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Active vs Passive Income: Differences and Exploring Opportunities in both

Active income Vs Passive income

What is active Income? 

An active income is money made from selling goods or performing an actual service. These come in salary, wages, tips, commissions, profits from selling a good, and cash from rendering a service. Like the word ACTIVE, an active income comes from actively doing something. 

Generally, staff at company X working 8 hours a day and getting paid about 5000 dollars a month earns an active income because he has to be present on the job to make that. In the case of a structured working system or personal business, the worker can only increase his pay because of a promotion or if the self-employed person doubles sales or the speed of working within that same time. 

A person earning an active income can only make as much as what the job or service offering can provide, and if the individual stretches beyond the limits of their strength, they might spend all their income on healthcare. 

What is Passive Income?

Passive Income

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Passive income, earned ‘passively’, is a lucrative way to make money. Unlike active income, which demands your constant presence, passive income often requires minimal or no direct involvement. 

Money generated from property rentals, intellectual properties, and streaming royalties are all examples of passive income. The beauty of passive income is that it can generate significant wealth without the need for physical labour. 

Whether a business is considered passive or active income depends on specific criteria. For instance, if a business owner works less than a hundred hours, the Internal Revenue Service (IRS) categorises such earnings as passive income. This distinction can help you understand your income type and plan your financial strategies accordingly. 

Difference between Active and Passive Income

  1. A person making an active income is actively working to make money, while passive income makes money for a person without needing that person’s presence at all or for so long. 
  2. Active income is ‘time-bound ‘, meaning it is earned within a specific period and requires physical presence on the job. In contrast, passive income is not time-bound; some passive income streams can continue to produce even after the original earner’s death. This distinction in income types can significantly impact your financial planning and long-term wealth accumulation.
  3. Active income earning is almost instantaneous, while passive income takes time. 
  4. Active income usually does not require initial capital; even in that case, it’s less capital-intensive than some passive income.
  5. An active income is entirely predictable and reliable, but with most passive income, you cannot outrightly dictate your possible income. 

5 Passive Income Options in 2024

  • Housing/Property rentals 

This is an expensive option for passive income because it will always require some massive amount of money to build, buy or mortgage a house for rental. However, some other options in rentals can earn you passive income, even in the real estate sphere. Connecting House owners with those seeking to rent can even be a great way to earn passive income. Throwing up an advert online for someone who wants to offer their house for rent can make you a commission. 

  • Creating a digital product

In our digital age, the potential for growth and scalability in passive income opportunities is immense. Products have evolved beyond physical goods, with some of the wealthiest individuals today selling virtual products. Creating digital products like Stock Photos, Online Courses, E-books, and Music can significantly earn a substantial passive income, with the potential to grow and scale over time. 

Passive Income selling E Courses

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Here are a few websites to upload stock photos and music – Create your website, Adobe Stock, SmugMug, Shutter Stock, Alamy and Fotomoto 

  • Create affiliate or referral links

If you have a large social media following or even a few thousand followers who trust and are loyal to you, you can upload affiliate or referral links on your social media handles. If your followers click these links, you can earn some dollars if they buy or subscribe to any package. 

  • Investing in your friend’s new company

If you have an enterprising friend who is building a business or wants to scale up their company, investing hundreds or a few thousand dollars can earn you a fortune. In the 21st century, companies have risen to become global conglomerates in less than 20 years. Such an investment might be a short-term investment in the long run. 

  • Creating Videos on social networks with partnership programs

If you’re creative or enjoy sharing your thoughts, then uploading videos on YouTube or similar social networks can be a great way to earn money, with the potential for significant long-term benefits. In recent years, advancements in mobile phone camera technology have made creating visual content more accessible than ever. This could be the start of a long-term, lucrative passive income stream. 

Final Note 

Investing some of your money in passive income can help strengthen your passive income portfolio, and you might even be retiring sooner than you have imagined and just spend the rest of your life fulfilling your passion and travelling the world with your loved ones. If you find out that there is a specific passive income stream you would love to invest in, then do your research in that field, and after you have solidified your knowledge, you can begin to invest in it. 

Trademarks explained: description, legalities, and ways to implement them.

Why Trademarks

Have you ever wondered why businesses invest a lot of money in seemingly trivial things like a logo design, tagline, or slogan? They have discovered that creating an image or statement that resonates in people’s minds can be why their brands stand out amongst many other impressive competitors. This unique image or statement can be categorized as a Trademark. When you hear the name Nike, your attention is immediately drawn to its custom ticker logo. 

Brands have also discovered that once these marks, slogans or taglines become popular and gain traction, they can be used by other brands, and this will be a disadvantage for them– this is the reason for formalizing a trademark using a legal process that allows them to protect their intellectual property.  

