Passive Income is income you don’t have to work for. It comes in day after day, month after month.
It’s the type of income that allows you to live the 4-Hour Work Week lifestyle (see Tim Ferriss).
Making passive income is not about getting rich quick, or easy. You will have to work for it! But the ROI can be VERY high if you want.
Here’s an example. I sell a couple of books on Amazon.com (both hardcovers and kindle books). When I write a book I have to put in a couple of weeks of work, there are no shortcuts here. Then, once I publish it (using createspace.com, so without a real publisher or people who give me a hard time), I start to earn royalties for every booksale. Since I have a lot of books, I earn quite a lot every day, and I don’t have to work for it anymore.
Another example is real estate. I made sure not to spend my hard earned money on Porsche’s and other fancy things at first. I wanted to convert my income into passive income, and buy a Porsche with that income, that’s a different thing. So, at a fairly young age (29) I bought my first rental appartment that brings me in a positive cash flow of around $500 per month. This is another great example of passive income. The building is managed, so when something breaks I they fix it and I only have to pay the bill.
My money is working for me in that case. I have a profession (author, coach, …) and my money has a profession as well (growing and creating more money for me).
This is why I love passive income.
Other income is great as well, but when you stop working because you want to travel for instance, there won’t be any extra cash pooring in. With passive income however, you’ll keep earning money whether you stay in bed all day or not.
Are you becoming a fan of passive income?