Passive income
Passive income
What is
Passive income?
“Passive
income is income resulting from cash flow received on a regular basis,
requiring minimal to no effort by the receiver to maintain it.”
I'm sure you realize this but let's be clear: "passive
income" and "making money while you sleep"
is not always the same thing.
Truly passive income means income that once its set up it
takes almost no work to maintain. For instance investing in the stock market,
or publishing a book.
"Making money while you sleep" can refer to any
income streams that aren’t directly linked to the amount of hours you put in.
For instance, if you're the owner and manager of a 24-hour MacDonalds you will
make money in your sleep. But it definitely isn't a passive income source as
you need to put in a lot of work to maintain it.
With job postings still scarce, job security dissipating,
and wages seemingly stagnant at best, many people are trying to establish some
security by creating multiple streams of income. It’s a smart strategy, but if
you have trouble leaving your home or primary position to get to a second job,
you’ll find yourself frustrated and stressed out.
While employment opportunities are getting scarcer isn’t it
good to know that your ability to take things into your own hands is getting
greater?
Perhaps you’re raising kids and you’re committed to not using
daycare. Maybe you’re a little older and can’t commit to a full-time job. Or
you might be injured or disabled, making it difficult for you to leave your
home each day. Whatever your reason is, if you’re stuck at home most of the
day, you’ve probably thought about the income you could be making by taking a
work-from-home job or running your own business.
All too often people engage in what I call trading hours for
dollars, which can be great: You can increase your hourly rate, you can work
more hours. However both of those have
an upper limit. At some point in time someone is going to resist paying thousands
of dollars an hour, if you’re that good, and frankly there are only 24 hours a
day and 7 days a week to actually do work.
It's impossible to scale beyond those thresholds.
The secret to building true wealth, though, is not to get
great income. The secret to building true wealth is to use whatever income you
have, although small or great, in an efficient way. The secret isn’t to use
your activity income to pay for the fun stuff of life. Ultimately, what you
want to do is have the interest on your interest, or the income on your passive
income, be what you use for lifestyle, boats, the vacations, or whatever else.
The challenge with trading hours for dollars is that you
eventually run out of either, and when you stop inserting the hours, you lose
your income. So the high-earning
Attorneys, or Consultants, or Whatever make great money while they’re engaged
and while they’re at the office, but when they go on vacation, they don’t. The billable
aren’t happening. So, what you need to do to add to what I would call
‘activity-based’ income is have leveraged and residual income.
Good news: There are plenty of genuine ways to earn extra
money sitting right where you are right now. Some of them involve starting your
own small business, while others mean working for someone else using your home
as an office.
The reality is that there are two categories of income that
one should strive for:
1) Leveraged Income
2) Residual Income
1) Leveraged Income
Leveraged Income is where you get to use the activities of
others. Business owners use leveraged income, partners in a law firm use
leveraged income, etc. They earn income off the efforts of others. The old saying is, “I would sooner have 1% of the effort of 100 people than 100% of the
effort of one person.” This way, you have much smoother income and you have
much higher likelihood of being able to increase the considerable of income
that you get.
2) Residual Income
Quite simply, Residual Income is money that flows when you
aren’t working, from previous activities engaged in. Think of it as owning some
intellectual property. If you own a song
or a piece of software and it gets used over and over, and people pay a license
fee or a user fee for it, you’re earning income on work that was primarily done
historically. This is very important.
Legitimate Ways to Make Money from Home
Let’s look at a few real ways you can work from your home
and make the extra cash that you and your family need.
There are thousands of ways you can also start earning money
online. From advertising to selling products.
Here are the easiest methods to start making money online.
As of 2013, it was estimated that there were more than 152
million blogs. Earning through blogging is becoming extremely competitive, yet
there is huge potential for blogging about a niche topic. Are you an expert on
any topic? Or passionate about it? Create a blog and start earning!
Creating blogs might sound like a lot of work but guess
what? Since web hosting services started adding website builders to their
packages blogging became a lot easier.
There are a lot of different ways to start earning money
through blogging. You can advertise like that movie site of you did, or you can
start selling products (your own or an affiliate’s)
If you choose to advertise I would suggest you use a
certified program like Google Adsense.
Fiverr…
Fiverr is a great place to make a
few bucks or spend a few bucks if you need some of the services people offer.
Basically, everything is $5. You either pay $5 or charge $5. They call them
“gigs.” You can offer your services however you choose. If you sell art and
you’re fine selling pieces for $5 each, that’s a gig. If you’re a graphic
designer and you want to offer your services for $10/hour, simply offer a 30
minute gig. If they need two hours of graphic design, they pay you $20, or
$10/hour by buying four gigs.
Freelancing
Everyone has a talent or a hobby. Why not use your unique
talent to your advantage and start making money with it. Freelancing is very
similar to Fiverr. The biggest difference is that you don’t have to sell your
“Gigs” in increments of $5.
The process of landing a job works exactly like a bidding
site. If you use freelancing services like Freelancer, Upwork or Elance you
will need to bid on a job that fits your description. After the timer has run
down the owner of the job post decides who he will choose to do the job.
Usually the bid with the lowest price will get picked.
Youtube
There are two methods to earning money using Youtube. A creating method and a re-posting method.
