Why Passive Income Is Important To Your Financial Future and Freedom.
Creating passive income is a great way to help secure your financial future. That’s why passive income is important.
After all, working diligently and consistently at the same job for decades isn’t an easy feat.
You will likely tire of your daily grind sooner rather than later if you don’t find a way to make your work more rewarding.
That’s where passive income comes into play. If you have ever heard the saying work has to be the love of your life and not just a love of your life, you understand exactly what we mean by that.
Just living and saving from a regular salary can make becoming financially independent or making work optional a much trickier thing to achieve. the reason for this is that it’s difficult to save enough off a 9-5.
Passive income is essential to making sure that you have enough money coming in from different sources so that when you do leave your job, you won’t have to worry about having enough money to live on until the end of your days.
Read on to learn more about why passive income is so important and how you can get started today!
What is Passive Income?
Passive income is different from your regular income because you don’t have to actively be involved in the process to make money on an ongoing basis like a job where you have to turn up to get paid.
When you work a regular job, you earn money based on the amount of time you spend working and the level of skill you possess.
If you work in sales, for example, you earn a commission when you close a sale.
If you’re an hourly worker, you earn a certain amount of money per hour no matter what.
With passive income, you’re not really doing any or much work, but you are earning money from your past work or the work of others.
That’s why it’s called passive income.
This can come from a variety of different sources. It could be something as simple as making money off of advertising on your blog, or it could be something as complex as taking equity in a real estate investment to help fund the project.
Why is Passive Income Important?
Passive income is the cornerstone of financial independence.
When you earn income passively, you free up your time so you can do what you love, whether that be spending more time with your family, traveling the world, or sitting on the beach sipping a pina colada.
But passive income isn’t just about finding a way to earn more time for yourself; it’s also about securing your financial future.
If you’re like most people, you’ve probably heard that retirement is becoming increasingly difficult to achieve. That’s because the cost of living is increasing, people are living longer, and there are fewer people paying into the system compared to those receiving benefits from the system.
How to Start Creating Passive Income
If you want to start creating passive income, the best thing to do is to make a list of all the things you’re currently spending money on.
You might be surprised by how much you’re spending on things that you don’t really need. So, once you’ve made a list of all the things you spend your money on, the next step is to identify whether those things could be a source of passive income.
For example, let’s say that you spend $100 each month on takeout.
You could turn that $100 per month into $1,200 per year if you turn that into a side business where you start a delivery service.
Are you really good at spreadsheets, drawing or junk modeling?
Could you start making youtube videos or an online course on how to design your own amazing spreadsheets that people might pay for?
What do you watch on Youtube that you could do better at?
5 Sources of Passive Income
Rental properties – If you own rental properties and they’re cash-flowing, you’re earning passive income. This can either be someone renting a room in your house or you rent out a property that you own.
Affiliate marketing – Affiliate marketing is a great way to earn passive income through blogging or vlogging promoting and earning a commission off products you talk to use and talk about. You can create your own product and sell it or sell other people’s products through affiliate marketing.
Online publishing – You can earn passive income by blogging. The amount of money you make will depend on how much traffic your website gets. You can also earn money by offering paid courses.
Self-publishing – Kindle publishing is one of the best ways to earn passive income by creating a piece of original content and offering it for sale. If you have an interest, specific knowledge, or skill could you write about it to help others reach their goals?
Investing in the stock market – investing in the great companies of the world through low cost globally diversified investments is another way to earn money and create wealth. You will need to educate yourself on the ups and downs of the stock market and understand this is a get-rich-slowly process.
But investing in the stock market is often seen as the ultimate passive income.
3 Tips to Help You Create Passive Income Now
– Start small – You don’t have to start by taking on something that will earn you millions; you can start small with something that only earns you a couple of hundred dollars each month. You can use that money to reinvest in your passive income stream to grow it, which will in turn grow your passive income even more.
– Be consistent – You can’t expect passive income to start flowing in after a couple of days or even a couple of weeks. You have to be consistent and keep at it until it starts to grow. This can take anywhere from a few months to a few years, depending on the source of passive income you’re trying to create.
– Invest – Once your passive income starts growing, you have to reinvest that money back into the source of your passive income to grow it even more. For example, if you’re renting out a room in your house, you need to make sure that the room is always clean and prepared for the guest, so you have to put money into that room to keep it up to par.
FAQ: Why passive income is important
Can you live on passive income?
Yes, you can live off passive income but it may take time to build up the momentum you need to earn enough to live off. That’s why you should start working on it now.
YOU can use your salary to start making a passive income through investing in the stock market and then start using your skills and experience to create additional sources of income.
With time, trial, and error you can replace your active income with passive income.
Earned income vs passive income whats the difference?
The difference between passive income and earned income is the amount of ongoing work that is needed.
In active income, you need to turn up to earn money. If you don’t turn up for work sooner than later you will stop earning money.
With passive income, you create it once, and with minimal ongoing work keep earning money from what you have created.
Is passive income worth it?
Yes, passive income is worth it.
One day sooner or later you will want to stop or change what you are doing.
One day you will probably also want to make all work optional.
You can only do this if you have other sources of income to live off.
Freedom is the reason passive income is worth it.
What are the passive income pros and cons?
If there are any passive income disadvantages its that it can take a lot of time and effort to make it happen.
However, time is going to pass anyway so why not use your skills and knowledge to learn something new and create new sources of income for yourself and family?
One day freeing you from the 9-5 lifestyle.
Why passive income is better than earned income
Passive income is better than earned income because you earn it when you are not even there!
You are earning money while you are somewhere else living your best life.
Or you can earn money 9-5 for 30-40 years.
Whats passive income?
It’s income you receive for doing the work once but getting paid again and again.
It’s income you can earn when you’re not there or even in your sleep.
You create a product or service and sell it again and again without needing to do the work again.
It’s the opposite of active income where you have to run up every day to earn the money.
The most common passive income sources are rental properties, stocks and shares, and businesses where you sell a product or service. All these things can earn you money in your sleep.
A blog, Youtube channel or app could be created once but earn income over and over again.
Conclusion: Why passive income is important
Creating additional income sources, especially those that are more or less passive is a great way to help secure your financial future.
Removing the need for you to be at a specific place at a specific time to earn money will free up so much of your time. The one resource you cant renew.
Creating more time and location freedom is the reason why passive income is important for you to start building right now.
Creating your own GAME PlanIf you would like to find out more about making a life and financial plan, figuring out how to reach your favourite future and creating the assets and income you need to pay for this get in touch below or set up a call with us.