What is passive income?
By definition, passive income is money that is generated passively. In other words, it doesn’t require daily effort to earn it or maintain it. It can often be something that, once established, will continue to generate revenue indefinitely. Passive income is like an automatic car wash. Once you do the initial requirements, such as making payment and aligning your vehicle with the gate, the process becomes effortless. You just get to sit back and enjoy the reward of a shiny car. Pretty cool, huh?
Why is passive income overlooked?
You may be thinking that there has to be a catch. If it is possible to create income on autopilot, why doesn’t everyone jump on board? In many cases, people tend to disregard passive income because they don’t think it amounts to enough to matter. Remember those snowflakes? A lot of passive income starts out generating very little, but lots of little can add up to something significant when given enough time. Especially when you actively develop multiple streams.
What are examples of passive income?
Many people have dabbled in passive income and may not have even known it. If you have ever earned interest from a savings account or received a dividend on a stock, you, my friend were generating passive income. Other examples of passive income include things like:
- Rental income from a house, cabin, condo, or business space
- Podcast, video, blog or website ad or referral revenues
- Royalties or commissions on digital products
- Interest from peer-to-peer lending or other investments
- And MANY more
Where should I start?
A great way to dip your toes, so to speak, into generating passive income is to start with something you already love. If photography is your passion, consider uploading your photos to an image selling site. If you adore eating at fabulous restaurants, maybe a foodie blog is where you start. If you don’t really have a hobby or passion that you want to share, another avenue to explore is your knowledge and experience. What do you know a lot about? Are you an avid gardener or an expert pastry chef? Do you understand how to repair vehicles or teach toddlers? All of these things could hold potential value as passive income opportunities.
How do I grow it?
Once you have established your first stream of passive income, you should begin to look for ways to expand that stream or start working on different, separate streams. While a few dollars a month flowing through your blog or podcast may seem minuscule at first if you begin combining that with multiple other small income inflows, you might be surprised how it all starts to add up. After a few years, you may even find that you have a “snowstorm” of passive income on your hands.
At CleveDoesMore, the best part of our job is helping people make informed choices to minimize their risk while building equity and wealth for their future.