Would you like to create multiple additional streams of passive income? Imagine having additional 500 or 1000 dollars transferred to your account each month. Now that would be nice right? What if I told you that a typical millionaire has 7 sources of income in average?
I will try to explain what are your options to create additional streams of income for you and start earning that extra 500, 1000 or even more (a lot more) dollars per month.
And you can start working on this today so you will start earning as soon as possible.
Why do we need multiple streams of income?
The thing is that you never know what might change in the future and you should never have all your eggs in one basket. Even if you have a great job that makes you a ton of money and however that might seem great at this moment, you never know what time will bring you in 5 to 10 years. I saw people that had their own businesses and made a great deal of money, who went from wealthy to poor in a matter of years. I saw people who had great careers and worked really hard for it only to get burned out completely at some point. You never know what the future will bring you. It is crucial for you to protect yourself from ups and downs that are the only constant in our lives. You can create multiple streams of income to create a safety net in worst case and you will also learn some skills on the way that could potentially land you a better job. If you are able to create any kind of income for yourself you immediately become more valuable to your potential employer as you have proven that you have certain skills that can generate money and that is always a good selling point.
Your additional income streams can be active, passive or a combination of the two. I would recommend to get as close to passive income as possible but I would also say that there is no such thing as a totally passive income. There are types that are solely based on your capital, but they generate an insignificant amount of income and are therefore not lucrative enough if you don’t have millions under your belt and let’s be honest would you be reading this blog if you would have millions to invest?
You still need to have some sort of income before you can start working on your passive income. My best advice is to get a job (if you don’t have one already), here is a good article on how to pass the applicant tracking system which causes problems to many people.
Passive income streams
When I am talking about multiple income streams I’m not talking about you doing three different jobs, but rather doing things that can bring you money in a passive way. Streams of income like selling pictures on stock photo sites or creating mobile apps and earning money with each sale. The options are really endless, and it is up to you to decide where you want to invest your time to get some additional income.
Personal note – Don’t do something just for the sake of earning money. You should have at least some personal interest in the mater you are dealing with. You must understand that this is not simple and you will always have some competition. How do you expect to be better at something you hate from someone who enjoys doing it. You will fail and all the time you have spent on it will be wasted for nothing.
But let us clear up some things in the first place, if you already know what passive income is than you can skip this part, but if you still trying to get your head around this, than please read the following explanation.
What is a passive income
A passive income is an income that is not directly linked to the amount of hours you spend working or you could also say that passive income is revenue you earn even when you aren’t actively working. It is exactly the opposite of active income.
Active income on the other hand is money that stops coming in as soon as you stop working, this is usually your 9-17 job. You directly trade your time (work) for the money (your salary). The more knowledge you have, the more responsibility you have and less people know what you know to do, more money you can make per hour, but you will always be limited with the amount of hours a day has.
And please don’t understand this in the wrong way a passive income is not money dropping out of the sky it is not easy money and it is not established just by a miracle. It does require your time and money and most importantly a lot of know how.
You have to have a strategy, you must know what you are doing and you have to put in the work required.
In practice it means that you usually need a bigger initial investment of time and some money in the beginning but after that source of income is created fairly little work is required from you to maintain a consistent income. All this depends on the source of income you will be working on and some sources require less work while some require more.
Time is the only commodity you cannot buy but everyone seems to be selling his time for money
The bottom line is that most people directly trade their time in exchange for money. This is not an optimal way of earning money as even if you earn a decent amount per hour you are still limited with the amount of hours a day has so the amount of money you can earn will always be limited. The other thing is that time is the only commodity one can not buy, so trading it directly for money doesn’t seem like a good idea. Wealthy people don’t work(at least not as the average Joe does), they create value, that is the main reason how they could acquire wealth.
Different types of passive income.
You must understand that there are different types of passive income. Some types require a substantial amount of capital to generate a noticeable amount of income and some require a lot of knowledge, time and some money to start generating you an income. You should also realize that there is probably no way to generate an income that does not require at least a minimal investment of money. If you think you can create an additional stream of income investing a minimal amount of time and no money than please stop reading this article as I am not able to teach you that. Nothing is free on this world. Even if you have a regular job, and start working for a new company, you basically need some initial investment. You don’t get your first salary for more than one month and you have to cover all your costs in the meantime. You must treat creating a passive income stream in the same manner. In order to reap the benefits you must first invest something.
Be aware that this is a highly competitive space and that you will need to be on top of what you are doing the entire time, it is not just a set and forget thing.
