I guess not many of you will be a total stranger of what passive income is, and you may have seen or heard it from book, seminar, CD, DVD, shows, blogs, etc…that you need passive income to financial freedom. However, how did you define passive income? Does it mean getting money to your pocket 100% passive without you doing any work? According to Wikipedia, the definition of passive income is shown below:
Passive income is an income received on a regular basis, with little effort required to maintain it!
Do you agree? I don’t know about you but I certainly agree on the definition of passive income, especially “the part with little effort required to maintain“. Earning passive income does not mean you will get money to your bank account consistently without putting any work. The best thing about passive income is it is a leveraged income, which only required you to maintain with little effort.
Passive Income – How Much Effort Do You Put In To Maintain?
There is no free lunch in the world. Even if there is (such as in some temple), you will still need to travel to be there to have the lunch. Similarly, various kinds of passive income instruments will require effort to different extent to maintain. Ultimately, it is up to you to decide if you love what you are doing.
Stocks / Forex Investment
I know some people do long term investment regularly with stocks or even forex while they are getting a paycheck every month. After 10-20 years, they have increased their net worth by many times via dividend, bonus share and capital appreciation. Some of them receive 6 figure income yearly from dividend only.
You might be wondering that’s excellent and stock / forex investing might be the best passive income that you should pursue. Having said that, they have also done their due diligence before they invest in the market. They researched the stocks, did technical analysis, monitor the market trend, etc…These are the effort they put in in order to get the passive income they are after.
Some people use property investment as a vehicle for their passive income sources. While they need to fork out a huge chunk of down payment, rental yield and / or capital appreciation of the property is the passive income generated. What did they do to achieve that? They will need to do their research before buying the property, which takes a lot of time and effort. They also need to put in effort to collect the rent and maintain the property to sustain the passive income source.
Royalty from Book
Some of the best selling authors are making their massive passive income from their books selling in the book shops. Before they become best selling authors, they have spent a great deal of time and effort to publish and market their books before the passive income kicks in.
Franchise business is another red hot passive income instruments that some people would love to pursue if they have enough capital. The recipe and the business models are provided and all you need to do is to get enough right people to run the business for you.
There are different types of business models in the internet business industry. Some might take longer and need greater effort than the others. Similarly, the passive income generated from each business model varies as well.
Traditional Offline Business
No matter who you are, there is always successful example of running a brick and mortal business, regardless of your education levels. The greatest assets of a traditional offline business is either the products/ service and the people. Without the right people, the bosses will never get passive income and they will still need to do most of the thing themselves.
There are literally a few dozens passive income instruments and opportunities that can generate passive income for you to different levels. Some might require more capital outlays and effort than others. So you might wonder why so many people fail in business or investment?
In order to generate passive income, we will need to pick at least one instrument to help us. There are 3 phases to the road of success with the chosen instrument to generate passive income:
Before we delve into that, we need the knowledge and acquire the skill first. Without the proper skill, getting involved in some passive income instruments might be risky because you need to know what you are doing and the risk so that you can deal with it. There are different ways to pick up the skill, i.e. from offline seminar, online courses, books, etc…
In this phase, some people already quit or still on the fence to source for the “best” course. Only the people who completed phase 1 will get to next phase.
After you have acquired the skillset, you will need to practise in order to master the skill. Do not expect that you can generate tremendous passive income with the skillset you just learnt. It takes time to practise and master a skillset. There might be a steep learning and practising period of 6 months to a year until you start to master your skillset.
This is the phase where a lot of people quit because you really need to be determined, patient and persistent to practise to master a skillset. If you can endure and move on to the next phase, that is where you will see some success.
You know the proper way to implement your skillset to earn passive income for you. The more you do, the better you are doing and the more passive income you can generate. You will be able to optimize whatever you are doing and improve the efficiency.
Unfortunately, not many people reach this phase because they simply quit in Phase 1 and Phase 2. That’s why we see a lot of failure in every business.
Generate passive income require you to master the right skillset and mindset, no matter what passive income instrument you choose. Leave me a comment below and let me know what you think about passive income and ways to generate passive income.