What is a trademark?

Understanding the Process of Evaluating Your Statement of Account.

Statement of Account - Title Image


Have you ever received a paycheck or a sum of money from work, only to feel a few days or weeks later that you can’t account for your spending? You might think your bank deducted cash and be unable to reconcile your expenses with your income. After reviewing your transaction history or statement, you realise you were responsible for all the unaccounted spending.

Your statement of account or a bank statement offers the perfect financial diagnostics. It’s like having a health report for your account, empowering you to take control of your financial health. 

The statement above is not an overemphasis at all; in fact, this is how successful companies and organisations have stayed afloat. They have been able to do so by constantly monitoring their account statements to ensure that they are always in profit

What is a bank statement of account? 

A bank statement of account, often referred to as a bank statement, is a monthly financial document prepared by your bank that shows the financial activity of a bank account holder for that period. Even though most banks prepare their statement at the end of the month, customers can request their statement of account through online banking or go to the bank to obtain a printed copy if they need it at any point in time. 

Statement of Account - Review

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In summary, your account statement is healthy or tends towards healthy if, after evaluating your opening balance, deposit and withdrawal, you are not in zero. 

The analogy above does not perfectly describe your financial health, but it shows you that at the end of the month, you probably could not account for any left which could be put into savings or investments. 

Cash Inflow and Outflow

More Money or Freedom? Pros and Cons of Salary and Hourly Income. 

Salary or Hourly pay


When choosing between a salary-job and an hourly job, people usually base their choice on their personal priorities and lifestyle choices. Both choices have pros and cons that can have a big effect on your financial stability and work-life balance. Knowing the difference between salary and hourly pay can help you make a decision that fits your career goals and personal situation.  (Salary or Hourly Pay Employee).

Who earns a Salary?

An employee earning a salary, such as a marketing manager at a large corporation, enjoys the security of a fixed income, either monthly or, in some cases, yearly. This salary is paid consistently every two weeks and can also be calculated annually for a broader perspective. 

Salaried employees are often referred to as full-time employees and are continually enrolled in the company’s benefit schemes, such as health insurance, leave bonuses, and access to a dedicated working space.  

A salary earner receives the same amount each time the paycheck arrives, except the employer reviews the terms and conditions of employment. This also means that there is no hourly limit to working time. Even though most working hours will usually fall between 8:00 a.m. and 5:00 p.m., an employee is expected to be at work at all times, even if they are done with all the activities for the day or the monthly target.  

Who is an hourly employee?

An hourly employee has the flexibility to earn a wage based on the actual number of hours they spend on their assigned job/role. This freedom allows them to control their earnings, with each hour spent working contributing to their paycheck. 

Practically, if an hourly employee is to be paid 15 dollars per hour- then spending 20 hours at work in one week means that they will be paid 300 dollars at the end of that week for the job that has been done. I.e 

1 hour15 dollars
20 hours(20 hours)(15 dollars) 
Total300 dollars
Breakdown of Hourly Pay

An hourly employee might have varying paychecks depending on the hours committed to the work done. This is because the employer pays for the hours devoted to doing the work. Most employers agree with hourly employees on the maximum amount of hours they are expected to work, and demanding extra work hours will attract an additional amount to the agreed hourly pay. 

This additional amount often refers to ‘overtime pay ‘, and it is usually higher than the regular hourly rate. Most hourly employees will likely get extra dollars per hour for every overtime done and for coming to work during national and public holidays. 

An hourly employee is expected to use a timesheet or other register system to log their total hours spent during the work. This is a crucial part of the job, as it helps the employer keep track of the hours worked and ensures that the employee is paid accurately for their time. (Salary or Hourly Pay Employee).

Pros and Cons of salary and hourly pay 


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Being a graduate of a prestigious university and making a considerable income does not guarantee your financial safety. According to Parkinson’s law of spending, which states that expenses rise to meet income, people’s expenses will always increase proportionally to their income. This law validates the idea that people do not end up poor only because of the absence of money but also because of a lack of financial literacy. 

Financial literacy is the effective knowledge and understanding of using financial products, such as savings accounts, investments, and insurance, and skills, such as budgeting and debt management, to manage money and save individuals from financial unaccountability, fraud, and scams. 

To be financially literate is to have an intricate understanding of how money behaves; by doing so, you have established a life-long profitable relationship with money. Most people don’t get financially trained in college, but thanks to “Effective Business Idea,” you are about to gain the power to control your finances with a free financial education. 

The most fundamental knowledge you must acquire when working towards financial independence is the skill of budgeting. Budgeting plays a vital role in ensuring adequate money inflow and outflow, helping to increase accountability and prudence.  

