Change Your Financial Future with Passive Income
The world economy is constantly changing, and many of us are doing everything we can to keep up. Of course, the main factor that’s fueling this economic evolution is the internet. Not only is it creating new marketplaces on a daily basis, but it allows people from all industries and all backgrounds to innovate and earn money in lots of different ways.
But perhaps the biggest game-changer the internet has brought to the world is allowing people like you and me to earn passive income. You see, passive income is what enables you to break out of the cycle of trading your time for money. In doing so, you can make money while you sleep, while you work out, or while you’re at your other job.
If you’re the sort of person who craves true financial independence, this article is for you. In it, we’ll discuss what passive income is, how it works, and why it can change the world of personal finance for the better.
What is Passive Income?
No matter what you do for a living, it’s fair to say that the income you earn is “active income.” This is the cash or paycheck you earn in exchange for trading your time for money. After all, whether you’re a cashier at a grocery store or a brain surgeon, your salary is a direct result of the hours you put in at your job.
On the other hand, passive income is money that you earn now on things you did in the past. Maybe you wrote a book last year, but it’s still selling today. Maybe you bought stock in Tesla in 2010, and it’s been paying off ever since. Either way, when you earn money via passive income, you’re not performing any actual work in exchange for that income.
By comparing these two definitions, it shouldn’t be hard to see where passive income can give you a financial edge. After all, when it comes to making money, most of us are limited by the hours we have in a day. But passive income is unlimited because the hours you spent on the work only need to be traded once. After that, you can continue to earn off the final product.
Now, you might be saying that you can’t write a book, or that you don’t have the money to invest in high-dollar stocks. That’s OK! Most people don’t. But there are some things you can start doing right now to build passive income and start working toward financial independence. I’ll outline three of them below.
Real Estate
Real estate is one of the most intriguing industries in the world, and smart entrepreneurs make millions of dollars in passive income from it every year. From flipping to renting to wholesaling, the real estate market is always providing financial opportunities.
The most common way you can make big money in real estate is to buy a property and either renovate and sell it (flipping) or rent it. Both of these options require a lot of work and – as you might guess – will require a significant investment.
But if you lack in the personal finance department, that doesn’t mean real estate income is out of the question. You can always find other people that are flipping and renting and provide them with money as a private investor. These individuals love to borrow from people instead of banks, and will typically pay up to 12% interest on the cash you give them!
Dropshipping Clothing or Print on Demand
One of the newest passive income sources on the scene is dropshipping. This is essentially a retail method in which the store or outlet doesn’t actually keep the products it sells in stock. Say, for instance, you had a website selling widgets. You could run the website and sell the products without having a warehouse full of those widgets. Instead, when someone places an order, you contact your widget supplier and have them ship it to the customer.
One of the markets turned on its head by the dropshipping model is the clothing industry – specifically t-shirts. There are two ways to earn passive income here. One is to have the website that sells the clothing people design, and the other is to design clothing and submit it to those websites. Either way, you get a portion of each sale and never have to handle a single product.
Now, I should mention that I’ve submitted t-shirt designs to a dropshipper and only ended up making a few dollars. On the other hand, some people have made thousands off of a single shirt design. Just like anything else – you have to work hard, know your market, and sometimes get a little bit lucky.
Blogging and Affiliate Links
The internet is full of successful individuals who’ve found a particular niche and are catering to it with a blog. In fact, I have personally earned significant passive income through my blog by sponsoring the page with ads. In my opinion, Google Ads is the easiest way to do this, as you only have to sign up, and the service will automatically place relevant ads on your site. Whenever visitors click on them those ads, you get paid.
However, the real money in owning and running a blog comes from affiliate links. These are links that redirect users to specific products listed on Amazon or another shopping network. When one of your blog users clicks on an affiliate link and then buys the product, you get a cut of the sale price.
So, if you’re passionate about cooking utensils, camping equipment, or guitars, consider making a blog and writing about those products. Whether you’re doing comparisons or reviews, you can sign up as a sales affiliate and make money every time your content results in a sale. It’s a passive income dream come true!
Passive Income in 2021
By now, the potential for changing your personal financial situation with passive income should be obvious. However, I want to clarify that this is not some “get rich quick” scheme. Like any other way of earning legitimate income, you will have to work hard to see results – especially at first.
Yes, passive income is real, and your ability to make money from it is virtually limitless. Still, you’ll need a quality product or service, a good plan, and a sound strategy if you want to be successful. That said, if you’re willing to put the time in now, you could be earning great money for years, or even decades, afterward.
Some Topic References:
https://yourstory.com/2020/07/passive-income-concept-ways-benefits
https://www.daveramsey.com/blog/passive-income-real-estate
