Expert: Gina Boykin - 7/27/2009

Question
Hi Gina
 I was wondering if you could tell me more about ''Passive Income'' I was told investing in real estate
- investing in shares - starting up an affiliate marketing program
- creating a blog and earning income from advertising. Is there other ways? As great as they sound,I wouldn't have the know how.And I'd rather do something that is more to my liking.

THANK U SO MUCH FOR YR TIME

Answer
There are three types of income: earned income, passive income, and portfolio income.

Earned income comes from a job or one-person small business.

Passive income comes from assets you've purchased or created and includes business income, real estate, affiliate marketing, and selling intellectual property (like patents). It could also include peer-to-peer lending, which has become very popular in the last few years.

Portfolio income comes from trading assets. Buying and then selling for a profit paper assets (like stocks and bonds), real estate, collectibles (like antiques), or any other assets.

There are advantages and disadvantages to each type of income.  You'll have to weigh them to determine which category you want to pursue.  

From there, you can begin to learn about all of your options in that particular category.  For example, you may be able to be a business owner where you can capitalize on the skills you already have...a technical person could have a side computer repair business.  You may be interested in affiliate marketing for the right product...something you use regularly or absolutely love.  You may like antiques but not stocks.  Anything you select will require some financial education, which is easy to do these days for free on the web or at the library.