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It's a dream we all have.
That someday, we'll find ourselves sitting at a beach, eyes closed under a wide brimmed hat, very relaxed, soaking up the experience and enjoying the yummy sea breeze....
and suddenly, shattering the silence, you'll hear a beep from your mobile phone calmly sitting on the sand.
You have a message.
You reach out to pick up your mobile phone and find a message informing you of a credit transfer into your bank account.
Smiling ear to ear, you recline back on the beach mat thinking, '
This is the life, I'm earning passive income for doing nothing'
hmm....wake up.
You've been sold a lie.
In the words of Tresidder (founder of financialmentor.com), "
Many people think that passive income is about getting something for nothing, It has a 'get rich quick' appeal ... but in the end, it still involves work. You just give the work upfront."
Early this year, when I set a goal to earn multiple streams of income, I didn't realize how much work and commitment it would require.
Now I see clearly.. :-)
Don't get me wrong. Passive income is possible and should be a goal for anyone working towards financial security. The idea of earning passive income from an activity you are not actively involved in, has significant appeal, however, you need to be ready to put in the work required to actually succeed.
Let's take a look at some ways you can earn passive income;
Information products are a great way to earn passive income, according to the internet gurus of our time.
All you need to do is a build a framework around a body of knowledge and develop some kind of information product; an online course or an e-book.
My friend,
Steph Obi, is the
Queen of online courses and she will tell you for free that it takes a massive amount of effort to create an information product. It has to be great content for it to actually make money. Good thing is if you're ready to put in the work, she'll be glad to help.
Investing in real estate is a time-proven way to earn passive income but it involves a lot more work than a lot of people expect. I've listened to quite a number of stories of people who invested in real estate only to find out they didn't estimate appropriately the costs and expenses, the return on investment and the liquidity risk of owning that particular piece of real estate.
Questions such as; the best location to purchase real estate? Will I get a tenant? How soon can I actually sell and earn a margin?, if not well analyzed could result in a dent in your plans to earn passive income.
Investing in dividend yielding stock. Our parents and grandparents swear by this as a source of passive income. It definitely is a great way to earn passive income since the income earned over time is not related to any activity other than making the initial investment.
The tricky part is picking the right stocks to invest in.
Starting an investment club. To be absolutely honest, I started an investment club with friends because I thought it would be a great way to earn passive income eventually.
I didn't realize how much work it would require to make good investment decisions.
Looking back now, I'm glad we started because I've learnt so many lessons
Circumstances change, economic situations change, our income levels change
However, those who decide to not just daydream but start putting in the work are the ones who eventually end up sitting on the beach getting credit alert messages on their mobile phones.
Your dream might be to travel the world or just be free of a 9-5 job.
You need to start putting in the work if that's going to happen.
The earlier you start, the better.