What if you could make money while doing absolutely nothing? No, I’m not talking about becoming a Kardashian; I’m talking about passive income. Passive income streams allow you to make money even when you are not actively working. Getting richer while you sleep sounds pretty sweet, right?
Todd had a bit of rough night, but hey, at least he’s still making money with passive income!
Over the years our society has been conditioned to believe that only one source of income is needed, which comes from a “9-5” day job, but nowadays that might not be enough. Prices are rising and buying power is decreasing, so while that day job might have been enough back in the day to buy a house and live the American dream, unfortunately that might not be the same case in current times.
The problem with just working that 9-5 job (which is almost never actually 9-5) is that you’re only making money while you’re actively working that job, and even worse, you’re not even paid for extra time you work if you’re salaried. There are only so many hours in the day, so earning potential is limited from that alone. A lot of people choose to get a second job to increase their income, but again they are trading their time for money and probably hate their life due to working all the time. With passive income you are able to increase your income without physically being at work or trading your time.
I saw a statistic the other day that said the average millionaire has seven sources of income, which makes a lot of sense when you think about it. Not too many people make over a million dollars per year from a job, but there are A LOT of millionaires out there and I can confidently say most of them haven’t just been throwing money in the bank to reach that milestone. They realized they could make substantially more by getting a little creative and thinking outside of the norm.
Passive income is also great because it can offer added security and peace of mind. If you only have one source of income and you lose it you’re going to be in some major trouble with all the bills pouring in. You’re leaving your financial well-being in the hands of a company that could fire you on a whim whenever they feel like it. That sounds pretty stressful to me, but if you have built other streams of income you’re less likely to have to move back in with your parents. I’m sure they love you, but I don’t think either you or your parents want that.
If you’re able to build enough successful streams of income you might even be able to quit that day job one day. Just make sure they’re consistent and able to replace that income you’ll be losing before you get any ideas of telling your boss to kiss your keister.
I know all of this sounds wonderful but be aware that there can be a lot of work that goes into building passive income streams before they are profitable and truly passive. Some forms are created through investing money where you make your money work for you. For example you could buy a stock and collect dividends from it. That’s about as easy as it gets. On the other hand though, some require a time investment up front before they become passive, for example creating a website.
So while creating passive income streams can take a little extra effort initially, it will be worth it in the long run to have that additional income and added peace of mind. I’ll be adding articles in the future about passive income and how to create it so be sure to be on the lookout for that.