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Homeblogging7 Fantastic Reasons Why Passive Income Is The Key To Financial Freedom


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7 Fantastic Reasons Why Passive Income Is The Key To Financial Freedom


Passive income is the quiet secret of the rich. It’s how they stay rich. And by cultivating and maintaining passive income on a huge scale they have retained the key to untold wealth. It’s a key that’s been kept hidden until now. 

But how can any income be passive? There’s no such thing as a free lunch! Right?

Sorry but that couldn’t be further from the truth. 

Let’s take a closer look…

What Is Passive Income?

A passive income is essentially a means to make money whilst you sleep. You don’t actually have to be asleep to make the money. The point here is that it doesn’t require your presence to generate cash. It could be any kind of business activity or investment where you don’t physically have to be there to make money.  Capiche?

That’s essentially it. But it can be difficult to get our collective heads around this concept. That’s because of the way we have been brought up by society. Sometimes when everyone’s perspective is pointed in one direction it can be hard to see things from another point of view.

Passive Income Source

Everything drilled into us tells us from a young age to work for money. No one ever says sit back, relax and do nothing whilst the money rolls in. Unless your parents did, in which case you have enlightened parents! 

So what is the secret to a passive income? It essentially comes down to the assets that you have in your life. Most people, who work in a regular job for a living, have one main asset in their lives: themselves. They are their main asset. It’s not a bad asset to have and many millions of people have built up successful careers over their lifetimes. But it requires your time, a lifetime more or less, in an office or other places of work. Most of us need to do this in order to generate the positive monthly cashflow we all need to pay for the cost of living. 

Even when we make money, we tend to plough it into further liabilities, possessions or expenses rather than investing our funds into more assets. The defining characteristic of an asset is that it puts money in your pocket (for example a real estate rental property) and a liability takes money out of your pocket (for example your home). They can, in physical terms, be the same thing, as this example demonstrates, but it comes down to the outcome. Do you get cash-flow from the asset or does it cost you money? Always keep that single rule in mind. 

When we work a 9 to 5 we are effectively pimping ourselves by selling our time and trying to negotiate the highest possible return and many times a decent return is never even possible.

I worked for many years in the arts sector so the salary was already pretty bad to begin with. I persuaded myself that, because it was was the arts, I was making the world a better place. This kind if jobs snobbery did nothing for my own personal world of wealth. In fact, the work, as with many office-based jobs, followed a pretty similar pattern. It doesn’t really matter if you are a Director or a Clerk, the physical experience of working in front of a computer is not too dissimilar. The activity follows the same boring routine. For many years, I was committed to this ‘routine’ of my work.

This, in contrast to passive income, was an active form of income generation. It required me to be active, to effectively ‘sell my time’ in order to get paid. 

When your focus is on active, salaried income there are many inherent risks that we don’t fully consider. When you don’t work, you don’t get paid. Ok, it’s a little grey. If you are in a permanent role, depending on the country and company that you work for, or if you are incapacitated you may receive some kind of benefit or be able to take sick leave. However, this is for a predetermined amount of limited time. It’s not freedom from work.   

In the 2008 Financial Crash, I lost my job and couldn’t find full-time work. I was forced into a corner. I had to get creative and look at other ways to supplement my income. This is when I stumbled, or barged, my way into real estate. I’m not entirely sure I would have committed to the project so whole-heartedly if I had not had the push I needed.

You can read more about my journey into real estate here ▶︎

Almost by accident, I discovered the amazing returns of passive income.  It wasn’t overnight and I spent time trying to create a property renovations business initially. Eventually, I realised that passive income, via the vehicle of real estate rental investments, was the sunny uplands that I was aiming for. 

The book Rich Dad Poor Dad was a lightbulb moment in making me realise this was something I wanted to focus on. I realised real estate investments are assets that could provide me with a passive income source.

Remember if you are a contractor or a freelancer and you lose your ability to work for whatever reason then you have a considerable risk in your ability to generate an income. When you create a passive form of income that risk disappears. With that in mind, we should all ask ourselves: is it riskier to continue as you are in the supposed safe and secure role or is it riskier to take a leap into the unknown and try to create something that could support you forever?

Can An Income Be Truly Passive?


With passive income you create the ability to make money whilst you’re asleep, whilst you’re awake, whilst you’re doing the hokey cokey! You do not have to exchange your time in order for your passive income source to keep generating cash.

Does that mean you don’t have to do anything? No. Sorry, that would be amazing… but also ridiculous! 

