Before we go any further,
let’s talk about the difference between active income and passive income.
This distinction will be paramount to your ability to produce serious capital
on the web. So what is PASSIVE INCOME? Passive income, if
you don’t already know, is income that’s earned automatically. It doesn’t
require much maintenance once that income stream has been created. However, it
does require an enormous amount of effort at the outset to establish that
stream of income.
Active income requires your
time and you can only produce as much money as your time allows. For example, a
DOCTOR or a CHARTERED ACCOUNTANT or a LAWYER or PROFESSIONAL ENGINEER who charge
high per-hour or per-consultation fees and make exorbitant amounts of cash are
stifled by the amount of time they have in a day. We all have the same 24
hours. Not one person on this earth gets more time than the next. It’s the
greatest equalizer in life. Truly God is impartial in that point to everybody. When
the time you work directly correlates to your income, it’s called active
income.
Understanding Active Income
With active income, you’re
actively working to produce those wages. So if you work for someone else as
employee or you’re earning a per-hourly fee as professional / consultant or you
have clients and you’re working for yourself, you’re still engaged in making active-income.
However, if something were to happen to your ability to work, for example, you
would be unable to produce an income. This could be anything from an
injury to an illness or disease, and everything in between, when you can’t
work, you can’t earn.
Still, much of the world is
engaged in active-income work. They work
so that they can earn. When they don’t work, they don’t earn. Yet, there’s
almost zero chance that you’ll get rich or make any significant amount of money
when you’re solely reliant on active income. Now, don’t get me wrong. It’s possible. People do it by slowly saving
and investing over the course of 30 or 40 years, but we’re not talking about
that here.
If you seriously want to make
money online, you need PASSIVE INCOME.
You need your income to come automatically, so that you can use the precious
little time you have to produce more streams of income that will pay you on
autopilot. That’s the holy grail of income-producing activities. Now, it’s not
easy to do, so I’m not going to sit here and try to insult your intelligence.
It takes an enormous amount of effort and very little financial gains at the
outset.
Over time, however, nothing
beats passive income. No matter what sacrifices you have to make, if you focus
on passive income, your future money-making self will thank you for it.
So, what are some examples of
passive income?
1.
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Real estate rentals – Clearly this takes some capital to
setup. It’s not easy by any means. But it is passive income. Real estate
rental brings you automatic income on a monthly basis. It does require some
maintenance, for example if a problem arises and repairs are required. But
it’s still considered passive income.
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2.
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Dividends from stocks – Dividends are a great source of passive
income revenues because they pay you on a periodic basis. While you do need
to own a substantial amount of shares for there to be a noticeable income, if
you have money laying around, this is a great way to invest it.
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3.
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Blog, YouTube or website ads (i.e. Google AdSense) – Clearly, this requires much less
of an investment of capital upfront, but it does require a significant amount
of skill and time to build both age and authority. However, this will only
really provide substantial income when you’ve reached tens of thousands of
visitors or views per day.
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4.
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Book and audio book sales (i.e. Kindle and ACX) – This source of passive income offers
you the opportunity to make money online far quicker than launching a blog
and earning money off of advertisements or affiliate sales. However, it
does require skill and knowledge or a tremendous acclivity of research and
effort.
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5.
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Automated drip-campaigns through email marketing – Email marketing is something that also
requires a great deal of time to produce an income from. You first need to
build and establish authority, then get thousands of people to sign up to
your email list, and only then can you market and begin earning an income. Think
in terms of years here.
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6.
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ATMs and vending machines – This requires a bit of upfront
investment and sales skills. You need to buy the machines and then make
contracts to place those machines in a variety of destinations based on
volume of traffic. Still, you can get up and running relatively quickly with
this passive income stream.
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7.
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Selling
Digital Products Online -
Selling
digital products online is a great way to make Passive Income. You can sell
e-books, courses, prints, or audio files. The internet has democratized
education. Someone out there is looking to learn a skill that you
specifically can teach. Think about what your skills and interests are. Can
you package some of those things into a book and sell it for $15 online?
Say
you're a woodworker who has been creating original pieces for 10 years. You
could write a step-by-step guide on how to source wood, use the tools you
love the most and where to find them, and common wood restoration practices
that new woodworkers should know. Putting this all together takes time
upfront, but then you can sell it online forever.
To
earn $10,000, an e-book at $15 each would need to sell 667 copies. If you
turned it into a visual and audio course and sold it for $150, you would need
to sell just 67 copies to earn $10,000. Since you can reach far and wide with
the internet, selling products online is a popular passive income idea.
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8.
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Accrue Dividend Payments
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