To achieve financial freedom, passive income seems to be an integral piece of the puzzle.
Can you really lie on the beach and live off passive income?
Let’s explore some myths around passive income, and how we can work towards building passive income streams to have a happy and healthy retirement.
This article was submitted by a Guest Contributor. The opinions expressed in this publication are those of the Guest Contributor.
1. The “best” way to build passive income?
A common myth around passive income is that there is a “right” or “best” way to do it.
There is certainly no best way to do it.
There are many ways of building passive income – and, you can (and should) have multiple sources of passive income.
Leveraging on your own strengths and resources, find the best ways to create multiple sources of passive income.
Some examples include:
- online business
- e-book sales
- rental income
- crowd funded real estate
- dividend income
- p2p lending
You don’t need to stick to just 1 strategy, find what works for you, and keep going!
2. Passive income is not passive?
Even in its purest form – for instance, you just buy 1 blue-chip stock and hold it for dividends – passive income is rarely passive.
You need to revise and recalibrate from time to time.
Depending on your strategy, this can range from minimal efforts e.g. half-yearly rebalancing (e.g. blue chip REIT portfolio), to a whole lot of effort (e.g. constant changes with online business).
The goal of passive income is to put in upfront work – and enjoy the fruits of your labour later.
This means you should choose the model of passive income wisely.
Choose the type of passive income strategy based on your strengths and resources.
Choose the type of passive income strategy based on your strengths and resources.
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3. Convert earned income, into passive income
Channel your salary, into areas where you can make passive income.
Convert earned income, into passive income.
For instance, live far below your means to save up for a rental property.
Invest in your own future.
This is how you can have a multiplier effect on your income.
Over time, something small can build to something big.
Even an extra $50/month, can snowball such that you can reach your retirement goals faster!
Passive income requires hard work, but it’s definitely worth it!
Holy fucking shit. Why do I keep seeing R.Kiyosaki mentioned here. He is a known fraudster and his company just declared bankruptcy. The next article who mentions him I will complete ignore as unreliable.