Passive income- a buzz word that’s flying around faster than a mid-west tornado, but what is it and how does one create it?
From the words of the late, great Napoleon Hill in his book, Think and Grow Rich...
“Hard work and honesty alone will not bring riches, perish the thought because it isn’t true. Riches, when they do come in huge quantities, are never the result of hard work. Riches come from definite demands based on the application of definite principles and not by chance or luck.”
Historically wealthy people have multiple sources of income, some of which are passive. How ever, we’re not going to get into this just yet. Because first...
Did you realize that 3% of the population makes 97% of all the money that is earned?
It all seems very unfair, so why is this the case?
Well, let’s be honest, the majority of people are implementing a money earning strategy that will NEVER work if you ever desire financial freedom. Working 9 to 5 or more to collect a paycheck isn’t always worth giving up your time especially when you only get a couple of days off each week.
It’s not entirely your fault, you were conditioned to think of earning money only as trading time for dollars. They claim, “work hard- save hard” but that’s false.
The problem with this money earning strategy is that there will always be a limit on your earning potential because there are only so many hours in a day and only so much that customers are willing to pay you per hour.
So, if we know that 97% of people have adopted the ‘trade time for money’ mindset and are not yet experiencing the ‘good life’ like the wealthy, what is it that wealthy people do differently to have such good fortune?
The answer... a different mindset.
However, there are only THREE ways to earn money:
1. Trading your time for money
3. Creating multiple streams of income and hopefully, we’re talking passive income
Now it’s time to delve deep as I want to encourage you to start thinking about ways to multiply your time (and your money) by adding passive sources of income to your revenue stream.
Why You Need Multiple Streams of Income (MSI)
Having MSIs is the same concept as diversifying your investment portfolio. When one income stream is lacking, others can make up for it yet when all income streams are flourishing, well, you’ll be racking up a lot of cash.
Nonetheless, it is common for people to confuse the term passive income with investing when in reality, passive income comes with multiple streams of income. Investment plans are longterm and typically in preparation for retirement.
Passive income, simply put is something that you create once and then it continues to generate income with little or no input from you. Your investment plan and passive income should be thought of as two separate entities.
Let’s take a look at some of these great passive income options below.
Running a rental property can be a great source of extra income, but it isn’t the most passive choice because you’ll put a lot of time and effort into managing the property—unless you hire a property management company.
Rent Out Useful Items
Do you have any items you don’t use all the time that others would like to borrow? Useful items such as trucks, trailers, trampolines, kayaks, or even your own yard could earn you passive income as rental items. This also includes renting out spare rooms in your house with the help of websites like Airbnb.
Become a Content Creator - Start a Blog/YouTube Channel
If you believe that you have a brilliant idea that appeals to a specific audience, you could create something like an educational blog or a YouTube tutorial series to generate online traffic.
If your content is engaging and it sees enough daily traffic, you could sell ad space on your blog or ad spots on your channel to earn a passive income.
And Finally, One of My Ultimate Favorites- Sell Digital Products
If you’ve figured out how to solve a problem in your life and feel confident that you could help someone else do the same, you could create a digital product possibly in the form of an e-book and/or online course.
This isn’t as complicated as it might sound because once your ebook or course is created, it’s possible to set up an online automatic marketing funnel that can attract new clients continuously.
Side-note- I specialize in this space, teaching the non-tech savvy how to pre-sell their concept and then turn it into digital products.
5 Steps to Help You Create an Effective Strategy for Developing MSI
STEP 1 | Create a Mind-Map.
STEP 2 | Let Your Imagination Run Wild.
STEP 3 | Identify Passive Income Sources.
STEP 4 | Identify Where You Can Get the Biggest Bang for Your Time.
STEP 5 | Choose Just One.
Remember, creating additional income sources won’t happen overnight. So make sure you give each of your potential income sources the time and effort needed to get them running.
However, be aware that everything is not going to pan out the way you expect but if something doesn’t start generating income in a reasonable amount of time or if you don’t like it, let it go and move on to something else.
For more advice, tips, and insight, tune in to the next OBC Podcast episode, “What is Passive Income & How to Create It.” I plan on covering all the bases in greater detail so that you feel more informed and confident in your decision to earn passive income through multiple revenue streams.
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