Unfortunately, you can’t just imagine that (well you can, but it’s not going to happen). Anyone would love a passive income will fall into their lap out of nowhere. Unless you happen to inherit a vast estate from some long, lost, forgotten aunt that’s not going to happen. Even if it did you’d need to do some work; you’d need to monetise it, find tenants, and do many other things in order to effectively set it up as a passive source of income. 

Setting up a passive income stream, or multiple passive income streams is not an automatic process. Depending on the type of passive income source it can take a varying amount of effort to set up, with little to no returns initially and an often-times a vertical learning curve to climb. 

If you do decide to set up passive income it will be the best investment of your time, energy and effort that you will ever make. Guaranteed. 

Honestly? I didn’t know what I was getting into when I decided to invest in real estate apartments to rent out, and it’s not a completely hassle-free investment by any means, but the return far outweighs the time and money invested. For me, it has been one of the best decisions. Even to this day, I’m surprised when, each month, rental income credits my bank account. It’s the way a passive income works and it supports the freedom that I have always wanted.  

7 Reasons Why Passive Income So Important For Financial Freedom


Time is our greatest asset and our greatest privilege. The time we have on this Earth is life itself. It’s the time we have available to spend and, for much of our lives, we give it away.

Time waits for no one. And in some ways, it is a great equaliser. We believe you can’t place a monetary value on someone’s life. Yet this is exactly what we allow ourselves to do and to be done to us. We place an exact value on the time that someone spends through-out their day and the

Passive Income Source

Is the life experience of a CEO truly worth more than the life experience of a cleaner? In my opinion no. The massive variations in the levels of salary paid to employees, who all work in the same building as each other has nothing to do with their life-value but more to do with luck and circumstance.

Most individuals who are ‘successful’ in the professional world get a leg up because their parents could afford to send them to the best colleges. there and most people who end up as cleaners do so because of pure luck. Nothing else. Passive income affords everyone the ability and the opportunity to break free of this cycle. 

In the arts, I never earned more than 30k per annum. That’s perhaps more than a cleaner but it’s much closer to a cleaner’s level of pay than a senior manager’s. I worked for some big organisations and the CEO of those companies earned 10 to 20 times my salary if not more.

Real estate provided me with a source of passive income that enabled my freedom from this work. The ability to walk away from that massive inequality and make the choice over how I spend my time is a feeling I will never forget.  

Once you develop sources of passive income as long as you build it up to make sure it exceeds your expenses, then you will be free to spend your time as you wish. Continually adding to your passive income streams will mean your income has the potential to surpass your monthly expenses and the way you used to actively make money from your job. 


When I worked in an office I was always a very diligent worker. It was important to me to complete all of the tasks given and did them to a high standard. The problem is that it becomes an exponential workload curve. Your colleagues soon realise you can get a lot of shit done. Your task list becomes endless.

Passive Income Source

This dilemma meant I often found myself over-worked, stressed, anxious and mentally exhausted from work. I remember joining a small industry membership organisation, to discover the expectation was to attend industry events until late in the evening, sometimes 10 or 11 pm and then to be at my desk at 9 am the very next day. I lasted a week.

My stubbornness in refusing to work for free (and I can’t believe as I’m typing those words, that for many people, that is an actual, realistic expectation in office life) meant that I found myself out of work quite often. This was before I had ventured into real estate investment and I can honestly say in addition to the stress and anxiety of a ridiculously high workload, unemployment also brings about significant worry, anxiety and fear. 

The toxic, egotistical, boring environment of the modern office was personified by David Brent in the UK’s breakout success… The Office. This later migrated to the US spawning a hugely successful series that popularised the resentment many of us feel at being tied into the prison of office life. Check out the first-ever scene.

We are forced into workplace environments because we all have to pay our bills. Worrying about how you are going to pay your bills can ruin your life. I know because I have been there. In the traditional work or don’t work dichotomy, for the most part, there are only two binary options on offer. We end up overworked, stressed and exhausted OR unemployed, frustrated and broke. Whether we like it or not we live in a world that costs money. Unless you want to go off being a hermit in the words, then you have to pay to be in attendance. 

A passive income source that covers your expenses removes these worries and anxieties. You might have new worries instead so I can’t guarantee you it is a path to unbridled happiness. Besides I’m pretty sure the human condition means that it’s more about the journey and not the destination in any case, but I can guarantee you a source of passive income will help to alleviate worries and anxieties that you have about the cost of life and the risk of finding yourself without work, as I did.  

