I like many bloggers have aspirations to have a decent stream of “side” income.  Lazy Man and Money calls this Alternative Income. Others call it passive income.  Jonathan at MyMoneyBlog questions if it (being passive income) exists at all. He offers a great breakdown of typical income streams that many of us might define as passive, and asks how passive are they really?

I agree, I think many of the income streams that are typically defined as passive are hardly passive. Rental properties can be ton of work.  Effectively picking good dividend paying stocks is hardly without substantial risk.  Writing the next number one hit doesn’t just happen.  All these “passive” incomes are however unrelated to any kind traditional employment.  Being a landlord is a form of self-employment. As is being a stock or mutual fund picker.  These passive income streams are all in some way or another a form of entrepreneurship.

I think the labels “passive” and “side” do not fully convey the entire purpose of having additional income sources. In my mind these additional income sources form the bed rock of what I consider “sustainable” income. I use the word sustain to convey two meanings.

  1. To bear up under; withstand
  2. To supply with necessities or nourishment; provide for

Even if you’re in stable job, employment (other than self-employment) is always at the whim of someone else.  For that reason I think it’s not only important to have an emergency fund, but additional income from other sources. Self-employment is not necessarily stable, but those who are self-employed generally enjoy a level of control that conventional jobs can’t give.  Ideally this income becomes large enough to sustain us.  In that light the day job becomes the “side” income.