PASSIVE INCOME :: learn to change your financial life forever
Everyone wants more freedom to do whatever they wish in life. If you want to spend much time on your hobbies or your personal life, you have to ensure that you have enough time to do so after work. These days it is hard to live everywhere, so most people work longer to earn money and pay their bills. If you want real financial freedom, you’ll need to have income from work that takes less time so you have more free time. This is only possible if you are educated about finances and you have the confidence to work on your own. You can be self-employed and earn passive income, but only if you understand how to do it. When you work for a boss, you have to work the hours they demand and it usually takes up much of your time.
It’s critical to understand the passive income concept:
*Passive income is cash flow that is generated on a regular basis, requires minimal to no effort and gives you time to do what you want. There are many types of passive income. Some examples include:
*Real Estate income from buying/selling property
*Rental income from renting out property that you own
*Royalties from selling intellectual property like music, books, manuscripts, computer software, patents, etc.
Why you need to understand passive income:
If you are an employee at an hourly job, you might work 0900-17:00 (9AM-5PM) for a total of 8 hours per day. Don’t forget to add in travel time up to 3 hours, and for most people that means spending 40-55 hours a week working for your employer. When you come to retirement age, you have to let your job go. Most of your life you spend working for other people. It can appear that a high paying job is good, but working for a boss comes to the same end no matter what. You work for hours and you earn based on the hours you spend working and traveling – that is called active income. If you can’t work on a particular day or you want time off, you don’t make money. You have to put in time every minute that you want to earn anything!
If you generate passive income instead, you do the work up front to create something that will generate cash flow all the time. For example, if you research properties and invest in a house that you can rent out, it takes time and creativity up front. Once you rent the property out, you can do what you wish and money continues to flow in from rental income. There are many businesses you can run that will generate passive income. You do have to learn some basic business skills to change your life this way, but it’s important! It is not difficult to learn how to do it! Many of us don’t have stability in our finances because we aren’t educated about financial issues. Here we will give you the basic concepts about active and passive income so you can shift gears and have a better life! Within a small time frame, you will have the financial education you need and then you can build the life you have always wanted. Some people will tell you that it is very easy to make passive income overnight and get rich easily. The truth is that it is not easy and it does not happen overnight, it takes a lot of hard work, but it is NOT impossible! “NOTHING IS IMPOSSIBLE!”
For living everyday life money plays a necessary role. Money may not be everything, but you need a certain amount of it to survive. If you have more money, you will generally be able to better provide for yourself and your family. To do this effectively, you need more education about finances. To start you off right, consider this: we can break down income types a little further and there are 3 main types:
*Active Income: Based on exactly the time you spend earning money.
*Passive Income: Income that is automatically generated after you set up a method to earn.
*Residual Income: After you create something, you gain income from it or it gives you continual cash flow in the form of royalties, subscription fees or similar regular returns.
Every day we face difficulties while we finish school and try to find work or a job. School doesn’t teach us a lot about how to earn money or manage finances. There are some basic academic lessons about money management, but not enough to prepare most of us to generate serious income. After school you face real life and in real life, it’s so difficult to have a better life that gives us excellent financial freedom. If you are lucky enough to get a job with a high salary, that seems good at first, but its false security. Think about this: If you earn only based on the time you spend working, you are basically selling the knowing the gained in school and getting paid based on active time spent. Is that what you want to get out of all the years you spent in school? What will happen if you lose your job or want to retire? How can you change your outlook and your financial future?
Passive income and how to change your financial future:
Let’s talk about passive income alongside right and wrong concepts of living. If you work for an hour and you earn a wage for that hour, the money stops when you stop working. Then you pay high taxes on the little you earned and you get even less. This is called active income because you only earn while you are actively working every moment. Instead, passive income provides you income while you invest little to no time working. You don’t need to be in a hurry to make a lot of money at once. You want to take the time to build your business right so you can bring in steady passive income over time. While money is very important, it isn’t everything. You cannot buy knowledge or health. You can spend money to help you gain knowledge and improve your health, but there is no amount of money that will guarantee that you will have a high quality of life. Your TIME is even more valuable than money itself. You can use your time to learn more, to exercise, to eat better, to spend time with family or friends and more. That time spent will bring you true quality of life. If you can earn passive income, you can make money while you enjoy the rest of your time doing those important things in life!
