Does Spread Betting constitute Passive income?

By | April 20, 2016

canstockphoto30066555I had an unusual chat with a fellow blogger the other day who happens to be a huge advocate of investing for the future. He spends his time signing up to the latest ISA’s, using his tax free allowances to their hilt and surfing trading and spread betting review sites like for another company to jump aboard and invest further with. However here came the stumbling block, even as a hobby and taking just an hour or so a day, that is active income rather than passive income.
Now don’t get me wrong, spread betting and alike are great ways to make money but in order to make money, I have to actually research the trade I’m making to ensure that it isn’t going to go south on me. When I voiced this point to him, comparatively he argued that Blogging and Affiliate Marketing was in fact Active Income generation too as it required constant updating of content, design and more – yet the loop hole for me here is that Bloggers are already doing those things and just happen to be profiting off the back of it, not actively breaking their routine to earn the extra cash – and frankly I’ve already listed these down as passive options and I’m not about to change them now.
But taking all things seriously, was I being too blasé about my categorisation of active and passive. I am a huge believer in cash being generated passively at the side of a real job or income stream, but technically a hobbyist Spread Bettor or Trader could meet this criteria. If they worked a full-time job and happened to dabble on the markets purely for their hobby, subsequently making another channel of money, this does meet the passive income requirements; especially if the investment is a long-term one and requires little to no interaction to receive dividends from it or payouts. In fact there is even an article written up by CNBC which refer to most fund investments as passive since the portfolio is so rarely changed.
So there you have it, while I am still going to choose affiliate marketing income and royalties/earnings from the sale of businesses/properties and assets over the idea of trading on the markets are being the epitome of passive income, I do understand that it should really be included in the spectrum as it can do just that. It would be good to hear some of your opinions on whether you believe it is a passive or active income source – so let us know in our comments fields or on our social media accounts and we’ll try to include some of your responses in our revisions at a later date.