If you have a specific talent that you want the world to see
and aren’t scared of getting yourself in front of a camera then the creating
method is for you. The only downside is that this method will take you the
longest to start earning due to the fact that you will need to create your videos
first. By letting Youtube show ads on your videos you will be able to start
earning. The amount is depending on the amount of views your videos get. Great
quality videos get a lot more views than the same videos with low or medium
quality.
The second method you can use will not require you to create
your own videos. Have you ever heard of Create Commons? If not than today is
your lucky day. Creative commons videos are videos that have been posted to
Youtube under the creative commons license. These videos are allowed to be
re-purposed, you just need to give
credit to the creator. By creating a channel and reposting these videos you
will be able to monetize them and start earning a little bit of money.
Amazon
Amazon has the largest collection of e-commerce customers
WITH credit cards on file. It also controls 67% of the ebook market. Customers
are used to paying online and can literally buy your book with one click.
That's a recipe for success. Your first book can be on Amazon within 2 weeks.
Buying items on Amazon and selling them on ebay. It's genius
since you only buy on Amazon after you make a sale on ebay - no inventory, no
financial risk. It's perfect.
Udemy Course (Video Courses)
Udemy has 10 million students across the world and ANYONE
can be a teacher, you just need a skill you want to share. Most courses are
priced at around $10-20 resulting in a lot of impulse purchases, again
one-click purchases. They do all the marketing for you including Facebook
retargeting.
Downsize and Declutter: Sell Your Unwanted Stuff
Before you really roll up your sleeves and monetize your
personal or professional skills, why not right-size your life? Selling your
unwanted stuff is a great way to downsize and declutter your life while earning
some income on the side. If you’re transitioning to full-time work-at-home status,
that income could provide a critical boost to your plans for a proper home
office, or allow you to maintain your lifestyle during lean times without
resorting to voluntary simplicity.
When it comes to at-home income, selling your unwanted stuff
is the definition of “low-hanging fruit.” Even if you’re resolutely intentional
in your purchasing habits, you surely have possessions that you can do without:
old kids’ clothing and toys, disused sporting goods, out-of-fashion wardrobe
accessories, electronics, entertainment, valuable but non-sentimental keepsakes
such as watches and jewelry, broken-in furniture, dusty tools and outdoor
equipment, and perhaps even big-ticket items like a motorcycle or second car.
Affiliate Marketing
This is the one that I believe a number of people online focuses
on. The key with this is providing value. Affiliate Marketing is where you
promote a product/service and receive money if someone purchases that product
or service.
For example I promote services that can help people earn a
significant amount of money in their part time. The key to success within this
industry is to make sure that you are offering something people want, and
something you are willing to use.
Property Investment
This provides you with two methods of earning income whilst
doing no work. The first one is the guaranteed rent you will receive each and
every month. This allows you to budget as it provides you with a stable income
every month, and doesn’t have the peaks and troughs
The second method is via capital gains. Property is a long
term investment and if you own your property for 20 years you are likely to get
a significant return on that property.
Stock Market
I passively invest in the stock market. It is a low return
on investment when compared to creating a brand or writing a book - but is by
far the simplest to set up.
If you start following the behavior of even large cap shares
in the stock market, you would find that they trade within a range. You can
take advantage of this and start trading to make money.
What are the Risks?
These endeavors aren’t without traps and challenges, though,
so before we take a look at some legitimate ways to make money from your home,
let’s review a few things that you should avoid. Unfortunately, if you want to
earn an honest living from home, you’re also a common target of scammers,
especially in these economically tough times. But if you keep these simple
rules in mind, you won’t become a victim of one of the many work from home
scams.
Money Scams to Avoid
1. Requests for Money
Some scams might involve asking
you to pay for a “training” book or CD that explains how to make money in a
certain business. Others charge for supposedly “exclusive” products that you’re
supposed to sell at a premium. Avoid both of these scenarios. Remember, you
should never have to pay to get a job. And if someone asks you to, you can be
sure that it’s a scam.
2. Get Rich Schemes
Get-rich-quick schemes get only
one person rich: the schemer. Not you. Don’t be that con artist’s next victim.
If you are willing to put in the time and effort, you will have the opportunity
to build a viable business or become a trusted home worker in a great business.
But if you’re looking for easy
money, you’ll likely just get stuck with a lot of bills and worthless
information. When websites run promotions that promise that you’ll make
thousands a week with no experience and very little time, you can bet your
bottom dollar that they’ll be in your wallet before you can ask the first
question.
3. Offers That Are Too Good to Be True
You might be desperate for work,
but don’t necessarily jump at an opportunity that sounds too good to be true. The
truth is that the people who run these scams are very good at what they do.
They’ve been able to deceive many intelligent people because they present their
“opportunities” so well that almost anyone will believe them. When you’re
looking for a new job or extra income, it’s easy to get lulled in to a comfort
zone where they can take advantage of you. Keep your guard up – always.
Make sure you set a smart schedule
that lets you diligently focus on your work, without throwing the rest of your
life out of balance. And make sure you always keep your guard up for scams and
cheats. When you’re on your own, you might have a little more freedom with your
schedule, but you lose the sense of protection that a company can provide.
Learn More
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