The key point here is that if you want to generate revenue, you have to be patient and start learning day by day, just like you did in school. Most schools don’t teach enough about business ownership and finance. When we graduate, many of us don’t have experience in finance and we have no clear understanding about passive income. That is a big problem for many students. Students graduate at approximately the same age and level of education and have to compete in the job market. Most do not even think of starting a business or trying to earn passive income. Even a student who has heard the reasons to earn passive income, they have no idea how to do it. In actuality it’s very simple. Generating passive income is just like selling an item or creating something that sells, but selling something that can produce passive income is even better. If you start a business selling physical products, you make money when you sell one item, but you have to keep on doing it. When you sell a product or service that can be resold repeatedly, you can do very little or no work at all and still bring in funds. Past that there are many factors involved in running a business, but they are skills that can be learned.
To give another example of creating something that generates income, think about writing a small book. If you have knowledge about something you can write a short book on it and that knowledge is something that other people need. You have spent time to write the book and polish it, but now you don’t just sell it once, you can sell it over and over again online. People from all over the world may buy it and if you do this effectively, you can get income forever. You need to write something that you know about and write a book of reasonable quality so that you have a product people will want to buy.
#1: Write something and sell / Sell your experiences:
To elaborate on this idea, everything that you know about has value. If you talk to your friends and family, do they tell you that your experiences are worth selling and that doing so can change your life? The answer is NO. You might have hobbies or a profession that other people want to be able to do.
It is true, though. You can take your experiences and write them down in a text document. Use online tools to make corrections on your spelling and grammar. You have now become an instant teacher and are ready to try selling your knowledge to others! People want to buy quality information that is helpful for their lives. Don’t be shy about it, you have nothing to lose. Turn your knowledge into an e-book or a .pdf file or even make printed copies of your book. You can sell it online or offline, but if you are successful you can sell the same book many times. Once you write something original it is your property for life and you can sell it for life! There are people out there who want to buy what you write. Keep trying and do not look back, don’t listen to those who tell you it cannot be done because it CAN. Take that step and be confident!
In a regular job you sell your time, but when you write you are ready to sell your experience. This is how you can begin generating passive income. Your biggest asset is your experience and if you sell it in written format you own the rights (also called copyrights) and you can sell it as long as there are people to buy it! You can write more books as well if you have experience about other things. As you go through life you will gain experience and automatically have more things to write about. Your income can grow exponentially.
#2.Doing the thing you love:
You can do something you really love to do, and spend up-front time to shape it to generate cash flow, and in time it will be your passive income. Get a piece of paper or sit down at your computer and write down a list of things you are passionate about. What do you love? Perhaps you love sports, cooking, playing video games or anything else at all! You can write a book for others on how to do the things that you love and they will feel your passion when they read it.
Important points to understand about passive income:
There are a few important points you should consider:
*Don't do anything only for money. If there is no value and quality of services for the customer, in the long run it won’t work. Doing something only for the money can set you off in the wrong direction when you need to set your goals on producing quality.
*You do have to put in a reasonable amount of time at first. Later you will be able to generate the income while doing little to no work, but to start your business you will spend time creating your product or service. As I mentioned before, you don’t get rich overnight. Passive income is an alternative cash flow, especially in the beginning. Each time you want to start with a new form of passive income generation, you will put in more time at the start.
*Never think once your passive income is running it will generate without any attention at all. You have to be sure to look after your business and manage it properly.
*You must find a particular audience or market. If you try to sell something that no one is interested in it won’t work. If you try to sell something to the wrong audience you will wonder why it fails.
*You can find out what customers need and understand their ratings, reviews and opinions. If your customers give you negative feedback, don’t get discouraged. Learn from the feedback so you can do better.
*If there are other people selling the same general thing you are selling, that is not a problem. Good competition helps you improve your services and there are customers for everyone if the product is high quality.
*You should have your own marketing platform.
*Some information and services you should provide for free at the beginning to draw in customers.
*Learn what customers need the most and product a product that is in demand.
*You must not consider profit, your core goal must be to serve your audience.
Business is nothing but a value that you will create. Your customer will trust your quality of goods or services. You will need to learn the basics of marketing, client satisfaction, and paying taxes.
What you can sell or do as a business:
In some developing countries you can sell food on the street if you make sure your food is hygienic and of good quality. You can also participate in small farming and sell in the local or surrounding markets. The textile business is also a place to start.In almost any country you can sell digital products. You will need to have a good understanding of the type of digital product you want to sell.