Financial losses should never be completely eliminated as a potential risk. As with all investments, there is a risk you can lose the capital invested. However, I can honestly say that the security of real estate has considerably reduced my worry, anxiety and fear in relation to money. This doesn’t create happiness but it allows you the freedom to try and discover what that might look like.  


How can we discover things we love when we have no time? Whilst working in an office full-time I didn’t have any real serious hobbies, apart from watching Netflix. I don’t think that counts. It’s because after another gruelling day in the office I barely had time to shower, eat, rinse and repeat. 

If you add a commute time on top of that than finding the time and space to discover something that you might actually love to do is nearly impossible. 

I honestly have no idea how people who work in highly pressurised, time-demanding jobs manage to squeeze it all in. I’ve tried, it’s physically impossible for anyone with a normal metabolism. 

It takes time to explore the world, to find out what your into, to discover the topics, places and things that get you excited.

Passive Income Source

So if you don’t haven’t yet realised what the things you’re most passionate about actually are then don’t sweat it. Work doesn’t allow you the time. 

And if you already know what you love to do then go for your life. Freeing up your time will allow you to learn more about that subject. it might also inspire you to explore something new. 

I have a long list of things I want to explore: travel, photography, writing, blogging, drawing, language learning, reading, yoga, fitness and the odd physical challenge. I’m not reinventing the wheel, a lot of people will have similar things on their interest lists but for the most part, work prohibits you from pursuing these interests to meaningful degree.

You can learn a language in around 400 hours and become an expert in just about anything in 10,000 hours. This is according to Malcolm Gladwell, an amazing author who wrote Outliers: The Story of Success.  

But when do we have that kind of time? 

Everyone likes to imagine winning the lottery but studies show that this will not necessarily make you happy. I believe this is because we have never had the free time available to explore what truly interests us. Even at school, the curriculum is pretty derivative and narrow. Algebra? Who cares?

So even if you came into a large amount of money you might not be sure what to do. Visualising your life, once you no longer need to be somewhere to pay the bills, is essential if you want to keep yourself occupied, sane and busy once you’ve established your passive income sources. 

I never really had this problem. It’s partially because when as a kid I was off school a lot with an auto-immune sickness. I had to go into my own world. This meant I always had my head in a book and I loved being at home or outside. I didn’t hate school but there was always a lingering feeling that it was a bit of a waste of time, even at a young age. I was waiting for my life to begin. This seems to have carried through into adult life. I love my own time and I have always hated the restrictive nature of going into one building and working at one desk to someone else’s timetable. You could say it’s a bit of a hangover from childhood.


One of the biggest benefits of a passive income source is the ability to live and work from any location worldwide; Ok, Antarctica might be a bit of a stretch, but I’ve no doubt some intrepid digital nomad has worked there. This is referred to as Location Independent Living. 

And for a lot of people who have a passion to travel that can be very attractive indeed. Although I love to relax on a beach as much as the next person, a two week holiday to a beach resort, in my opinion, doesn’t really count as travel in the true sense of the word. 

Some people also refer to this as being a Digital Nomad, but for me, this term Digital Nomad, has a slightly different meaning but in a significant way. I would describe a Digital Nomad as someone who has digital skills that are in demand and who is free of a specific location. You might be a Graphic Designer or a Copywriter. The point is that your job does not require you to be in a specific building at a specific time. It allows you to lead a nomadic way of life.

Or does it? You might just end up in another type of building with the words coffee shop displayed somewhere on the front.

Passive Income Source

Location Independent Living has a broader definition. Whilst it includes those who are digitally nomadic it can also refer to individuals who have set up passive income streams. These can allow those individuals the financial freedom to travel the world if they so wish. 

Individuals who are location independent usually share some similar characteristics: 

  • they have passive income sources either in the real world or online that allow them to spend time travelling to experience life in another country
  • location independent people usually have a home base to base themselves in, from which to explore the world for extended periods of time
  • they will live abroad for short durations or months at a time, rather than continually travelling for longer periods for longer periods of times
  • they will prioritise an excellent work, life balance in which a lifestyle is designed around work and not vice versa

Operating as a Digital Nomad might be right for you if you have the skills and experience to work without being tied to a specific place of work. But being truly independent of a location means being independent of any locations. What’s the use of living in Madrid if you can’t get to explore the beautiful country of Spain (which also happens to be my favourite country). It doesn’t matter how good the coffee is if you’re confined to the coffee shop. An excellent internet connection doesn’t give you physical freedom, you’re still stuck. 

True location independent living means creating a passive income which will allow you the time and freedom to go anyplace, anywhere, anytime.  


