internet-Scout.de

by Carsten Braun » Blogger, Creator und Digitaler Solopreneur «

The common terms for those two income categories are:

Service-based income (or "Active income") - Your client work where you're trading time for money. This includes freelance projects, consulting, done-for-you services.

Product-based income (or "Passive income") - Your digital assets, affiliate commissions, subscriptions, and other revenue streams that can generate money without your direct time investment for each sale.

Some people also call them:

  • Linear income vs Scalable income
  • Trading time for money vs Leveraged income
  • Client work vs Product revenue

The key distinction is that service-based income requires your time for each dollar earned, while product-based income can scale beyond your time constraints.

Most successful freelancers aim to gradually shift more toward the product-based side since it's not capped by your available hours. Your Ghost themes are a perfect example of building that scalable income stream.

What's your current split between the two? Are you actively trying to shift the balance toward more product-based income?