What is a budget?

A budget is a planned estimate of anticipated income and expenditures for a certain period in the future, and it is created and reevaluated regularly. Everyone, from individuals to families of varying means, as well as governments and corporations, may benefit from developing and sticking to a budget.

Budgeting helps you control your monthly spending, prepare for the unexpected(rainy days), and buy luxury goods and properties without debt. Keeping a budget can be a smooth process; it doesn’t restrict you from buying what you want, but rather, it gives you the freedom to maintain a grip on your finances and a clearer picture of where your money is going.

Introduction to Budgeting

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8 Things to Avoid Spending Money On When Starting Your Catfish Farming Business: Practical Tips for Beginners

Starting a catfish farming business can be exciting and potentially lucrative, but it requires careful planning and smart financial decisions. When I began my own catfish farm, I made several costly mistakes that could have been avoided. In this post, I’ll share what I’ve learned about unnecessary catfish expenses and offer practical tips to help you succeed from the start.

Six Top Ways Artificial Inteligence Can Grow Your Small Business Enterprise 

Six Top Ways AI Can Grow Your Small Business Enterprise  cover title

Small and medium-sized businesses face many challenges as they strive to grow and stay relevant in today’s ever-changing business world. One key strategy for remaining competitive is adopting advanced technologies, with artificial intelligence (AI) standing out as a particularly important tool.

AI has become a top priority for businesses of all sizes. More than 50% of small and medium-sized businesses have already started using AI, and this number is expected to grow even more in the future. Even major companies like Amazon and Google are using AI to drive innovation and strengthen their positions in the market. We previously wrote a blog post on “Artificial Intelligence: history, impact and future expectations.

In this blog post, we’ll explore why AI has become so important and how it has the potential to completely change the way small and medium-sized businesses operate. We’ll look at real-life examples and the benefits of AI, showing why it’s not just a trendy term but a crucial tool for businesses that want to succeed in today’s digital world. 

From Polo to Profit: 6 strategic business lessons You can Learn from Ralph Lauren’s story and success of building a Luxury Custom Clothing Brand

Ralph Lauren is a popular fashion brand that has gained worldwide recognition for its classic designs, excellent craftsmanship, and commitment to luxury. He founded his brand in 1967 and has since grown into a global powerhouse. It offers various products, including clothing, accessories, fragrances, and home furnishings, and operates over 500 directly owned stores internationally. Recent annual revenue exceeds $6 billion.

Five (5)  Crucial Mistakes to Avoid as Your Business Grows in 2024

Medium shot of a business owner trying to grow his business 

Picture from freepik 

Entrepreneurs face challenges and opportunities every year, and it’s always good to be ready with the right strategies. This blog post discusses five (5) business growth mistakes business owners should try to avoid in 2024, drawing on the experiences of successful entrepreneurs and current trends. By following these strategies, you as a business owner are ready to experience business progress.

Read more: Five (5)  Crucial Mistakes to Avoid as Your Business Grows in 2024

Cement vs. Earthen Catfish Ponds: Which is Better for Your Aquaculture Business?

Cover imagery Cement vs Earthen Ponds

When I started my catfish farming business, I had to make an important decision: should I use cement or earthen ponds? At first, I chose a cement pond due to its reputation for offering a controlled environment and being durable. However, as my business grew and changed, I switched to earthen ponds. In this post, I want to share my personal experiences with both types of ponds, including practical aspects and nuances that could affect your aquaculture decisions (Cement vs. Earthen Catfish Ponds).

What is Concrete Cement Catfish Farming?

 Concrete Cement fishes inside water

Concrete cement catfish farming involves growing catfish in cement ponds instead of natural bodies of water or earthen ponds. These cement structures, often rectangular or square, are tailored to fit the size of the farming operation. The popularity of cement ponds in aquaculture is rising due to their efficiency and the increasing demand for fish protein.

Why I Settled for Cement Ponds Initially:

My journey as an entrepreneur did not begin with fishery farming. However, after running a customised sweatshirt business in school and freelancing after graduation, I turned to fish farming. My mother’s success inspired this decision in scaling her poultry farm and the achievement of a local earthen pond farmer near my house. I was encouraged by my family to venture into catfish farming and decided to construct a 500-square-meter cement pond at the front of our home.

This decision was strategic, as a cement pond was a better option for beginners in catfish farming. If there was a huge loss, our costs of setting it up would be reduced compared to renting an earthen pond. We also had the cement pond to ourselves, and it could be converted into other things. Additionally, it offered a high level of control over environmental variables such as water quality and temperature.

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