What is Passive Income?
Passive income is also known as "Residual Income" or "Ongoing Income".
In very simple terms it is the income that you regularly earn without having to put any efforts and also does not require your physical presence.
These are some examples of passive income that you can earn,
1. Regular income from a business that needs limited or no involvement; A direct selling or network marketing or multi level marketing business might be a good cost effective way to start owning a business as it does not need huge investments to start like traditional businesses. Starting a traditional business can be quite risky as they usually need huge sums of money and time to start producing profits. Most don't survive the initial years. Click here to learn more about starting up a brand new direct selling business and learn the skills required to successfully build it to the level where it starts paying you passive income for the rest of your life and your generations to come.
2. Rent from property you own, the property of course should be loan free;
3. Royalties from publishing a book or from licensing a patent or other form of intellectual property;
4. Income from internet advertisements on websites you might own;
5. Dividend and interest income from owning securities, such as stocks/shares and bonds;
Why would you need a source of Passive Income?
Life is uncertain and depending on a single source of income, like a job, might not be such a good idea. Moreover, if you are the only bread winner in the house and anything goes wrong because of which the income stops then that would not be a good situation to be in.
Having more than one source of income does a whole lot of good to your financial stability. Check out our Financial Survival Calculator to calculate how much time you and your family can survive financially if your current household income stops today. Click here to check your score.
Having a source of ongoing passive income can make your life a lot easier and help you to fulfill your dreams rather than remaining stuck in the cycle of 40 hours a week for 40 years of your life.
What can Passive Income do for you?
Having a source of passive income means you are completely time independant. You would no longer need to put in your precious time to earn money. Instead, you can utilize your time to what you like to do rather than having to do what others want you to do.
You can come out of the "Cycle of Zero". In the traditional way of earning money like a job the flow in income is completely dependant on the individual. Once the person retires the income stops completely. The next generation would have to start at the same place where their parents started i.e. "Zero" A passive income source can help your next generation begin where you have left rather than start from zero.
By setting up a source of passive income you can leave behind a legacy for your next generation.