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passive income
passive income streams
million bucks
writing a book
rear end
easiest thing
steady stream
many different types
incomes
business opportunities
lottery
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How To Create Passive Income
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How to Create Passive Income

How does one work and get paid for it, over and over again? Unlike with 'regular work', creating passive income means that you work once and get paid again and again, whether you work or not. There are a few methods that I'd like to share with you on how to create passive income, what some of the challenges are and what system works for me.

Creating passive income streams is not the easiest thing to do! There is a lot of hard word involved The great thing about it though is that if you have a solid stream of income, you could sit on your rear end if and when you decided to! There are also many different types, my favourite being online. And I will tell you why in a moment. First, you need to know a couple of things about these type of incomes (the ones where you dont need to work to get paid, over time that is).

The easiest to understand example would you be the rental of your home. One day you wake up and win the lottery. So you decide to buy a house and simply carry on living the way you do, but at the same time, rent the house to tenants. Nothing changes for you, except the fact that you now have a steady stream of income every month.

In the beginning, like most business opportunities, you will need to invest time and/or money. However, once the ground work is done (like the purchase of your house), you get paid every month. With a passive stream of income, you earn whether you work or not. So although there is hard work involved initially, it is income not related to your efforts.

So what other types do you get and what is the right approach for you?

Interest on your money is probably the most basic form. You’re not doing anything except collecting interest from the bank. If you had a $1Million in your bank account with a fixed deposit and interest at 12%/yr, you’d be looking at around $10 000 per month – in recurring monthly payments! The problem for me though is that I don’t have a million bucks lying around, unfortunately!

Royalty income is another way. For instance, producing a hit music album gets you paid every time you sell one. Even writing a book or patenting a product will get you royalty income. This is possible, although it requires a brilliant idea and the funds to make it happen. I am all out of great ideas at the moment and I'm not much of a singer!

Subscription income is where you have a product that people subscribe to, like Cable TV. There are initial costs involved to set everything up but once you have enough subscribers, you can sit back and enjoy your passive income! The challenge here is setting up such a company with a service, which would probably include expensive infrastructure.

Setting up a company is a way of benefitting from the work of others. This is also a form of this type of income because once the hard work is done to setup and get the company running, you can employ a team to run the company for you, while you sit back and earn a recurring monthly income. The real method of earning an income here is where you benefit off of others’ work, because setting up a company requires start-up capital, a lot of knowledge and research - it can take years before you see any form of passive earnings!

Network marketing is when products move through a network of consumers and/or sales people. You would typically recruit people who use and sell the products. They then in turn use, sell and recruit… and so it goes on. This can be extremely successful, if you have strong sales skills, for example. You would probably also have to attend training and be able to motivate your team to sell and recruit. Affiliate marketing is when you refer people to product website and if they purchase the product, you receive a commission. You would usually need your own website and many successful referrals to earn a decent recurring income.

An important lesson here is that, based on the few examples given, you can create a passive stream of income without actually having a product! The few examples above are all possible and achievable, to some degree for most people. For me at least, each method of creating passive earnings has its own major challenges.

Another very important factor when thinking of creating a passive streams of income, is that you need people! Yes, without people buying and selling and subscribing, there is little hope for a recurring income.

There are over 15 important keys for creating this type of income - one of them being the Internet! I mentioned earlier on that my personal choice of these income streams are online. The reason I say that is because the internet allows people to communicate 24/7 (sell, buy, subscribe) without one actually having to be there. That's why for me, I prefer a monthly income system that uses the internet to a large degree.

So to create a passive stream of income, you would first need to choose what type of income stream it will be, or from where and how the income will be generated. The key here, in order to have a recurring income and not merely a salary, is that you want to have a steady flow of income every month, whether you work for it or not. This should happen without you having to do anything. Obviously, it excludes the intial work that has to be done!

Some online systems take all the challenges into account and work them into a product; eliminating overhead costs, being online and all other issues that are usually associated with wealth creation systems.

All the best with whatever passive income generating system you choose!


Street Talk

Very good information for beginners, thank you

Reply
  about 8 years ago
  

I'm glad I could help ;)

Reply
  about 8 years ago
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