The power of passive income can actually change your life; it can allow you to live the life you want to live without ever having to worry about finances. If you want to know the quickest way to financial freedom, it’s passive income. With passive income you are truly free to do as you please while you don’t have to work continuously, in fact, you’ll literally be making money while you sleep. There are so many ways of creating this type of income that one might wonder why everyone doesn’t do it. The real reason is that most people don’t know about passive income, but you are about to find out why passive income is the most powerful source of income.
What is Passive Income
Passive income is a type of income that only requires a “one time effort”, and the beauty is that you get paid continuously long after that “one time effort”. It’s a type of income where you work hard first, and then you have the flexibility to sit back as the money rolls in. However, don’t mistake passive income for residual income, residual income is income created that requires maintenance after that “one time effort”, such as being a sales person for a specialty food business, where someone still has to phone you to re-order and you still have to deliver once in a while. The network marketing company Mona Vie for example is residual income, creating your own music album that sells in stores years after you’ve created it is passive income. Residual income is also a great source of income, but you’re not completely free to do as you please since you still have to maintain your relationships with your customers.
Passive Income Leads to Financial Freedom
When you create streams of passive income, you are creating real financial freedom for yourself, not financial freedom where you’re constantly busy working trying to make big money. Financial freedom is the ability to be totally free, while making the desired income you want, and with passive income, you only have to work once and you make money from that “one time effort” for the rest of your life. For example, when Steven Spielberg produces a movie, he gets a cut of the sales of that movie for the rest of his life. So even when he’s sitting at home years after the movie has reached its peak, if someone purchases the movie at a store, a cut of that purchase goes to Spielberg, and this is why passive income is the fastest way to true financial freedom.
Ways To Create Streams of Passive Income
There are many ways to create passive income, and the best solution would be to create a bunch so that you have multiple streams, and you’re not making money off of just one source. If you have a special talent, you can create passive income off of it, for example a singer can release CD’s, and sell them online forever, while he makes more albums. Think about Elvis Presley for example, he’s literally still making money off of his albums even though he has passed away a long time ago! Another way to create passive income is through information, if you know timeless, specialized knowledge such as how to invest in stocks, then you can write a book, or create a blog and make money from it, it’s really that simple. The key to passive income is to sell something that will be useful years from now. If you decide to create a blog with specialized knowledge, make sure that knowledge is timeless, and not something you have to be updating every couple months, instead of doing a blog on celebrity gossip which changes constantly, why not do a blog on how to become a more fit and healthy person because that knowledge will still be useful years from now.
Here are some other ways to create passive income streams:
- Investments: Stocks, mutual funds, bonds, treasury bills (Warren Buffett makes money while he sleeps)
- Systemize Your Business: If you create a business, you can systemize it to the point that you no longer need to be their for it to run (Ray Kroc created McDonald’s in this way)
- Specialized Informative Products: Books, Blogs, Audio/Video products (for example a magician can create “how-to” videos and sell them forever)
- Talents: Musicians can create albums, music producers can lease their beats to musicians, writers can write their own stories (think of JK Rowling and how much money she’s exponentiated off of Harry Potter)
It’s possible for anyone, including you to create different types of passive income because even if you work a job you truly love, creating passive income on the side can only add more value to your life, and your bank account. Passive income is fast, easy, and requires the least amount of work to create true financial freedom where you can go out, do your leisure activities, and still be making money.