So you have heard of Passive income, and want to be a part of it.
The idea of earning money in your sleep, was simply too hard to resist.
I mean who could blame you?
Passive income is the perfect thing you can do.
To not only earn in those early hours but all throughout the day.
However, us talking about the end result of achieving passive income isn’t going to do much.
Instead let’s get into this full on guide that will break down all the basics and help you with strategies to kickstart your journey.
Table of Contents
Passive Income: The Dream and The Reality
The idea of passive income for some can be hard to fathom.
After all its the act of earning lots of money.
While putting in minimal involvement.
This is what makes it different to your normalized active income that is encouraged.
However saying that though passive income has seen a recent spike in popularity.
Mostly due to the internet, where people has young has teenagers are finding ways to make top 1% salarys online.
Its this that is causing more people to dream about the prospect of joining in order to earn while sleeping, travelling and doing fun activities with loved one.
However you may know the deal.
This is something that alot of people want to achieve.
But many aren’t.
Some because they don’t know this route even exists.
However more so its because of the time and money that goes into it.
This is made even harder if you have less of one or both.
But find a way around it and boom.
You have the financial freedom.
Plus the key in your hand to the door that unlocks your life.
Exploring Passive Income Streams
Now starting passive income streams, starts with identifying a route that will make that possible.
Its not something where you click buttons to generate all this infinite money.
Instead you are going to need to understand various passive income strategies so that you can incorporate them into your own strategy.
Now don’t get put off by this.
Not only do we live in a day and age where there is more information then ever for you to digest.
So what ever you choose to make your passive income stream, you can master.
But there are also 100’s of ways to make this kind of income.
There will always be something that will accommodate you.
But to start with, lets begin with some of the most popular ways for you to get cracking:
Investing in the Stock Market
An easy way for you to get started is with the stock market.
I say easy because you could essentially invest money today, and start recieving some passive income even if its small.
You also won’t need to work hours on this to make it work.
Instead you take a percentage of your current earnings and put it away.
The routes you can go down here include stocks, bonds and mutual funds.
All of which are solid options.
Now it goes without saying, your capital is at risk here and with market volatility you should always be keeping updated and doing research.
But with the help of information in there and potentially the advice of a financial expert, you have a route that could give you that passive income.
Real Estate Investment
Real Estate is a great way to get some rental income through having properties.
The housing market isn’t going anywhere which means you could be renting out different properties, getting a sizable chunk back each month.
However I know what you might be saying don’t you need a lot of capital to get started.
While it is ideal, you would be wrong.
There are many ways to invest from, getting some buddies to crowdfund together and put funds together.
Through to investing shares into the real estate trusts and renting a room out in your own property.
Blogging and YouTube
Has you may know there is a lot of money to be made, when information and entertainment is involved.
Its for this reason that opportunities such as starting a YouTube channel or creating your own website are great avenues to go down.
Now when I talk about these, I am not alluding to earning clump change.
Instead I am on about turning one of these into a lucrative passive income source.
There are many people taking advantage of these methods, and getting on it yourself, you will be able to earn through different ways.
Whether that be ads, affiliate marketing or even sponsorships.
Beyond the Basics: Understanding the Tax Implications
For all the beauties of passive income its important to understand that passive income is still the same as active income in one regard.
This is in that its taxed, which means whether you earn a little bit on the side to supplement your main job.
Or get to the point where your making tens of thousands you will need to do your research on what qualifies as going towards tax.
So as you embark on this journey make sure you are following the rules and where possible get someone within the tax field, to look at your situation to determine whats best for you.
As depending on the passive income methods you choose, you may be able to write certain things off the business.
Learning from Success Stories
Now if there is one thing I have learnt through my own passive income journey, don’t just go at this alone.
What I mean by this, don’t go in thinking you can do it all with all the information you already know.
You instead always want to be gaining insight, especially from those within the industry in which your trying to scale your passive income in.
Whether that be attending webinars, reading insightful books, watching YouTubers in the space.
What ever it may be, make sure your exposing yourself, to the right people.
This can make the journey much easier as well more interesting, as you will constantly be learning.
Pitfalls to Avoid in Your Passive Income Journey
So we have gone over a few of the many methods you can get into, the tax and the continuation of learning throughout the journey.
However one aspect you must be prepared for is obstacles.
It will be almost impossible to find a passive income source, where you will be placed in a situation where you will need to tackle some kind of issue.
So here are some of the main ones that you can avoid, that I have learnt too from my experience:
Lack of Diversification
As I went into in more detail on this post about diversification with passive income streams, its important to spread your money out.
Even for myself, I am currently working on four income streams.
This is so, if I ever get into a situation where one fails, I will at least have some backups.
As a result, its a good idea to follow this same practice.
For as good as passive income is, you can encounter at any time an issue, where one starts to fail or proves to no longer be worth the investment.
So keeping yourself diversified is only going to stop this from happening and make you impenetrable.
Another pitfall to look out for is your own impatience.
I have been there when I have started a passive income stream, and got frustrated quickly because I wasn’t getting any results.
The thing with passive income, is any many cases in order to make it work, you have to put all this upfront work.
To then experience the benefits at a later date.
These have the potential to be very nice.
But to start with, you won’t be seeing much, and its crucial that during this stage you don’t get frustrated and stick with the current plan.
As long as you have done the research and stay consistent it makes it far harder for you to fail.
So do bare this in mind when embarking on this passive income journey.
Ignoring Market Trends
While you want to do your research, make a plan and stick to it, with the passive income stream you plan to build.
You always want to be mindful of what’s happening within that space.
So whether that is doing looking at what competitors are doing in the industry.
Keeping a check for market trends, that may impact you.
Its always important to keep finding ways to adapt to whats going on.
As its those who don’t that get left behind, for others who are prepared to stay on top to take over.
Embracing the Passive Income Lifestyle
As you can that while passive income can be your ticket to you living the life you want, with all the freedom in the world.
There are a lot of steps to make along that road to achieving it.
If this post proved anything, is that there is a lot for you take into account.
You will need to learn, adapt, consistent, plan well and more, to make it work.
However do all these things, and you will be rewarded greatly.
Something I always keep in mind, when I have my own difficulties is that if you want to achieve something different.
You got to do something different.
Getting passive income is exactly that.