What Is Passive Income?
Passive income is the type of income earned on regular basis with very little or no effort required to maintain the flow of the income.
To become rich, or create wealth that can give you time freedom and financial freedom, you must understand the basic principles or source to which income can be easily generated. I used the word EASY, because, passive income need not require toiling and sweating to be financially rich.
If you are working soo hard to get by, it is time you get to learn and understand what exactly the rich people in the world do to get their money working for them around the clock.
The key to wealth creation depends on what you do with the little money you already have, your time and how you managed both time and money. Its either you’re currently working 40 to 48 hours a week, or you are allowing your money to work for you 24 hours a day and 168 hours a week.
The reason why one can only be productively generate income in 48 hours a week is because you can only be in one place and in one job at a particular time.
As such, we can only generate a lenear income. Anyone that wants to create true wealth must understand how to generate multiple streams of passive income.
Watch Video Here On The Truth About Passive Income.
Passive income can be income generated from business activities which does not requires the earners participation or their physical presence in order for them to earn money.
Typical example of such income can be income generated from online sales, stocks trading, forex market trading, options, internet home based business, real estate business and much more.
This is usually income not earned as a result of working too hard in a mania job. A Passive kind of income does not come as a result of your time and hard work.
If I purchase a rental property for $100,000 using a 40% money down payment and borrow 60% from my bank. If that rental property is generates a 8% net yield, I would be generating a net rental yield of $8,000 per year or $666.66 every month. The question now is, how much is my monthly mortage repayment cost?
Lets say my monthly repayment cost is $360 per month. $666.66 subtract $360 mortage repayment, I will be left with a net rental income of $306.66 cents. $306.66 cents is a passive income I do not have to trade my time and effort to earn.
Another typical example is in book publishing. If it cost me $100 to print and publish an ebook that is selling for $5 per download on amazon. If 20 people download the book, 20 multiple by $5 will definitely earn me back my $100. Month after month, the more people that will download the ebook, the income that is earned without me doing any further work is a passive income.
Intenet marketing is one of the best means to generate passive income. The method in which the internet operates is just too amazing. Lets say you are promoting a product that requires continous consumption month after month. As an experience internet marketer, you get leads and grow your list. Let assume the list grows up to 80,000 subscribers. You then have an offer that is sold for $20. If a list of 80,000 subscribers can convert at only 6% buyers. 80,000 x 6% buyer will give you a buyer list of 4,800 buyers x $20 which will rake in a net profit of $96,000 monthly passive income for a job done once.
It is very important that we seek for means of creating passive income if you truly want to achieve financial freedom. I hope as you work soo hard in your current job, you’ll as well start thinking on what you much do in order to start generating some passive income.