Anyone who is thinking about dipping their toe into the unpredictable world of online self-employment has probably heard the term “passive income” being bandied around. Deemed the pinnacle of self-employment success, passive (or automated) income is the perfect solution for entrepreneurs seeking to free up their daily grind while simultaneously generating healthy monthly revenues. It’s also easier to get started than you may think.
As more and more people start to realize the power of the internet and the possibilities it means for working for themselves, the idea of passive income is garnering a great deal of attention. And for good reason. For those who have reached a point where they would prefer to dedicate spending their time with friends and loved ones, rather than being chained to an office desk, a monthly automated income requiring little in the way of ongoing work and maintenance sounds like the ideal way forward.
Although all this might sound extremely appealing, it can also be difficult to get these revenue streams to a point where they produce reliable, profitable results. Developing concepts into a healthy income may require the upfront investment of either huge sums of cash or a considerable amount of time and effort, which unfortunately many of us are lacking in our initial stages of entrepreneurship. Furthermore, even when the stream has been set up, it can then take months or even years for it to start generating healthy returns. It is also worth noting that the term passive is rather misleading, as many types of automated revenue require some degree of maintenance to keep the money coming in. It is not possible to simply set up a revenue stream and forget all about it. It’s quite the opposite. You will need to pay very close attention to the money coming in from that stream so that you can determine whether it requires more input. Investing in property, for example, will require the ongoing maintenance and upkeep of the land and buildings to make it rentable, while writing a book will mean you regularly need to promote it to make the sales. There is also the issue of monitoring your competition so that you can stay ahead of it, while also regularly keeping up to date with your customer base to maintain loyalty.
All that effort and maintenance doesn’t sound so passive, does it? Are we being sold an unrealistic fantasy?
Well, it’s not all doom and gloom. While passive income is not a particularly easy path to financial success, those who have successfully managed to achieve it are very happily reaping the rewards and benefits. After all, sitting back and watching PayPal sales coming through on the phone while sipping a cocktail on the beach is a lifestyle many of us dream of. If you are fully aware of the dangers of falling for an unrealistic passive income fantasy and you are prepared to put in the money, time, and effort to make it happen, this could well be a successful endeavor for you. It is particularly appealing to those who want to take a shot on Bitcoin investments or playing strategy-based tournaments such as blackjack and poker, as there is a degree of risk and excitement that comes with risk-taking. The secret lies in creating a revenue stream from something you are truly passionate about so that it is not so much of a chore dedicating the initial startup time and money to get it off the ground.
So, how do you get started?
Once you’ve done your research and you still feel that this is the path for you, there is a multitude of ways to start generating money. For those who are financially savvy, buying up high-income producing dividend stocks should result in a healthy stream of automated revenue (if you have purchased enough of them). Similarly, buying up mutual funds and annuities will require an upfront payment but can be beneficial in the long run. Using your savings to invest in peer-to-peer lending platforms provide you with the opportunity to generate an income stream from interest payments while using cash back credit cards wisely will also give your bank account a boost.
Using property is one of the most popular ways of generating automated income; though it also requires quite a high degree of maintenance and upkeep to keep the money coming in. The success of Airbnb has meant that anyone can now turn their home into a potential source of income. Renting out a room or even the entire house for a specified period is now a feasible way to bring in extra cash.
If you are blessed enough to be able to afford to buy your own property, renting it out long-term is another way of boosting income and keeping extra monthly payments coming in. You do not have to rent a property out to earn money on it, though, as most real estate naturally accumulates in value over time. Keep a look out for property in an up-and-coming area or one that requires a degree of modernization and patiently wait to take advantage of rising markets. This is not always a risk-free form of income, however, as a downturn in the market can result in losses.
If you are more technologically minded, creating an app will put you at the forefront of the digital revolution. Many mobile apps have free versions of the paid app with limited functions that encourage the user to sign up to the paid app to access the full range of facilities. Another digital revenue stream is the concept of affiliate marketing; this is essentially a way of advertising a brand or company on another brand or company’s site for a small fee.
Digital products are also great because they do not require a huge startup investment. Starting a blog or writing an eBook are both ways of potentially generating income without paying out large sums of money. Almost anyone can set up a free blog or sit down to write a user guide on a subject they have expertise in. The difficulty, however, comes with promoting the site or book after it has been created.
Ok, ok, we get it. Passive income is not a mythical unicorn and can be achieved. But is it really worth it?
It all depends on whether you have the start-up overheads of money, time, and effort to spare. Growing a healthy profit from passive income takes a serious amount of dedication and research, so it is essential that you are committed and focused on making it happen. Having said that, creating a product that you are passionate about or learning about investing in dividends and stocks are all worthwhile life skills to have in any event, so why not put them to good use and earn some money from it.
As the trends towards flexible lifestyles and self-employment become increasingly difficult to ignore, it is only natural for people to search for ways to make money without breaking their spirits and bank accounts in the process. While not a new concept (renting out property has happened for centuries), passive income provides entrepreneurs in the digital age with the creative spark they need to get their empire-building dreams on the right track. So, what are you waiting for? It’s time to invest in yourself!
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