Passive income has been one of the most debated and talked about topics during this pandemic. During this time, many people have realized that they need more than their day job to sustain their lifestyle. Or perhaps they were just worried about sustaining their lifestyle and looking to have a solid plan B in place. Or maybe you just had a lot of time on your hands being stuck at home and were doing research or trying new ways to earn income. Passive income or ‘side hustles’ definitely has become a buzz word. Just do a quick search on Google or YouTube if you don’t believe me!

But why is passive income important? The short answer is that it can give you: financial freedom, security, and stability. In other words, this is the best way you can improve your financial situation. But that is not all. Here are reasons why you should be making a passive income.

Freedom of time 

Time is always considered the greatest asset you can have. While money is quickly earned and spent, you don’t have that laxity when it comes to time. You can’t go back in time to relive past moments. This is where a passive income comes in to give you the freedom of time. When you are not under pressure to earn more because you have many income streams, you have time freedom. Of course picking up one side hustle or developing one new passive income stream won’t automatically give you that freedom of time, but by starting now, and developing that passive income, over time it’ll grow and slowly start giving you more income which can result in more time!

Financial stability 

Finances can often add a lot of worry and stress to your personal live, and this can be multiplied when with partners and/or kids. Can you look at your financial situation and be confident that you have everything covered? That is the importance of passive income. Having different income streams allows you to weather financial storms with confidence. A lot of young professionals are looking into real estate (YoungMoneyFinance included) as a source of passive income. Daniel Summers of Evest offers many possibilities in the real estate industry that enable investors to diversify their investments and achieve financial stability. The more passive income streams you have (or even just one), hopefully the more confident you can be in your stability which can reduce stress and worry!

Reduced stress

Financial stability, security, and freedom reduces stress and fear of worrying about the future. When you have a passive income, you will (hopefully) be worried less about pending bills or how you will meet your financial obligations in the future. This aspect improves your confidence to face the future. It also reduces stress and anxiety. Alleviate your worries by having more than one income stream to achieve financial freedom and make your life less miserable. 

Freedom to pursue your passion

What would you do if money was no object? How would you spend your time and what would keep you busy? The chances are that you have something you are most passionate about but may not pursue it to time and financial constraints. Whether it is sports, art, or music, your financial situation should not prevent you from doing what you love. A passive income allows you to achieve financial and time freedom that, in turn, gives you the freedom to do whatever you love. 

Growth

A passive income removes the worries about meeting financial obligations in the present and future. This aspect allows you to think and explore better ways to make your life better. In other words, it raises your living standards. Diversified income streams are associated with personal growth. The time freedom that comes with passive income allows you to do other things that improve the quality of your life. For instance, you can easily explore activities that enhance your health or add to your financial growth. 

Ability to work or live anywhere

Many people are often confined in their current locations because they do not have another option. When you have a flexible income, you can choose where you want to live or work without any constraints. Nothing will hold you back. 

The bottom line

No matter your view on diversifying your income stream, passive income is always important. It gives you a lot of freedom, making you feel better about your finances, future, and life. That is why you should work to create more passive income or side hustles!

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