craft world, cut file designs and ebooks are generally considered passive income because you design or write them once – then sell them digitally which is hands off.
  • Silhouette and Cricut small businesses can take advantage of affiliate programs to earn more passive income. This style of program works by using special links that a company has given to you to promote or suggest their products.

In my mind, there is nothing better than passive income to accompany the active income you are already making. Now, why did I tell you all this? Tomorrow, we are going to talk about affiliate programs.

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Active versus Passive Income in Your Silhouette or Cricut Craft Business - What's the Difference? - by cuttingforbusiness.com

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Cutting for Business is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com and affiliated sites. See the disclosures page for full disclosure information.


« Can You Use Fonts that Came with Your Computer for Commercial Use?
How to Earn Affiliate Income in Your Silhouette or Cricut Business »

Comments

  1. Becky steele says

    February 21, 2017 at 2:14 pm

    I love your blog. The business aspects are very helpful and refreshing.

    Reply
    • Christine says

      February 22, 2017 at 9:46 am

      Thank you, Becky!

      Reply
  2. Toni says

    February 24, 2017 at 12:07 pm

    You are very inspiring! Thank you for your Blog! I love it!

    Reply
    • Christine says

      February 26, 2017 at 2:52 pm

      Thank you Toni, I appreciate it!

      Reply

Comments on Cutting for Business are moderated before posting. This ensures that this blog does not get overrun by spam or inappropriate comments. Please allow up to 7 days before you'll see your comment. Thanks, Christine

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