Imagine if you could put earning money on some sort of cruise control…
You’ve probably seen no end of books, YouTube videos, podcasts, well, you name it on the topic of passive income. We’re going to explore the topic here at BSG continually. Lots of side gigs and many business pursuits involve passive income, so let’s talk about what it is and what it’s not.
Passive income, as I mentioned in my intro is sort of like putting your car on cruise control. You do the work of starting the car, driving it onto the freeway and then getting it up to freeway speed, and then you press a button, take your foot off the gas and down the freeway you go all the way to your destination.
Passive income works sort of like that. You do the work upfront and then put that work on an automated system that earns you money…well, hopefully it earns you money.
Lots of people think it’s easy and there’s no work whatsoever involved but that’s not the case. Sometimes weeks, months, and maybe even years of work go into the product before it’s put on this automatic system.
One example is (and I know this from experience) e-books. Once they’re uploaded to sites like Amazon, they do in fact become passive income for me because there’s very little if anything I have to do in order to make money on that e-book. However, lots of work went into the e-book before I reaped any reward. Research, writing, editing, covers being made, etc. Some of them have taken me weeks, some months, and yes, a few of them a year or more. I also earn passive income on the classes I have at Skillshare but that didn’t happen overnight. I had to create and record the classes first and wait for students to discover my classes.
I’m also selling digital planners on Etsy and these too are now passive income but took me months to put together.
So, what else could be considered passive income? Dividends you earn from stocks you own, interest you earn on your savings account, and rental income on property you own.
Compare passive to other times of income where you have to give up your time in exchange for money. Working for an employer is a prime example. You put in forty or more hours of work a week and they give you a paycheck. Even most business owners pay with time in exchange for money.
Is passive income really that golden egg and the cruise control of making money?
If you don’t mind (and realize) there’s lots of work to be done upfront, that you have to promote to get people to your site where your products on sale, or that you do sometimes have to monitor feedback and some customer’s questions, then yes, I’d say passive income is something we should all strive for. My goal is to get at least 75% of my income in passive form in the next five years so when I start to travel I’ll still be earning money even when I’m away from my office. It’s also a way I hope to supplement my retirement income too.
This year, think about ways you can start making some cruise control money.
Talk again soon, and remember to live the life you love.