Your guide to earning passive income
So you’re interested in building passive income? Perhaps you're feeling the strain of rising living costs due to inflation, want to pay off your mortgage or simply desire more funds for travel and luxuries. You could also be striving towards financial freedom, seeking to break free from the paycheck to paycheck cycle or from the 9-5pm job. Whatever your motivation, passive income offers both POM POM - plenty of money - and peace of mind.
In today's digital age and information-driven economy, there are more opportunities than ever for generating passive income. From scalable digital products and network marketing businesses to investments in real estate, stocks, or interest-bearing savings, the avenues are diverse. But with so many options available, how do you determine the right path for you and where to begin?
What is passive income?
Passive income is essentially earnings that don't require you to trade your time directly for money. It's about building a secondary income stream to reach towards your financial goals.
It’s typically generated from scalable businesses like digital products or network marketing companies where you're not involved in the continued generation of revenue. It also can be from investments in assets such as real estate, stocks, or savings generating interest over time.
Why build passive income?
When you can create an ongoing cash flow, it liberates you from the time-for-money exchange, allowing you to invest your time in what truly matters to you. Imagine waking up each day without the pressure of needing to clock in hours for a paycheck. A life where your income grows steadily, even when you're sleeping - affording you the flexibility to prioritise health, spend quality time with loved ones, pursue passion projects, or explore your bucket list travel places. The possibilities are endless!
Is anything really passive?
Don’t be fooled, most people or ads claiming you can get rich overnight are usually not telling you the entire truth. The reality is, most businesses demand upfront effort to reap rewards later. Whether you're starting dropshipping, selling digital products, hosting through Airbnb, blogging, or investing in dividend stocks, initial investments of time, money, and effort are typically required. However, once established, the potential benefits - earning while you sleep and seeing your bank balance grow - can be magical.
How to start a passive income business?
It’s a common misconception that you need a lot of money to build passive income. This is true for some businesses, however you can absolutely start something with little start-up costs. There are numerous paths you can take when exploring business ideas. However, what’s the right avenue for you? How much time, energy and money are you willing to put into something and for how long? What if you don’t see results? Here are 4 tips to help you think about the right decision to make:
1. Understand your outcome
When considering what online passive income business to start, clarity of purpose is essential. Define what success means to you beyond money. Consider how your business idea aligns with your values, strengths, and long-term aspirations. What is it that you were put on this earth to do? Was it to make a difference, create something meaningful, or simply achieve financial security?
If you’re someone that values relationships, community, making a bigger difference, is sitting in a dark room, trading stocks at night going to be the path for you? What if you’re someone that’s gifted at communication, would you consider going down a path of blogging? What are some of your strengths and values? Understanding these motivations can guide you towards selecting the right path and staying committed through the inevitable challenges.
2. Find a mentor
Finding a great mentor can be the key to achieving success in any field. A mentor will not only shine a light on the steps to take, but they can also provide accountability and inspire you to break barriers and go beyond your limits. Mentors are individuals with proven experience and success in the area you wish to excel. They can see more potential and ability in you than you see in yourself and help bring it to the surface.
“A mentor is someone who has already done what you want to do and is successful at doing it. Don't find an advisor. An advisor is someone who tells you how to do it but may not have personally done it.” ― Robert T. Kiyosaki, Rich Dad's CASHFLOW QUADRANT
The best way to find a reliable business mentor is through networking. Connect with people on LinkedIn or ask your trusted network for referrals. Clearly describe the type of mentor you’re seeking, as many are willing to make introductions. The most valuable mentors often come through personal connections. Therefore, invest in building your network, as most opportunities come from who you know rather than what you know.
4. Join an online program or community
You don’t need to be the next Elon Musk or Albert Einstein to achieve success in business. You don’t even need to come up with a groundbreaking idea or reinvent the wheel. Simply follow proven paths and systems. One of the most effective ways to do this is by joining an online program or business community. This way, you can be in business for yourself, but not by yourself. Learn from other successful entrepreneurs on the same journey, and know that you don’t have to go on the journey alone.
4. Don’t give up too soon
To achieve tangible results, you must be willing to stick with something long enough. Try, fail, adjust, and keep going. Anything worthwhile in life comes from consistent effort over time.
Take Jeff Bezos, the founder of Amazon, as an example. He started the company in 1994 as an online bookstore. Despite early scepticism from investors and industry experts, he navigated through the dot-com bubble burst and expanded Amazon into the e-commerce giant it is today. It took him ten years of relentless effort before seeing significant results.
Similarly, Colonel Sanders began selling chicken at the age of 40 and dreamed of opening his own restaurant. His recipe was rejected 1,009 times before finally gaining approval and turning it into a KFC empire.
Thomas Edison, famous for inventing the practical electric light bulb, once said, "I have not failed. I've just found 10,000 ways that won't work." His determination and countless experiments led to numerous other inventions, making him one of history's most prolific inventors.
“Success is not final; failure is not fatal: it is the courage to continue that counts.” - Winston Churchill.
Building passive income isn't just about money; it's about gaining the freedom to live life on your own terms. While the journey may demand initial effort, the potential rewards - financial independence, time freedom, and personal fulfillment - are well worth it. Stay committed, learn from mentors and those who have succeeded before you. Your future self will thank you for the choices you make today.
