That passive income though!
Passive income is my ultimate financial goal. Here is why:
Passive income is a stream of money flowing to you, without you doing anything.
It is like winning the $1000 a day for life lottery. How great would that be?
I first got enlightened by this by reading the Smart passive income blog by Pat Flynn and then reading the 4 Hour Work Week by Tim Ferris. It expanded my mind into what was possible so let me share what I learned from it.
What is passive income
Passive income is ideally an income stream in which you don't have to do anything and receive money month after month.
Although it sounds amazing, what I found out is that MOST passive income is not really passive. You still have to manage them. The most typical passive income are dividend stocks.
Dividend stocks are shares of a company in which, they pay you 2-4 times a year on extra income while you don't have to do anything.
Although you don't have to touch it, it is still smart to check on the stock from time to time and to be aware of any potential crisis with your stock.
Types of passive income I can think of
I don't know every single passive income out there but here are the ones I do know. I think I will add to the list as I learn more and more.
- Rental properties (Home, apartment, office, storage unit)
- Car space/garage
- Open office (Example: You create an art studio with all the equipment and you rent out to people who wants to use your equipment and space)
- Dividend paying stocks
- You tube videos
- Blogging with clicking ads
- Affiliate marketing (When you are selling other people's products for a commission)
- Drop shipping business
- Selling a digital product (ebook, software, instructional videos, etc.)
- Amazon FBA program
- Renting out taxi medallions
- Zazzle (licensing your artwork to make shirts, frames, etc.)
- Lending money
- Investing in someone else's business
- Any type of business that you can outsource
- Phone app
- Create a franchise
- Buy a franchise
Negative things about passive income
Their are a lot of things that you need to know about passive income.
A lot of the things above require either a lot of upfront work or a lot of money. For example: Dividend paying stocks, you need at least 2 million dollars in there to be able to live off of the payouts.
Rental properties obviously costs a lot and you will need to borrow money.
Creating affiliate marketing sites, you need to learn and then take a while to create the website/videos or whatever platform. Then you have to create a systematic funnel to make it truly passive.
On top of that, most passive income does not have a huge pay out compare to direct sales.
BUT... This is why passive income is awesome
The trick with passive income, is to create MULTIPLE streams of passive income throughout your life time.
Imagine you are able to create an extra $100-$1000 a month EVERY SINGLE month. By the end of the year you will be making $1200-$12000 a month PASSIVELY.
You do this for 4 years and you will be making $4800-$48000 a month.
Can you RETIRE with that type of money coming in every month? Even at $4800 a month, you are making the national average personal income in the United States. You will probably be working 1-4 hours a week. Would you like this kind of life?
Well I DO!
You will probably think "how in the world are you going to create a passive income stream every single month?!"
Well, you don't have to do every single thing on that list to do so. You just have to get good with a few.
Take Zazzle for example. Every single day, you are creating 3 designs. Does this sound possible for you? That is 90 designs a month. With 90 designs, you will probably not even make $100 a month BUT if you continue this for a year, then you will have 1080 designs up. With 1080 designs, you are definitely going to make over $1200 a year.
This also applies to Youtube videos. It just takes time for it to build up with MOMENTUM. The more you have out there, the more it will EXPONENTIALLY GROW.
This is how I plan to retire with passive income
As of right now, I own 3 businesses. They are not passive income but I will eventually outsource all 3 of my businesses. My main goal is to use the money I earn to buy passive income.
I am also doing peer to peer lending. An example of one, is where I am lending someone $20k and I get $200 a month for however long he is borrowing the money.
Eventually I will buy rental properties. The more properties I buy, the more lenders are willing to lend me to buy more properties.
On top of this, I will create more small businesses including other ventures such as a youtube channel, affiliate marketing, and software developments.
My goal is to semi retire by the time I am 40 years old with at least $50k a month in income.
This is a very broad financial plan but I do this on purpose. One thing that is always certain in life, is change. Opportunities may come and fall backs may come and I may have to pivot. This is why I always generalize so I have room to change my plans.
I hope this helps you in some way or form.
If you know any other passive income methods, please share as it helps me and the community.