HW left his previous company, SQ, 2 years back. He joined WBG, a MLM company 4 years ago. He took almost 2 years to generate enough income from MLM to surplus his fixed expenses before he make the big leap away from monthly stable income from SQ.
We talked a lot and covered many subjects. One of the topic discussed were about passive income and financial free.
Firstly, we needed to get our definition correct. What is Financial Free? Financial Free mean we do not need to worry any bit about our financial FOREVER! It's not just "for now" or "we can manage", but it goes beyond all these! Financial Free, to me, is I have enough passive income that cover my expenses perpetually and I could generate extra for me to use freely without worrying if it will come again tomorrow.
Now, what is Passive income? Some business owner told me he is generating passive income now as he spent his precious time talking to me because he have a team working for him and he is earning money at that moment without him in the office! Politically, he is correct. However, to me, Passive income goes beyond just not been at the office; it's the notation that one do not need to be present in their business AT ALL! Take note of my words, "AT ALL".
Remember Rich Dad Poor Dad mentioned about ESBI quantum . . . Some Self-employed had mistaken themselves to be a Business Owner. They though they own a provision shop and hired a shopkeeper to help them, and when they were away to run errant, their shopkeeper helped them to look after their shop is equal to passive income. However, he did not move away from from left to right quantum yet; because if you ask him to take 1 month leave, he will sure freak out!
For business Owner, they are mere a step ahead and nearer to passive income. However, they too, unable to take long leave, doing nothing and let their company run by itself!
So, my definition of passive income model is, I do not need to attend to it and yet, it auto generate income for me! Thus, how to achieve it?
INTERNET MARKETING!
Yes! Internet Marketing! Just imaging . . .
1. You have the whole world as your market place. 2. All transaction can be automated including: payment, comments, contents, viral marketing, others . . . etc
You don't need to attend to it. Once all established, begin heavy and massive marketing at initial state, and once it is established, it's automatic!
Thus, I urged all new entrepreneur who wanted to start their wealth building with little or low investment, to dive into Internet Marketing.
I have created several site and doing heavy marketing on it via pay-per-click, articles submission, signature and many other ways and once it is well-known, the rest are automatic.
There are three types of income?earned, portfolio and passive income. Most types of passive income are derived from rental/property, while other types of passive income are derived from royalties from patents or license agreements.
An income stream falling into this category is one where money is received usually on a regular basis, without continuing effort. This does not mean no effort at all; most passive income streams require great effort to start with.
Passive Activity Income- is defined to include all income generated from rental real estate investments-- regardless of how active the investor is in managing the property or properties.(Real Estate Principles A Value Approach 2nd edition pg.519)
Examples of Passive Income
* Income from rental property
* Royalties from writing a book.
* Earnings from Network Marketing
I don't know about you but that seems like alot of work for something that is supposed to be passive. So when you see the ads for passive income think about the examples listed above.
Lets look at the examples of passive income listed.
Income from rental property:
Ok this is one we've all heard about. You buy a house or inherit a house or a number of other ways and decide to generate some passive income by renting the house and collecting the residuals which are hopefully more than the payments and other financial obligations you have for the house. Once all your obligations are met with respect to conforming to all regulatory statutes you find a renter and start collecting your monthly rent checks, if you are lucky. More times than not the rent checks are late, the plumbing needs to be fixed and the roof is leaking. These are a small example of things that can and will go wrong with a rental property. Passive income? Hardly!
Royalties from writing a book:
Well if you have the patience,knowledge and time to actually write something that someone is willing to pay you for, then by all means go ahead and do it. Perhaps two years to write the book, another year to actually get someone to publish the book and then of course you need someone to buy the book. But once this happens yup, you guessed it passive income. Most of us can't wait that long and don't really know enough about any one subject to dedicate that much time to wait for the passive income. Passive income? Eventually!
Earnings from network marketing:
Now network marketing is not new but it is certainly gaining notoriety among the online business crowd. Online network marketing is a popular venue for those interested in starting a home based business but don't want the costs associated with the old "Brick and Mortar" approach to financial freedom. But before you can get to the point where you are generating passive income there are steps which need to be taken to help insure your success. You must first have a product to sell or someone else's product to sell, ie:(affiliate marketing). You need the right tools and business model to emulate in order to place the odds of succeeding in your favor. You need startup capital for all your advertising needs and web hosting accounts. Unless you are proficient at web authoring you will need the aid of a programmer to get you that fancy website which you hope will make you a small fortune. These, along with other necessities , (which is out of the scope of this article), are necessary for this to qualify as passive income. However, there are systems that can be setup for you which will take alot of the guesswork out of starting from scratch. Passive income? Done right it could be!
Both Albert Tay & Kevin Forrester are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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