It’s coming to the close of the first quarter of the calendar year (or last quarter of the financial year for organisations with their financial year ending on 31 March 2010) and bonus time.

I was fortunate that my efforts in the last 12 months from January to December 2009 were recognised and received a decent bonus from my employer.

Comparing my passive (and semi-active income from capital gains and blogging) against my bonus, I realised that my bonus was still higher.

What are the implications for me in terms of my journey towards financial freedom?

Salaryman/woman Don’t Quit Your Day Job Yet

For many of us who are salaryman (and women) who earn most of our income from employment, it is a sobering reminder that active income will still constitute our primary source of savings and investible capital. Singapore is a place where you can get a job if you are still relatively young, have the relevant paper qualifications and experience for the jobs available in the industry.

Of course, there is global competition in the labour market given the lax immigration policies of the Government for the last decade or so which has made life quite challenging for the less educated and skilled.

Even though I have a decent job now that pays me a fair income to sustain myself and my family. I am driven by the constant worry about financial independence and freedom. Thus, even as my active income from employment is the main driver of savings. I continually push myself to look out for passive income opportunities.

From Active to Passive: It’s a Gradual Transition

I realise that passive and active income are still income streams. It is a continuum, i.e. your total income comes from both passive and active streams. You don’t have to choose, you have to develop both. For many of us, the active source will be the main one during the bulk of our economically active days when employment is available. The passive one comes in to pick up as we near to the time called “retirement”.

Except in today’s world, the concept of “retirement” is outdated. So long as I am healthy and able, I want to work. But my work may not continue as my previous job role and hence I need to generate income from more novel sources such as project-based, training and consultancy or running my own businesses or even punting in stock and shares.

Supplementing it would be passive income from interest, dividends and blog monetisation.

I intend to continue to work hard and work smart in my career. But I also invest in the time to read non-fiction in areas that help me build skills relevant for today as well as tomorrow’s challenges. I invest the time to try out new skills e.g. doing training as part of my job in my organisation to educate my fellow colleagues on internal controls and fraud awareness as well as to polish up my skills in public speaking and training.

For a long time in my life, I saw the world as a dichotomy. Black and white, yes and no, good or bad. Increasingly, age starts to mature my perspective on the world. It is a continuum and a continuous journey. It only stops when we die.

In the meantime, we can enjoy and experiment with the fullness that the continuum provides.

How are you experimenting between active and passive income?

Share with Panzer in the comments section.

Be well and prosper.

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