The Organisation for Economic Co-operation and Development believe ageing societies represent a looming pension crisis around the world whilst the Guardian Newspaper suggests the death of retirement is just around the corner. 

Countries today are simply not planning for the wellbeing of current generations (i.e. us!) when they come to retire. They can barely afford to keep basic social security programmes funded and in place and the looming retirement crisis is not going to disappear off the horizon anytime soon.

So what can you do about it?

Start making your own plans. And that’s the beauty of a passive source of income. When you create a passive income you are already, without realising it, planning for retirement. That’s because of two major reasons which we’ll dive into in more detail: 

Firstly financial freedom from 9 to 5 work is already a form of retirement, just NOT from life. You are effectively retiring from work and advancing into life.

You’re walking away from work and running into life. 

Secondly, a passive income source can provide you with an asset that can produce positive cash flow forever. Take real estate for example. The investment will continue producing cash-flow whilst it exists, as long as it is well maintained and looked after.

State pensions around the world are at risk. Governments budgets are continually under attack and the life-span of older people is getting longer. And when we start living to the ripe old age of 250, there will inevitably be more expenses. We cost, a lot!  

This security and peace of mind that a passive income can provide mean an investor will not be solely reliant on a 401k saving scheme, pension funds or state pension. These are highly exposed to the fluctuations of the stock market and present and, to some degree, represent a higher risk.  


Passive income, in general, tends to attract less tax than salaried employment. Working a 9 to 5 means your income is taxed at source. Before a salary has even been credited to your account the tax due has been debited. 

Passive income is taxed differently around the world depending on where you are based. In the UK, whilst regulations have been tightened on real estate, real estate investors can still deduct expenses against their income. This is not permitted for home-owners. 

If you have created a limited company through to manage your passive income streams than there are even more tax advantages. 

The underlying difference is that you have much more control. In the UK employers deduct tax, national insurance contributions, student debt deductions and any other expenses and then give you the remainder as your monthly take-home pay. When you operate your own company you apply all the expenses that you have incurred and then pay tax on the remainder. This gives you a lot more flexibility and allows you to apply many more allowances than you would as a salaried employee.

Tax regulations vary around the world and it’s important that you do your own research in relation to this, but in general terms, the tax eco-system for companies is significantly more generous than it is for individuals. Ever wondered why the rich manage all their money through trust funds?


The cumulative effect of all of these reasons is that, ultimately, your physical, emotional and mental well-being will increase (but only if you allow it to).

Creating sources of passive income will not result in instantaneous happiness or wellbeing for you, that’s something you still have to go and figure out for yourself, but having a passive source of income helps take care of your finances. The time, effort and energy spent in your 9 to 5 job can be spent doing what you love. 

You’ll have time to meditate each day, if you want, and to focus your mind on what’s important; to take the time to prepare healthy food, rather than grabbing food on the go; and to take time to really get into your exercise rather than Netflix and chill. 

To do whatever you want.

The ultimate goal for most is to get away from the office environment, sat at at a desk for 8, 9 or 10 hours per day. Staring into a computer screen, hunched over, with the glare of fluorescent lighting overhead. This is so bad for human health in some countries (Germany for one) have enacted a complete ban on fluorescent lighting. 

Is Passive Income Right For You?

If you want to automate your income, create wealth whilst you sleep and discover the freedom that passive income brings than, yes it’s for you.

One of the best ways to generate a passive income is to set up a money making blog.

If your looking for a way to create a lucrative source of passive income blogging can be one of the best and easiest income streams to set up.

But it doesn’t come for free. There is a time and financial requirement at the outset – if your committed it can be a big old step in helping you to realise your dreams.

Check out my comprehensive guide to setting up your first money-making blog ▶︎

Making money whilst you sleep can be a way to generate wealth for anyone who has the commitment and the determination to see it through. Passive income is a key focus of this blog and, taking these reasons into consideration, it’s easy to understand why. 

So should a passive income be one of your goals?

If you want financial freedom; if you want to travel; if you want to escape restrictions of the office and take control of your life then yes, passive income should absolutely be a priority.

When it comes to the way you make money passive income sources should be at the heart of your financial planning. It’s a route to a more secure financial future and one you can start creating today. After all, your time is your most valuable gift and it should be valued through the prism of that lens.

If you want an active life in which you make the choices and decide how you will spend your time then a passive income source is the answer. It’s the reason the rich stay rich but the secret it well and truly out of the bag – and it’s a resource available to anyone who chooses to unlock their freedom, create new sources of passive income and open the doors to new possibilities. 

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