If you are looking to create financial freedom you probably know by now that working one job forever is not going to get you there. The old belief that trading time for money will make you successful is a fad and more and more people realise now that they need to create new income streams to achieve their financial goals. If you are one of those people you probably heard about passive income. What is passive income? It is, simply put, a way of creating a regular income stream without having to put regular work and time into it. In order to get to that stage though, one has to set the foundations up and oftentimes, put a lot of work or other sorts of investment into it first. Nowadays, it has become significantly easiest to create passive income streams and therefore, diversify your profit-generating portfolio. It is also safer to have multiple income streams than rely just on one, namely your main full-time job.
How to start making passive income?
There are different ways you can start creating additional passive income streams and they can be categorised into two categories: Projects that require the investment of your time. You will need to invest your time into education, research and creating a product or service that will create that passive income stream in future. Projects that require a financial investment. These projects will also require some time investment, however passive income itself will be dependent on the monetary investment itself.
Why is passive income important?
Peace of mind.
As we all learnt in the past year, it takes one man and a bat to change the course of the history and lives of billions of people. We can no longer rely on the stability of our full-time jobs and regular salaries when whole industries have been suffering. Passive income gives you peace of mind that even if one of your income streams is affected by external factors, there are other income streams you can rely on.
Passive income is a great boost to your monthly salary especially if it was cut. It gives you additional money in your account that you can save or invest.
Additional income streams allow you to be more flexible with your spending and pay off your debt if you have one.
This is the ultimate goal, the freedom to make decisions without being restricted by your finances. Well-planned passive income streams can give you an abundance of money to achieve your financial freedom.
Passive income gives you the liberty of being at a mercy of your full-time job and one employer.
Enhanced retirement plan.
In the long-term, passive income is a great way to save for that pension plan and retirement holiday home somewhere nice.
New investment opportunities.
Passive income gives you the additional injection of cash to invest in things and causes that interest you and are close to your heart.
Bear in mind that passive income takes time and energy to build up and requires, first and foremost, patience. It is not a get-rich-quick scheme and in order to see the fruits of your hardship, you need to plan it long-term.
Ready to get started? Read our article on 17 ideas to start generating passive income streams right now.