There are many types of businesses you can do in developing countries whether you sell a service like laser cutting, a physical product like textiles, or digital products.
Any area has a competitive market today. Most people start to search for a job just after they finish school. The great news is that with some jobs you can have a regular job and resell your skills in other ways. Physicians and teachers, for example, can work in their jobs in society but also work as independent consultants in their fields of expertise. Government infrastructure makes it more difficult to work as an independent professional in some institutions and organizations.
There have been many changes in the world in the past decades. For example, recently many people have become interested in Bitcoin or other cryptocurrency. Some people understand it, but many do not. In some cases cryptocurrency (digital currency) can be useful, so it’s important to stay on top of changes. Learn about all the new technologies and use them to your advantage.It’s not important to change the way you live in a major way, but passive income can make it possible. You can live a very conventional life or you can change your life. As an employee working for a boss it is very difficult to change your life dramatically.
You can build a dynamic career instead of searching for the perfect job. I built this website to provide a standard guide. You shouldn’t think I am very rich or doing big business, in the long run I failed at my goal in making a career, but I feel confidence in my heart about overcoming and building a new business. I can dig deep and use my experience and passion to earn passive income which will provide more financial freedom and time to relax. At one time I built wonderful passive income but some of my business attempts ultimately failed because I trusted people too much. You have to guard yourself. Now I am in shape to get back to my previous state in life.
Here are some factors to keep in mind for your business:
*If you want someone as your partner or plan to work with someone else, make a written agreement, this is is a must.
*If your business is new, ask all your partners to pay their share of business spending. Do not pay all the capital yourself if the business is shared.
*Do not trust people that you don’t know. It’s best to go into business with people you’ve known at least 10 years before entering into a serious business partnership.
More Information based on what I’ve learned:
You need to do market research about what you want to do and what goods or services you want to sell. You want to start out selling something that other people really want. Create a basic written business plan and list your goals and the responsibilities that must be taken care of. If you work with others, distribute your plan to them. If you are on your own, be sure to check back on your plan and make sure you are sticking to your milestones in a timely manner.Meet with any business partners at least twice a week and make sure you discuss any issues. Find a good tax consultant if your business is growing. You want to avoid making tax mistakes or paying unnecessary advance taxes. Plan what you intend to sell. My advice is to sell your knowledge, experience, a product or a service. All of these are good.
Some broad ideas on what you can sell:
Here are some ideas for you if you still aren’t sure what to sell:
Sell products online
Sell other people’s products
Online training courses
Manage an online store
Make a YouTube channel
Invest in real estate
Build websites that generate cash flow
Sell your skills online
Open or start a local business
You may be starting to think of more ideas. Once you start, you will probably get many different types of ideas to generate passive income. It is better to stick to what you know best or what you are an expert in. Passive income will provide you revenue while you will not work, so it’s a well-developed system that you have to build from the beginning to get a good outcome or result. Your interest, hard work and proper management will help you at the end of the day.
Here I will focus on your skill set and what you can sell as written format or as a service as teaching/ online teaching or offline.
How to sell:
To sell something as product or services there are different types of strategies. You can sell going by your own plan, by understanding market demand or going by what people need. Any of your products you can sell in any online market place. For example, Amazon and Ebay are big marketplaces to sell your online product. Increase your experiences about your product and other relevant factors.
Where to sell:
To find specific places or audiences or customers is also an important factor to achieve successful sales. You also should keep in mind without some research or knowledge it won’t be easy to sell your products, services or your experiences. In reality people don’t need every single thing. They won’t buy what they don’t want or need. You should have a proper explanation about your skillset, why it’s important and how it could have a positive outcome for others.
List of places where you may sell:
Online market place: An online market place is any website used to sell you can use or build own website to sell.
Shops in local market: Any local market shops are good places to sell.
On the street: Seasonal street markets are also good places to sell.
Some Business that generate passive income:
Digital product sales:
E-books, music, video, and photography can all be good sources of passive income!