Capital based streams of income
Real estates – a lot of people are making a lot of money with real estates, you probably heard about Donald Trump right? You can buy a house or flat in a bad shape, hire someone to bring it into a tip top state and flip it for a profit. You can become a landlord and earn money with renting the real estate. While this is a fairly safe way of creating an additional stream of income and I totally encourage everyone to create it if possible, the reality is that it requires a lot of capital and most people don’t have that amount of money to play with.
Investments – Stocks, bonds, investment funds are all investment types that can generate additional streams of income, but there are periods where this kind of investments can actually lose on value and should be treated as a long term investment, at least 10+ years which is a really bad for a recurring income stream. You also need to have some knowledge to be able to make a profit. You could also give your money to someone who has that knowledge but he will charge you some sort of management fee in return which he will collect even in the drought periods.
There are also other types of capital based incomes, such as lending money, buying a small business etc. But this types are more risky and require some knowledge and are too specific to debate them here.
Non capital based streams of income
Royalties – you can earn royalties on music, books and photos. The idea behind this is that you sell the rights to sell/use your intellectual property.
If you create a popular song and a radio station wants to play it the author gets paid royalties. Yes this is why the pop stars have so much money.
If you write a book you get a percentage from each sold copy. Some authors are millionaires, just take a look at J. K. Rowling, she is a billionaire thanks to Harry potter books.
If you take a photo and upload it to microstock site you get paid for each sale they make on your photo, and yes there are also millionaires making money selling stock photography. Please keep in mind that I am not talking about standard photographers like the ones that take photos for Time magazine or Playboy, I am talking about regular people who take pictures in their free time and upload them to microstock sites.
Selling digital ads – if you own a website with a high number of visitors you can earn a substantial amount of money just selling ads. It all comes down to what kind of traffic your site is receiving but some sites make a huge amount of money by just selling ads. The bad thing is that this is not the most efficient way of earning money from your visitors and unless you have a high amount of visitors the amount of money you will earn will neglectable.
Affiliate marketing – this one is simple, someone else has a product and gives you a predefined percentage for each sale or refferal you make. There are different types of of affiliate marketing and dough it has a bad name to it, you can earn a decent amount of money and still keep your integrity. If you avoid all the crappy affiliates and promote only the ones that actually give some value you can promote them with good faith. You should never promote something just to get the provision, you will lose trust from people that are visiting your site and this are the people who could give you your extra money income.
Consulting – while consultancy still requires you to do some work it is actually you selling your know how. The bigger the know how the higher the price tag you can put on your service. You can also put your know how into a digital form and sell that. Digitalising your know how means to create a tutorial, a video a presentation or something that people can use to acquire your know how. Best part of digitalising your know how is that you can sell it a million times without spending time on passing you knowledge.
Membership programs – if you have a lot of “digitised” knowledge to share, you can charge a membership fee for accessing your program. You can share a certain percent of your content for free so people can see that you are the real deal and will gladly pay to get the rest of the content. This is also great to create a constant stream of income as you can charge a small monthly fee which will not be a problem to pay and you will make money each month.
Sell stuff on internet – the entire economy on the planet runs on buying and selling “stuff”. I don’t need to tell you that there is basically no limit to how much you can earn here. You can create you own products that you then sell on your website or you can just sell some white label products on Ebay, there is an infinite amount of ways you can earn money by selling stuff on the internet.
Now that we covered what kind of additional streams of income you can create I will also give you my personal advice on which to choose.
My first advice would be to choose an activity that you are already familiar at or you are really passionate about, preferably both. If you try to do something that is boring to you and you know nothing about than you will be just wasting your time and won’t earn anything probably.
Like taking pictures? Buy yourself a proper DSLR camera and start uploading your pictures to microstock sites.
Are you enjoying writing about something? Start a successful blog and recommend things in which you truly believe in and earn a commission on each sale that is a direct result of your recommendation.
Have some special knowledge? Make a video and upload it to youtube or somewhere more appropriate for a video tutorial.
This are just a few examples of what you could start doing today and create multiple streams of income doing things you actually enjoy doing.
And the best thing about this is that you will learn so much in the process. This is the best way to acquire new skills and make yourself more valuable in the future. Why pay for some training if you can learn it yourself. Invest time in yourself and learn learn learn. That is the only way you will be better off tomorrow than you are today.
How far can you take this passive income idea?
There are groups of people who make a decent living just from online streams of income. There is even a new term for people who travel and earn money online, they call themselves digital nomads. This is a new way of living for people. It was impossible to have a lifestyle like that and still earn money in the process 50 years ago, but now with the rise of technology more and more people will be able to live a more flexible life and enjoy the freedom it offers.