Passive income is important because it creates stability, security, and freedom in your financial life. Additionally, since passive income is not limited by your time and effort, it can have a positive, and significant, effect on your ability to build wealth.Having a passive income ensures more financial freedom and releases you from the traditional workday to provide alternative investment opportunities to make money. In addition to giving you time back, passive income can also help you focus on worthwhile financial goals, such as securing funds for retirement. passive income can be better than active income.