Working for someone else will never make you rich or give you a lot of money. The best way to get the money you want for the things you want is to develop passive income. This type of income requires little work to keep it going. Although it will not happen overnight, having little effort to sustain it enables you to multiply your sources of passive income over time – possibly enabling you to no longer need a full-time job – or any job.
The First Step
The first thing you need to do to earn an ongoing passive income is to decide what method you will start with. Depending on which one you choose, it may need considerable cash upfront for an investment. This would be especially true if you intend to purchase an investment property.
It is important to select a passive income option that you are interested in to make it a success. You will need some time and possibly money to start. Here are some options you can choose from:
- Real estate investing (also REITs)
- Index funds (stock market)
- Write a book or ebook
- Create an online course (post at Udemy.com or Kajabi.com)
- Peer-to-Peer (P2P) loans
- Build an app.
The above passive income streams require little in the way of time. Many other ones are available that require more time such as selling products online, running a blog, creating videos, buying property, affiliate marketing, and many more.
Set an Income Goal
Creating a passive income that will enable you to live off of completely requires that you set a goal. Decide how much you want to earn and by what date or age do you want to earn it? It will take some time to earn enough to be able to live off of it, so set a realistic goal. Consider such factors as how much you will need to live on and where; how large of a monthly budget do you want or need to live at that level, etc.?
Work on One Passive Income Type at a Time
Do not try to create a bunch of sources of passive income at the same time. Get one started and then bring it up to the level you think is good, and then add another one. Make sure the first one is growing and bringing in some income before moving on to the next one.
Put Some Money into Savings
As your passive income starts flowing, put some of it into savings. Set money aside for short-term projects such as education or vacations, some for retirement, and some for emergencies. Do not let it sit on a shelf in a jar not collecting interest somewhere.
Besides setting a goal for your income desires, you should also have a savings goal. This should be more than just a minimum. As you make more money each month, seek to put more aside for the future. If you invest in stocks or mutual funds, continue to add some money to it to create even more interest.
Calculate How Much You Want for Retirement
If you decide that your goal is to retire early, carefully calculate how much money you need before doing so. If you would like to retire when you are still young, do not forget to add in costs for inflation, taxes, and health insurance.
Choosing which passive income stream to start with should be thought out carefully. It should be something that you are interested in and something that you know you can invest some time and money in at first to get it going.