Chances are passive income is a term you have come across recently.
Maybe just like it did to me a while ago, it sparked an interest and curiosity inside of you.
After all the whole idea of passive income, is the ability to earn without translating your time and effort.
Not an idea that many people have been taught about.
Has lets face it, this isn’t the ‘recommended’ way to become successful financially.
However let me tell you it will be a game changer for you, and here in this post I will be delving deep into the role of it.
Table of Contents
Understanding Passive Income
The best place to start is with passive income itself.
So if you don’t know what exactly it is.
Well, its a way of earning that requires minimum effort to keep coming in.
This is the direct opposite of the more common way of earning called active income.
With active income, you are trading your time directly for money.
However, with passive income, it doesn’t quite work like that.
So as you may have just clicked on right now, there is a lot of potential.
If you look at nearly every single successful person.
They are in there position because they are earning passively.
Most of the time they are at the top of the company, and have set the foundations and the systems in place, for money to keep coming in.
Sure they will work a little bit, has no passive income is entirely passive.
But for the most part, everything is ran on autopilot.
Sounds amazing right?
But the question you may be asking is why exactly is passive income so important for financial independence.
At the end of the day it comes down to two things.
It increases your time aswell as your freedom.
Passive Income: The Gateway to Financial Freedom
Now the thing about Passive Income is expands the mind to a realm of possibilities.
I remember when I worked my first ever job.
My mindset towards that was set in concrete.
Work these hours, to get end result, that being a minimum full time salary.
Thats all there is to it.
Its hard to think any otherwise when your living it too.
Now the reason I say hard, is because some people are able to acknowledge that there is more out there.
I mean every day I worked this job, while its all I knew, there was always a tiny part of me that knew there is more to achieve.
You just have to walk the streets of your city, where around you will see the potential.
Now with this financial independence that you gain from passive income, you can benefit in multiple ways.
You can pay whats required to live your desired lifestyle.
There is also the fact that you can have the freedom to live how you want without money being a factor.
Its for this reason that some people earn alot of money and move to countries such as Thailand and Indonesia where they could live the rest of there lives without earning.
Compared to expensive places like the UK and USA where living costs are high.
Now with you now knowing more about this, I want you to imagine something.
Every day you wake up, you don’t have to worry about reporting into work.
You have a team or have a system set out to ensure that things run smoothly and you keep making passive income through your diversified streams.
You get to decide whether to have today or tommorow off.
That is the life that passive income can enable.
It actually allows you to enjoy your life more.
Now yes, money won’t buy you happiness.
But its much better to live on your terms with money then not on your terms.
Building Your Passive Income Streams
Your probably thinking, well thank you for listing out all the great things about passive income.
But how exactly do I go about achieving it?
Surely its not going to be as easy as waking up one day and just choosing to live like this.
Well yes and no.
Half of it is mindset, the second half is action.
So once you’ve got your head fully focused on this, you can start looking at building these streams.
Here are a few ways in which someone like yourself, could start that passive income portfolio.
Investment in Stocks and Bonds
If you want an easy low entry way to get some money coming in over time, then stocks and bonds aren’t to be turned down.
Here you will be entering the market, putting small amounts of money on various stocks and bonds that are on the rise.
Now since your investing in companies, its always important to know.
That not only is your capital at stake.
But also that depending on who you invest in, you could earn or lose.
This is why you should do thorough research and if you can scoping out stocks and bonds to invest in alongside a financial advisor.
Real Estate Investment
Need I say much about real estate.
I am sure most people out there no the potential for earning passive income through owning properties.
Now back in the day, it used to only be physical houses where people live that you could invest in.
Transport to todays time, and you can actually invest in loads of types of online real estate too. From websites to social media pages.
As much as I love real estate and how its a a great way to bring in way more than a full-time salary each month.
It does have its drawbacks.
That being for one it is risky, if you don’t know what your doing. So always do your research and don’t pick a property like throwing a dart to a map.
Secondly without stating the obvious you will need some capital to some extent.
Whether that is putting a small down payment or buying a property out right, its not something for those who are starrting from rock bottom.
So by all means go for it, however depending on your financial sitiation you may want to start in other areas first.
Start a Blog or YouTube Channel
Now talking of online real estate, we have blogs and of course YouTube channels.
These have proved to be fantastic opportunities to earn passive income.
With the way these are set up, you won’t need to earn for your time, as these can bring you money while your fast asleep at night.
Now YouTube and Blogs are a passive income source themselves, however you can also split these into multiple sources too.
You can earn through the popular ad revenue model, that alot of blogs do and YouTubers have benefited from.
But you can also do sponsorships, affiliate marketing, sell your own products and much more.
Remember though, don’t just go out there and spew loads of rubbish out there.
These are your assets that you will build so make sure you content is of the highest standard for your readers/viewers.
The Power of Diversification
As we have vaguely touched upon, is diversification.
Now there isn’t too many things better then one passive income source.
But I will give you a hint, its multiple.
In fact don’t stop creating them, as long as you can keep up with it of course.
Being diverse with your passive income portfolio, is gonne make you indestrutible.
Think about it, if your working one job and you get made redundant.
Maybe the company has had to let alot of staff go.
Guess what you go from what ever you were getting paid.
Until you get a new job.
However through setting up various income streams it doesn’t matter if one falls apart, you have backup.
Which is very key.
So just like everyone who goes on Love Island, never keep all your eggs in one basket. Spread them out.
The Road to Financial Independence
So there we have it, not only should you have a significant understanding of the role of passive income.
But you know exactly where to start, as well as the reasons for you wanting to achieve it.
I would love to say that passive income isn’t needed.
But I feel like I would by lying to myself and you if I did.
Its very important in providing stability as well as happiness, something a lot of us desire deep down.
Even if it is masked somewhat by the current world we live in.
Do remember though, this isn’t some short road.
I’m talking more the length of Oxford Street, where you will need to stay committed and consistent in building these income streams.
It won’t just happen over night, however every bit of passive income you bring in to your account, will get you closer to your end goal.
I do hope you enjoyed this guide and is made you determined to strive for that financial independence.
If you have comments or questions make sure to leave them down below 🙂