Truly Understanding "Passive" Income

in LeoFinance12 days ago

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Everyone talks about the famous passive income and to build streams of passive income so you never have to work again in your life.

While there is some truth to this there is another which is not often talked about.

Passive income is not passive. It's simply making your money/investment work for you which still requires some level of management. There will as far as I'm concerned never be something that is truly passive in terms of setting it and forgetting it.

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The Old

I dedicate this section to old ideas of passive income. The things such as 401k's, IRA's, Stocks, Bonds, Savings accounts and so forth. These systems are GREATLY obsolete and the "passive" nature of them often under performs to such an extent that you actually now LOSE buying power over time.

These old methods have been sucked dry from mega corporations and those cycles have now run dry enough to the point people are moving on.

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The New Way

Which leads me into the new way. The new ways of making real wealth and passive income. May of which mimic the old ways but start to bring power back to people and smaller groups instead of massive corps.

This year alone we saw one of the biggest movements ever towards crypto and deactualization. It was this movement that sparked massive rallies and with it new ventures.

PoS - Proof Of Stake / DeFi
Is one of the easiest forms of passive income. Yes it takes some work to setup and yes it takes funds to setup but ones it's moving it starts compounding like crazy. For example RDD Reddcoin. For every block you mint yourself you get roughly 747 Redd worth about $6. It might not seem like much but when you start minting 2-3 a day or more and those newly minted coins start working for you in the PoS system as well you continue to compound earning you more.

I like at PoS as really being one of the first DeFi systems. Invest money in and earn more tokens out by depositing and holding them in your account. The nice thing about PoS over DeFi is that you are fully in control of the wallet as long as you are minting yourself and not using a 3rd party system.

Now don't get me wrong DeFi can be highly productive as well. Such as CubDeFi

As long as you are working with a trusted provider and a project you believe in you start to mitigate the risks. While you're not in control of the wallets you do have the ability to withdraw at any point in time out of the DeFi program if yo wish. You also near a native token of theirs which is the acting passive nature of the project.

Curation and Hive/ Tribes on the Hive Network

Curation takes time however it in turn is rewarded by roughly getting a 6- 13% APR on your investment for your time. While this might not be much for a smaller account it can mean hundreds a month for a larger account. While not "passive" in nature the passive aspect comes from the interest earned on both HBD and HIVE itself.

While most tribes don't pay a interest on the tokens you hold they do offer something else which we will get into next.

Crypto Miners and Hive Miners

This has to be one of the most passive ways to earn here on Hive. Miners here work in a way that you simply buy and stake them. You have no power costs and you could unstake them and sell them for a possible profit later on depend on your buy price.

While miners such as POW (Proof Of Work) require setup and maintenance it still provides a passive aspect to earning.

So get out there and start earning that Passive income. While it's not really "passive" it does require less work and you make those earnings work for you. This is the passive aspect of passive income that many fail to mention.

What ways are you using to earn passive income with crypto? Let me know in the comments and if you have any ideas yourself for making more passive income from Hive and crypto.

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I also like passive income tokens like BRO, Utopia and Dhedge. Each of these give dividends just for holding them in your wallet. No staking needed.

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Have a number of those myself. I play it depending on the price of their token compared to the miner and figure out at the time what one is a good deal. You'd be surprised at home much they move week by week.
I'd really love an easier way to find out exactly when is being paid out on each and what tokens. Utopia is about the only one I know for sure since it's just a weekly hive payment lol

Yes, it is quite hard to find the exact apr. As it also depends on their curation rewards usually.

The best tool I know is from @amr008 https://hivelayers-stats.herokuapp.com/

Ah good stuff I had forgotten about this site thank you

You're welcome :)

Oh man oh man....Speaking my language here!

So exciting to think of the 'future' and how's were generating our own wealth here.

401k's be damned!!

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Seriously though imagine locking up all of your money and never being able to touch it because it's in a 401k or if you do touch it getting penalized for it. Sounds pretty freakin dumb lol

Looking to turn my first earned dollar (active income) into a second dollar which hopefully continues to earn by themselves (passive income). Crypto has really paved the way for earning that second dollar passively compared to conventional methods. I'm happy to have jumped into defi with CubFinance and hope to learn more about this whole ecosystem (hive, curations, content etc)

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You'll get there for sure. It's always a big easier/ fast track if you're able to invest even a little. I would never suggest investing something you can't afford to lose though as you need to always take care of yourself first.

Thank you - it's been a steep learning curve, but I am investing quite heavily as well, hopefully will see the compounding effect in the long run :)

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I like the daily drips of fractional tokens tied to DHEDGE, BRO, LIST and COM. Tokend beget tokens on a daily basis and accumulate over time. One setup, I juts keep staking and compounding all gains made as a result of holding crypto.

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Those are good options as well for sure I see them being a little bit LONGER of a hold compared to buying the miners out yourself. If you can get them at the right price that is. In some cases it can be cheaper to pick up the DHEDGE BRO etc instead of the miners. Just have to watch the markets.

Do you know what COM pays out?

I do have miners, LEOM and LEOMM, some that I bought last Spring when LEO was cheap, among others. I continue buying portions with the tokens generated when creating content. I power up most of it and buy on hive-engine with the rest. For staking LIST, you get COM. COM generates fractional shares of CTP, LIST, WEED and SIM. Combine that with DHEDGE, daily SIM output from dCity, BRO and LBI and you've got a daily "crypto rain" that can nourish your account.

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I've never gotten into buying the crypto and hive miners here—they always seemed like a gimmick, without me doing any sort of investigation. Isn't buying such a thing the same as staking and receiving APR from the stake?

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It's often used as a way to raise funds for the project but yes stake and earn APR from them. Consider it an investment into the platform just like you would buy a stock with dividends. It is still in your best interest to use those new minted tokens and want the community to thrive as you have a vested interest in the platform as a token and miner investor.

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Putting in the work I will always be fine with, it’s just figuring this stuff out; but at the end of the day - I have to work at it to understand it. Never heard of Reddcoin 😳 Thanks @bitcoinflood for giving me something to read up on 😜

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RDD or Reddcoin is a social media rewards project that most people thought was dead. It's been bouncing around $0.01 but I have a feeling as long as we continue on this upward trend it has a very real possibility of being $0.03 - $0.05 yeah doesn't sound like much I know but it's because you can mine so freakin many of them lol I've seen some new projects and interaction from there team there as of the last few months which has me stacking it. Granted I did buy them about 4 years ago around the 2017 sell off.

Keep learning every day Jimmy and keep putting in the work and quality :)

Yes it is special fun
I just published my experience with CUB and how it turned 17 into 51, triple in 3 months
The most important thing is continuity

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Awesome! Are you still stacking the cubs ?

This is great content! Going to be doing a little reblogging for the greater community!

Passive income is not passive. It's simply making your money/investment work for you which still requires some level of management.

So true. My so called passive income is taking way too much time to manage than I'd like. I'm spread too thin at the moment with too many things to manage but I'm trying to consolidate.

Problem is, for every one thing I get rid of another 10 opportunities arise to tempt me. 😂

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The only way to scale and save time is by working those "passive" income streams otherwise you are simply trading hours for dollars which can't be scaled as you only have so much time.

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Such a good point that earning 3.1% in a fiat saving account when the currency in devaluing at a faster rate doesn't earn you anything... it's a loss.


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If only they paid you 3.1% lol now they pay you 0.5% or worse

... and the spending power of the dollar cuts in half every 5 years... and accelerating.

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Yay! 🤗
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Great write up! This is definitely great content for the Coin Logic audience! Reposting and it will show on the curated feed on https://coin-logic.com!