Dreaming is nice, but nothing happens unless you actually start making some changes. And, that is just what I plan on doing over the next few years.
Currently, building passive income streams is a big interest of mine because I want to continue to bring in an income while being able to focus on other goals of mine (which may not generate income now or ever). I also want to diversify my income streams so that I am not too reliant on one area.
This way I can focus on what I want to do while not having to worry about how much money I am bringing in.
Below are different passive income-related questions you may be wondering. We will discuss what passive income is, the positives of earning passive income, passive income ideas, and the hard work that goes along with it.
What is passive income?
To start off, we should probably answer the question “What is passive income?”
Passive income is when you make money but there is not a TON of work to do in the future in order to continually earn more money. You, of course, need to do something in the beginning in order to set yourself up for the income, but after most of the leg work is done, income continually comes in without much effort from you. There might be a little maintenance here and there after you set it up, but overall the passive income stream should continue to operate on its own.
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Why would a person want to earn passive income?
Passive income is great, and I quickly touched upon some of the positive reasons above. Some of the positives of earning passive income include:
- You can make money with little work to maintain it. This is a huge positive of passive income! Who wouldn’t want to continue to make money with little work needed to maintain it?
- You want to do what you love while still making money so that you can pay your bills.
- You want to retire but you would feel more comfortable doing so if you were still bringing in an income.
- You want to start a family. Passive income may mean you have more time to devote to your family since you may be able to work less. This is a big reason for why I want passive income!
- You want to travel extensively but you want to bring in an income to support yourself.
What are some passive income ideas?
Passive income sounds great, right?
You are now probably wondering how exactly you can go about earning passive income. Some passive income streams may require more set up than others and some are riskier than others. Each of the ways below have their positives and negatives so definitely do your research.
Some passive income ideas include:
- Affiliate marketing. Affiliate income is what I am currently working on. I earned around $10,000 in affiliate income in just the month of March, and the majority of those earnings came from just a few posts that I wrote awhile ago. While blogging is definitely not passive because of the amount of work that goes into it, affiliate income can be very passive in that old affiliate reviews can continue to bring in income. If you want to start a blog of your own, read here.
- Rental real estate. Some consider rental real estate passive, while others do not. If the rental property is in good shape and you have good renters, then there is probably very little work that needs to be done in order to continually bring in an income. This is considered especially passive if you outsource the property management duties and home maintenance tasks.
- Dividends from your investment portfolio. This is one of the passive income ideas that many take part in.
- Distributions from companies in which you are not active in. At my old day job as a financial analyst, I saw many clients who received hundreds of thousands of dollars a year (or sometimes even in the millions) from distributions where they were not active in the company. Must be nice!
- Royalties from something you have created, such as a book, a patent, etc.
- Running a laundromat. Yes, you will need an employee, but these are typically low cost businesses. Learn more at Are Laundromats Profitable? How Much Do Laundromats Make?
Is it hard to earn passive income?
Passive income through any of the passive income ideas above requires hard work but it IS attainable.
Passive income is definitely not a way to get rich quick. You may have to sacrifice sleep, work multiple jobs, and more in order to build your passive income stream. Passive income usually requires a lot of hard work in the beginning, or everyone would be doing it!
If you want it badly enough though, then earning passive income can be well worth it. If you do it right, you may be able to earn an income well into the future with little maintenance needed.
Are you interested in any passive income ideas? Why or why not? What is passive income to you?