Passive income has become very popular in the past years and especially in the entrepreneurial space.
But what is it?
Passive income is money earned with minimal effort on a daily basis or minimal upkeep.
Examples of this are blogs or investments. With a blog, you put the effort in to write the article in the first place but once you are done the article will drive traffic for the foreseeable future. Same with investments you put the time in initially to find a good investment and gather the money for the venture and then it will pay recurring dividends over time.
So to summarize passive income is income from sources that have been set up to run autonomously or with minimal upkeep. It usually takes a lot of time to initially set up but then pays recurring income over time without directly ionputing your time.
People prefer this method of income because apossed to trading your time for money you can earn money without the constraint of your time. This is so powerful because if you can master this skill of making passive income you can use your now free time to make more passive income sources and truly differentiate your time from how much money you can make.
This is the factor that most people don’t take into consideration when they are trying to increase their income. If you trade your time for moeny, for example, a brick later only earns money for the hours he is laying bricks. If he wants to earn more money he has to spend more hours laying bricks. This takes for other areas of his life like family and leisure time just to earn more moey. If you can differentiate your money from your time it removes this constraint and you can increase your income without directly putting in more time.
If you are interested in making passive income here are the key factors.
- You need to make an income source that can run without your direct time input. Online businesses work well for this because your website can usually do most of the tasks you would have had to trade your time for.
- Make it scalable. This is how you increase your income if your source is scalable you scale it to match the income you desire from that source.
- Enjoy your passive income source. Do your research income different sources and invest your time into a source that you will enjoy.
- Don’t stop at one source. You can make multiple sources that work together and benefit each other.