What Is Passive Income?
If you’re wondering what exactly passive income is, here’s a quick definition: it’s income that you receive over and over for the work you did one time. Or put another way, it’s money you earn while not working.
Whether you’re relaxing on the beach or playing video games in your living room, passive income dollars continue to roll into your bank account. Active income, on the other hand, requires exchanging your time for money. This could be in the form of a salary, commissions, tips, etc.
The majority of the population relies on active income to earn money and support themselves and their family. Millionaires, on the other hand, focus on creating passive income streams to add more money to their bottom line.
Passive Income Ideas
Now that you know what passive income is, let’s look at some ideas for how you can get started down this path. Most passive income streams require doing some upfront work, so you can reap the benefits down the road. Pick a couple to try from the list below and do some research to figure out if it’s a good fit for you and your finances.
Coronation does not make one a principality, rather it is principles. Going extra mile remained the ribbon that separate winners from losers. However, be careful of what you are going extra mile at. It’s difficult to stand out if you are not stubbornly creative. That is what made Archbishop Idahosa one of the greatest black men ever lived.
I welcome you to the class today on WAYS OF BUILDING PASSIVE INCOME. Wealth is a better universal language than football. Because it excites men, spirits, satan and even God. If God had revealed himself as a poor God, he would not have get any worshipper.
Our life span is divided into work life and retirement. Some retire at 40, others at 60 and 70. The reasons behind such division in life span between work life and retirement life is to give one opportunity to enjoy what he laboured for. That means, that 35 or 30 years of work life is meant to provide money you need when you are no longer working
Joseph, one of the children of Jacob told Pharoah to gather in 7years, what the nation will eat in 7years. That means that given an life expectancy of 70years, we suppose to have gathered all we need at at most by 55years
Passive income is the income that will sustain you when you stop working. It is a creative income because it depends on your creativity, opportunity and contacts instead of number of hours worked. It is different from being self employed or starting a business. Passive income is the money u make regardless of whether you work or not. Effective financial intelligence is the ability to convert your work income into passive income. This is because wealth is not measured by cars and your houses but the amount of passive income you can generate when you stop working.
Benefits of focusing on passive income column of your personal balance sheet is huge.
1. It is mobile and unrestricted meaning that it can travel to remote parts of the earth and work even at night. It’s not restricted by time or location.
2. It grows as you grow older
3. It is fuelled not by your working hour and strength but by creativity and useful contacts.
4. It determines when you are free to retire
5. It has capacity to grow faster and bigger than work income
6. It thrives on leverage(ability to multiply an asset without increasing your investment).
7. It provides opportunities for you to become a freelancer.
There are 7 acceptable ways of building passive income.
1. Passive income from the internet: by selling ideas, referrals, blogging and by generating traffic e.g Linda Ikeji.
2. Intellectual property: such as income receive from books, music, movies, softwares, patent rights and trademarks.
3. Income from stocks: investing in shares remains a dependable way to earn passive income if done skillfully. To excel in this, take time to invest in learning before you commit your money; avoid my brother-in law strategy(investing because a friend or relative persuaded you); Be patient if you invest in stocks; and have a strategy.
Some people also make it as HEDGERS (monitoring changes in stock prices and selling when price differs).
4. Money market facilities: if you are afraid of risk, feel free to invest in TBs, bonds, pension funds, forex and fixed deposit. Reno Omokri posted today that he made huge profit because exchange rate for pounds moved from 460 to 476 within 48hours.
5. Real estate: investing in hotels, hostels, empty lands, residential buildings, parks, shops, market stalls, event centers etc. This is the most dependable because it gives both cashflow and growth in value. Financing is also easily available. That is why most wealthy men cannot stop investing in. Good real estate investors have contacts they can trust. They are not afraid to ask questions and they do not trust people easily because elders lie when money is involved. They are firm as landlord and do not allow love to interfere with business.
6. Multi level marketing e.g Longrich. This is another smooth way to create passive income only that the lies around are more than the truth.
Before you join, make sure they have products they sell and that their products are moving in the market and cheap. Make sure that reasonable income comes from selling and not only from recruiting people. This is because, whether you like it or not recruitment will dry up. Also make sure that you are not in a region where many people have joined the network. This is because if many people are into it, you wont have enough growth prospect. Ensure also that it has opportunities for training. Network marketing is impressive except that its usually early people who joined that make it. Research conducted at Chicago revealed that it is 1 out of 40 persons that reap outstanding benefit from such multilevel marketing business. Another down side is that it’s a full time job , and not a home business if you actually want to make fortune from it.
The question now is, as a beginner, how do I start building passive income?You are not alone. 70% of people over 50years do not have any passive income. The issue is whether you are willing and persistent.
1. Start learning about passive income usually from what you know and love.
2. Developed ways of working smarter. Passive income needs smart work, not hardwork. Example of this is automatic savings (deducting savings from source before your income gets to you)
3. Developed mindset to analyze information and build contact who would supply you information or advise.
4. Shop around for loans and investment opportunities. Learn to attend business meetings, listen to business news, read investment articles and books.
5. Be careful of agreements and negotiate effectively.
6. Diversify selectively and watch your investment portfolio.
7. Be consistent and do not stop when you fail.
8. Have an exit strategy
In conclusion, delay your gratification and start small. Be ahead of inflation and convert savings to investment because in any economy with inflation, savers are always losers. Focus on getting at least one investment every year. Be ambitious but do not be greedy or fearful. Remember that once it is business, 99.9% of people lie. If it is too good to be true, then it’s not true!