Passive income is one of the best type of income everyone dreams of. This basically can give you freedom and opportunity to earn money while enjoying life.
In today’s world, it is easy to build passive income generating businesses through the help of technology. You can do all the work upfront and leave it running so you can focus on other things that you love. As what my idol Pat Flynn says, “it’s all about working hard now so you can reap and enjoy the benefits later“.
On this article, we will talk about passive income and how it can help us be financially free.
What is passive income?
Before we continue, let me share you my definition of passive income. For me, passive income is a regular income earned from a passive income generating business or investment without costing you time and effort after doing all the work upfront or at the beginning.
It means that you have to work on it upfront or at the beginning and enjoy the benefits later on. This doesn’t mean that you can earn money without doing anything like many of us thought, I’m telling you that’s a big lie. Or it might be a scam.
You have to work and put full effort on it before you can have a passive income generating businesses or investments. But as mentioned, all work are done at the beginning and just a little maintenance or attention needs later on.
Some types of passive income businesses need some little maintenance while it’s running but there are others which are fully automated.
Why passive income is better than active income?
Active income is an income earned when you directly participating on the work and being paid on the amount of hours or type of work being done. This means that without you exerting time and effort on the task, business or investment you will not earn. No work no pay as the quote says.
As mentioned, passive income can give you regular income “virtually” without doing anything if setup correctly. This can really save you time and effort and let you focus on other things that you love.
This is one of the main reason why people today are eager to start and build passive income generating businesses. You can have the “freedom” if you’re able to passive income generating business and investments.
On the other hand, passive income takes time to build. And of course it’s not for everyone. Other people are satisfied and contented with their active income and are not interested in creating passive income businesses. We cannot force them.
Additionally, you need to have an active income to pay your bills and bring foods on the table. That’s why it is important that you have an active income while you are building or setting up your passive income generating businesses or investments. As mentioned it takes time.
10 Sample of passive income generating businesses or investments
Here are the common samples of passive income generating businesses or investment you may be interested.
- Savings account and time deposits (earn from interest)
- Real estate (Apartment rentals)
- Investing in stocks and other equity (earn through dividends and price appreciation)
- Selling ebook (Digital version of book)
- Selling an online course (Video or presentation)
- Build an ecommerce store (Process and payment can be automated)
- Creating or building an app (Application for smartphones/tablet)
- Vending machines (Coffee, drinks and even computer rentals)
- Blogging (advertisement, affiliate, your own product). Read my blogging tutorial here.
- Royalties (Books, songs and other products)
These are just some of the common sample of passive income generating businesses or hobby that you can start today to earn passive income. As mentioned, you need to put full effort upfront and make a sweat to make it work.
No easy money! Once it was setup and running, you can now enjoy the freedom and the passive income earnings it can generate. It’s not impossible, many people are earning passive income from all of the sample mentioned above. Including me. Start one today!
I hope this short article provided you some ideas about the basic understanding of passive income and the reasons why you might need to build one. You can use you free time and start building any of these passive income ideas mentioned while working on your full time job.
It’s not difficult, you just need to put some effort to learn and practice and time will come you can have your passive income businesses or investments.
On the future articles, I will share more about passive income and full details how we can build these passive income generating businesses. Stick around!