What is Passive Income?
Most of us are familiar with the concept of swapping our personal efforts either physical or mental for money. In the West we have developed an education system around the concept that you need qualifications to get a “good job”, then once you have that good job you will work 40 or 50 or 70 hours a weeks and be rewarded for it. This working for a living gig is the norm in our society – but for those who want the road less traveled passive income is a way more attractive.
Working for a living never really “clicked” with me. I hated the lack of freedom that a “job”entailed – it prevented me from living where I wanted, travelling when I wanted and even required me to get up and get dressed in clothes I didn’t want to wear. I started looking around for options ….
The concept of passive income was hugely appealing to me (and to most other wage slaves I suspect), so I started looking around for:
Passive Income Ideas
1. Passive Income for Shares / Stocks
My first passive income streams where from the idea of investing money to make money. This was logical – as I had a well paying J.O.B (Just Over Broke) at the time. I invested in shares – but as a income producer shares in my country are a bit of a dud. Your mileage may vary – a blue-chip stock that produces an excellent dividend stream can be a great passive income idea, but it didn’t work for me.
Also as a control-freak I didn’t like that I really had no control at all about what these companies were doing with my money. And that was before 2008…
2. Passive Income From Rental Properties
For me this has worked, and continues to work well. We own several rental properties and we make passive income every month because we employ property managers to do the actual work involved with property investment, finding tenants, vetting tenants, getting tenants to pay, removing non-paying tenants, fixing stuff that breaks on the house. However unless you are doing something quite exotic in property we have found that most of your wealth is actually tied up in the capital gain of the property rather than the actual income stream – which even if they weren’t leveraged by the mortgage, would only be a few thousand dollars a year.
The “normal” passive income streams will work – but you need a huge amount of capital to get them to generate passive income at a level that will see you comfortably living the lifestyle you want.
What I needed was a passive income generator – a way to make a passive income NOW, with little investment, and without borrowing from the bank either!
I turned to the Internet and looked for ways to generate passive income. Its seemed like a pipe dream – for many people it is. That is why so many “make money online websites” exist every one wants part of the dream -the concept that you can click some buttons and sit back to and wait for the dollars to roll in.
Sorry Passive Income on the Internet Isn’t That Simple
Passive income is entirely possible – mybank account tells me that each month , but it requires a fair amount of work to set up.
Passive Income Business
Very few of my real world friends understand what I do. The more tech savvy of them will, once I tell them that I develop websites online and make money from the advertising, will assume that I have lots of clients for whom I work. I don’t. You see having clients is a bit like having multiple bosses -you are still at the mercy of other’s timetables and priorities.
I have a few clients – but they are for fun, income diversification (they pay me in my country’s currency rather than the US$ the rest of my business runs in) and for getting me out of the house from time to time.
So how do I generate passive income? Its a fairly straightforward process that involves quite a lot of work up front – just like any business, but which has almost non-existent start up and on-going costs, and, if you make it, has unlimited income potential.
In short – I develop websites which are focussed on terms that people search for on the Internet (aka keywords). I optimize the sites for those keywords, I rank the sites on the first page of Google and I make money from the advertising on those sites.
It took me several years to have any success at all doing it – so the devil is definitely in the detail. The rules of the game change from time-to-time – on Google’s whim, but then a job can disappear on a employer’s whim too can’t it?