Real life products which are always in demand:
Beside your regular activities you may try to start a home-based poultry business, especially egg and chicken production. Most people eat eggs and chicken (poultry is healthy) and it takes only 21 days to get chick from egg to baby chick. Once you have a little experience you can start a small commercial poultry farm which is always in demand everywhere. To start up a small poultry business does not take much starter capital (money). You can try buy or collect some chicken from local market or buy one hen and a fertile egg. In 21 days the egg will provide a chick ( baby chicken). Within a few weeks (6-8) you can sell these chickens to get some small money to buy more eggs and produce more chicks. By rotation you can have some good capital to start up small scale poultry farming. Hens also lay eggs in a short time and some hens lay eggs for 6 months. So if you have 10 chickens you may 6-10 eggs per day which you also can sell in the neighborhood or local market. Please note that you should also know something about poultry diseases and vaccines if you have small scale continuous production.
Tomatoes are one of the healthiest foods for all of us. They are easy to cultivate in your home or on a small scale. You can start up tomato farming in a very small space instead of potato farming which requires more space! Tomatoes are used for many purposes including sauces. For any agriculture farming you will need some good or basic knowledge about cultivation, seasons, insects, diseases, harvesting, storage, marketing and price. Before you start up any farming, please understand the land requirements and any other relevant factors. Local agricultural authorities can provide standard guide lines for farming in any country.
Textiles are one of the most profitable businesses anywhere. Small scale shops and re-selling start-ups may be good. You can also make designs and manufacture clothing and start up a small scale business. Roughly 3-900% profits can come from textile business, but mismanagement can lead to losses. An advantage of textiles is that they are dry items and if you can’t sell them you can store them for a long time to sell when the time is right. Baby clothing is always in demand. Babies grow fast and their size needs change, so that creates demand. Just remember again, do not try to be rich in a day by thinking that the textile business is big and most textile business people are rich. You would have to have proper management and lots of time to have a stable business, so starting out it will be a small income.
If you can register as an Uber driver where you live, you can generate income this way. If Uber is not available you might look into similar personal taxi-style services.
*You can provide consultancy services based on your expertise in any field if you want to have some extra income. Some factors you should consider:
*You are going to meet different types of people and you will deliver knowledge.
*Are you charging enough? You are selling yourself and you are not your own boss.
*You will face disappointments, so you must be prepared for that.
Online Courses to Share Your Expertise:
To sell your knowledge is key in a world of growing entrepreneurs. We need to be able to do it all, and online education is growing and expanding every day with new students waiting to learn what you know. Teach them and earn money while doing it through an online course.
Software or online applications:
You can also build small software or online apps or website design if you know computer programming or if you know how to use basic web based tools to build web applications. Software is a huge world. Application and database development are primary. For simple work you may choose website design or small web based applications to build for business.
Renting spaces, room, house:
You can rent your property with proper management. You can collect revenue, but real estate is costly to start up. If you understand mortgages and loans it can help you to start up with a bank loan and avoid some taxes. You will need a fair amount of experience to work in this area unless you are just renting a room in your home or something on a very small scale.
Based on your activities you have to find out better strategies to sell but remember quality is must in any business. Delivery time must be accurate and you need to provide customer support to have good relationships with customers.
Understanding costing and taxation:
In any activities estimating costs is important and taxation plays a key role to run your business properly. This is true whether you are generating passive income or selling products or services in real-time. You must learn operating cost and taxes (like Value Added Tax or VAT, Income tax, Solidity tax, Business and Corporate tax, etc.) You will probably need a tax professional to help you if your business grows much at all.
Make a list of costs you have to consider before you start up any business for passive income: Business operating cost include all kinds of business-running costs monthly or yearly. Your income: cost= profit / loss. You have to add tax consultant fees yearly or monthly. Some counties have advance tax systems, some countries have tax benefits for startup businesses. Check with your local authority if you have to pay advance taxes. If you have to pay advance taxes please generate more cost for first 3 years, and these cost must be relevant to running and developing your business. You also need to have good knowledge about business line credit (a loan from bank based on business income or business) which may help you to reduce taxes for short time!
Understanding market / customer demand:
It’s very important and a vital part of business to understand customer demand or market before introducing anything new or even conventional products or services. You should offer products based on demand and timing.
Types of professional life:
1. Employee: Pays higher taxes. There is no change of life besides paying high tax and spending little time living life.
2. Freelancer: Has freedom of time to work but is not secure.
3. Business person: Hires great people to work for them.
4. Investor: Are smart and earn money by investing: many factors are involved to be an investor. However, everybody is investor in some ways, either you are investing time to earn or investing assets to grow passive income.