Whether you want to be comfortable enough so that you don’t have to worry about the bills and day-to-day costs of living, or you want a higher level of wealth for yourself and your family, creating a passive income is vital for realising your plans of the future.
What is a passive income?
A passive income is a monetary income which needs little time, maintenance or involvement. Ideally, you will generate a passive income through an act which, once set up, will need little of your time to maintain, but will provide you with significant income. You could describe it as money for doing nothing, or at worst, for doing very little. What’s not to like about passive income?
Why can’t I just work to get rich?
If you’re focusing on working all the hours in order to get rich (or even just to create a comfortable lifestyle for yourself), I’m sorry to say that you’ve got it all wrong. The problem is that generally, the more we earn, the more we spend. We move the boundaries of our lifestyle, making it more extravagant with each pay rise we receive. Rarely do we stick to a lower-income lifestyle when we rise through the ranks and earn more. And then there’s the time thing to consider. We only have 24 hours in a day. Do you really want to spend all day, every day working? Passive income allows you to free up your time but still have earnings coming in.
I don’t have much money to spare. Don’t you need money to make money?
Sometimes, yes. Other times, no. Some, methods of passive income streams like investing in stocks and shares do require your financial investment up front. Others require skill, your time and some patience.
How can I create a passive income?
There are so many different ways in which you can create a passive income. You could invest in property and collect the rent, or invest money into stocks from which you will receive dividends. Methods of creating a passive income without a huge financial outlay up-front include publishing eBooks, DVDs, CDs or software, creating websites to generate advertising revenue or by using something as simple as registering with cashback sites which pay you back money whenever you spend on your usual online shopping.
Time is money, but time is precious too. Generating multiple passive income streams will allow you the best of both worlds.