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The term “passive income” has become very popular in recent years. But what does it mean? And more importantly, is it real passive income?
The defining feature of passive income is that it doesn't require much effort to keep it rolling along. You create the product or service and you let it do the work for you!
But is this really possible? Is there such thing as true passive income?
My answer to these questions is an emphatic yes! Creating a well-paying online business can be a slow process, but it's definitely achievable through hard work and perseverance.
I've spent the past five years building a business with many different types of websites and services.
Creating and keeping up with additional streams of revenue is an easy way to add more to your net worth. These are typically one-time, non-monetary benefits that require little effort to enjoy but can be relatively lucrative if you keep them or they generate word of mouth hype.
Sources of passive income include:
Giving lessons on how to swim or take yoga classes
Running a YouTube channel that generates traffic and advertising revenue
Writing for money via freelancing sites like Fiverr and Medium
Creating and selling products online through platforms such as Amazon, eBay, and/or Yoursify
Landing job opportunities in the field (or fields) that you already have expertise in
Investing in stocks or other financial assets
Surfing websites for reward
Some of these ideas may seem too casual or not worthy enough of your time, which could be a good thing because it means you’ll need to work hard to make sure people recognize and appreciate what you provide.
With this type of income, the workload is mostly done for you! You create the product or service, and then someone else does the rest. It’t necessarily made you rich, but it is likely to strengthen your bond with at least some part of your audience.
This article will talk about the importance of creating new sources of passive income and strategies for doing so.
Many people get stuck in a state of mind where they think that because they have invested into a business or career, then they are now obligated to keep working hard to make it succeed.
This is not true for two reasons. First, you cannot work harder than you do already when it comes to investing. With all too common examples being stocks that lose money, many people give up on investment altogether.
Second, even if you invest as much time and effort into your job as you can, you will never be able to spend more time at work than you earn paychecks every week.
I’m talking about spending less time with family and friends due to excessive hours, and I’m talking about missing important life milestones like graduation and wedding ceremonies due to poor planning.
These are things that very close to us which makes it tough to stay motivated.
The cost of this burn out often times leads to longer term health issues such as stress related illnesses or depression. All of these prevent people from going back into a normal sleep schedule and healthy rhythm.
It also hurts their relationships with those around them who rely on them.
A way to make passive income is to offer your services in an area of the economy that relies on steady revenue streams. This can be done through teaching, writing, designing or managing websites and/or givingshops run by yourself or others.
The thing about this type of income is that it doesn’t go away unless you decide not to work. (That would be quitting!)
Teaching is one of the best ways to achieve this as you don’t require too much equipment. You just need a decent pair of shoes!
Other areas that have a constant flow of money are producing books or music, running a business, or investing. All of these rely on the availability of resources, knowledge and/or money for other people.
This article has focused on examples of how you can create and enjoy a life with consistent income, so now let’s look at some strategies for coming up with the necessary resources and learning more about them.
Achieving passive income is not easy or cheap, which is why most people can’t do it. It takes time to develop an asset that generates money for you, and there are no quick fixes.
It also requires more than just thinking about your business in terms of earning money. You have to think about how to keep it running too.
You will need to devote resources to marketing, repairing equipment, finding new sources of revenue, etc. All of these things cost money, and most entrepreneurs don’t have enough of a budget to dedicate to this goal.
That’s what makes it so difficult for many people. They try investing in their own business, but they don’t have any extra funds to invest in research, advertising, or upkeep.
It's important to remember that spending money to make money is totally fine, but only if you’re willing to put in the hard work to achieve success first.
There is no such thing as passive income. At least, not in the true sense of the term.
Passive income comes from creating an asset that produces money for you without your intervention. For example, if I were to create a website about how to make cookies, I would not be considered actively involved in making cookies. However, I have created an asset – my website!
My cookie recipe site could potentially earn me some revenue at any time. So even though it’s impossible to get rich by just putting in effort into an activity that we enjoy, I have produced what seems like active income through my own business.
There are many ways to achieve this but none of them truly fit the definition of ‘passive’ income.
There are many ways to make money from sources that seem passive, without doing anything extra- it’s called investing!
Investing in stocks, real estate, or currencies is usually done through companies that offer this service to you as an investor. They take care of the hard work for you, so you just have to sit back and earn money.
This is what makes these types of investments “passive income”. You keep your money ready and waiting for earnings, which creates an ongoing flow of revenue (more than one source).
The key word here is “revenue”. This is different from profits, which indicate how well your business is running at times. Revenue indicates whether or not you are earning enough money given all of the time spent working on your investment.
That being said, there are some strategies that can vastly increase your investment’s profitability while still leaving you with time to focus on other things. Here are three such strategies.
Many people get addicted to income, but it isn’t good for you. You see people who have a lot of money, and their lives look beautiful, but at what cost?
They spend most of their time in busy-ness, having to keep producing more money to give themselves an illusion of happiness.
Income can easily become the top priority in your life, which is why so many people feel stressed out, overwhelmed, and never seem to find time to relax.
When you have enough money, you could just keep spending all day every day, and still not be happy.
You would always need to earn more, or risk losing everything. This goes against one of the biggest myths about wealth — that if you don’t work hard to make more then you have, you will suffer a loss.
That assumption comes from the stereotype where rich people are seen walking around with smug looks on their faces, laughing at everyone else as they struggle to survive.
A lot of people get stuck trying to make their income passively grow beyond what they are doing now. They try different strategies, but never seem to find much success in it.
The reason why is because most people fail to understand how money works in this world we live in today. Technology has made our lives less dependent on having a job, which is great! But it also means that you no longer need to have a career to survive.
In fact, technology makes being wealthy possible. It’s not about how many jobs you have, it’s about how well you use your time.
If you have a knack for teaching or writing, start offering lessons via YouTube or blogging. Or if you love to sew, open up a boutique shop where you can sell fashionable clothing or bags.
It doesn’t matter what niche you pick, as long as you go into it with the right mindset. You must believe in yourself and know that you will succeed.
