Passive Income – What Is It?

Have you ever thought of income that keeps coming in even when you are not working? And by this I mean income you are earning that does not require your active participation? Yes, it can be done and many are receiving this kind of income. It you put your mind to it, you could learn how to make passive Income and it is not an idea that is far fetched.

Imagine this, you want to get away from everything and decide to go to an exotic Island for a month or a cruise for a week. You do not have to request leave from an employer. Or you wake up in the morning knowing that whether you work or not that day, you are secure financially because you have income coming in that requires little or no work to keep it going.

Why would you want a passive income?

Most of us have an employee mentality. We are told to go to school get good grades and find a nice secure job. The problems with that is that we a heavily reliant on an income that constantly requires our effort and attention. We must constantly wake up to the alarm bell, make the usual dash to the office, we can only take certain days off sick. If we stop working, the income stops. we all know that mortgage payments do not stop because we are no longer bringing in income. This is why we need to learn how to become financially free. Robert Kiyosaki the author of Rich Dad, Poor Dad asked pertinent question, how hard is your money working for you?

What are the merits of passive income?

You decide when to work. You do not have to wake up to an alarm clock and your time is your own. I don’t know about you but I like the sound of that. A passive income can free you from the inconvenience of waking up when someone else decides you should. You can take vacations whenever you want and not worry about coming back to a job. One reason I wanted to learn more how to make passive income is the opportunity to be a full time dad and husband. I like to spend quality time with my wife and kids.

You will have time to pursue other interests apart from work. I Iike to thinks of Richard Branson galevating around the world in his parachute in a quest for a new record. He is able to do this because he has businesses can run on their own without his day to day participation. Can you do this if you are self employed? well, yes and no. It depends on who is running your business. If the business requires you active involvement, (an example is a Dental or a Law practice) then you cannot really take time off work whenever you like. You do not own you time, your business owns your time. You need to find a business that can still function whether or not you are working it.

Futhermore, should anything happen to you, your children can inherit it. You cannot leave a Law practice to your children unless they are trained Lawyers. So, if unfortunately you die, your business dies with you. If you have a business that runs independently of you your children can become the inheritors.

There is less stress in your life. One of the common problems of being a long time employer is stress and burnout. Everyone is familiar with stress related illness which pressures of work causes. A passive income frees you from all of that.

If your income is passive, you can put a figure on how much you can earn. This is something you cannot do if you have an active income. If you are an employee, for instance, you cannot earn more than your boss. Your company will always put a figure on what they think your job role is worth. You do not determine this they do.

You can also contribute significantly to worthy causes and make a huge difference in the world.

What kind of active income can you develop?

You can earn passive income from charging rent on the property you let out. This is a common example. If you are a person of letters and a gifted writer, you can earn thousands of royalties from the continuous sale of your books (think JK Rowling). If you are famous recording artist, you can earn royalties from the recordings you made. The Beatles still make massive royalties from songs they produced in the 60’s. Elvis’ estate will still make millions in income even though Elvis died more than thirty four years ago. Think of these people and then think of earning money from something you set up years ago or even decades ago that is still paying you.

Dividends you receive from shares, securities and bonds are other examples of passive income and so are pensions.

Nework Marketing is another way to create a passive income. This is probably the best option for someone that does not have business experience or experience in investing. And if you are someone like me that has little or no singing talent. This might be an option to chose. Most of the bonuses and perks paid out especially at the higher achievement levels in Network Marketing are mostly passive. And just like an artist, your could earn income for organisations you set up in your business years later. You could be paid for setting up business groups that continue to produce income.

If you trully want to enjoy life and become free of a stressful job, I seriously urge you to consider learning how to create passive income. Unfortunetly, most people have not been trained in financial education continue to go through the paid job route. They slave on a job for the next 30 to 35 years and find out later in life that they have given the best part of their lives to an employer. I think this is sad as there are ways to liberate ourselves financially. Do not let an employer steal the best part of your life. Seriously consider passive income as an income option.



Source by Ajibola Obe

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