Has passive income anything to do with an accounting term viz. cash flow? The answer is both No and Yes. No because there is no direct connection and Yes because like any business you can plan to have regular cash flow from the various sources of passive income.
Cash flow vs passive income
Just like you need constant cash flow to sustain your business and grow it to a larger scale similarly you need constant flow of passive income through various sources to sustain a good life style even when you are not working.
Non passive income cash flow
When you retire from your regular job you may get a pension or you may not if you are working for a private firm. It may become very difficult to manage your daily expenses at an age where you cannot even join any other job. So what option do you have?
Isn’t it better that during your most active work life you start devoting some time each day and build various sources of passive income. This will make you free from any burden that you may feel once you retire.
Passive cash flow assets
Isn’t it a good way where I start to use some part of my regular income and passive income which I am earning today to create assets that will give me passive money all my life such as a Digital marketing Company or a Real Estate.