Passive Income – It can change your life
This is a guest post by Passive Family Income. Please check out the blog and subscribe to the RSS feed.
The current economic recession has forced many people to alter their daily lives. Whether it be retirees going back to work, mothers and fathers taking on second jobs, or families losing their homes – the recession is here to stay. Do you rely on your job for all of your income generation? If so – why not take control of your finances and start creating passive income? There are various levels and definitions of passive income that people have. In general, it is the notion of purchasing assets or items that will turn around and make you money without little to no effort on your part. The key thing about passive income is that it requires a lot of work up front – but has the opportunity to pay you over and over and over. That simple concept could change your life forever.
Sounds too good to be true? Not really. There are many people who are building their passive income streams on a daily basis. One example of creating this type of income is from purchasing a stock that consistently pays a quarterly or monthly dividend. While the stock market has seen major declines recently – strong companies with cash will still consistently pay you a dividend. That is passive income. Once you purchased the stock and did your due diligence up front – there was no other work on your part except for keeping tabs on the company.
Another perfect example of passive income is investing a chunk of your hard earned money into a certificate of deposit (CD). Once you purchase the CD, it pays you interest which is a pure form of passive income. There are hundreds of different ways to create this type of income that are more complex – but the possibilities are endless. An important thing to keep in mind is that anyone interested in creating this type of income should diversify across many different opportunities.
Creating several streams of passive income can actually change your life. Here are 5 reasons why building passive income streams can have a positive impact on your life.
- Control – It allows you to take control and ownership of your finances.
- Creativity – Passive income could allow you to become your own boss, depending on your commitment – which leads to creativity.
- Independence – This type of income allows you be independent and make your own decisions – not relying for income and benefits from your daily job.
- Freedom – Gives you the freedom to make your own choices.
- Responsibility – Puts the responsibility for your finances in your control – not a company’s.
There are probably many other reasons why passive income can change your life than what was listed above. However, the underlying concept is that creating these streams of income will put you in control of your personal finances and allow you to define the way you want to live.
Do you create passive income?
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So far I am working on 3 steady sources of passive income. Rental property, dividends, and my blog (well not passive but you get the point). The the freedom to wake up whenever I want, the freedom to travel as I wish, and the freedom to perform in the manner I wish to.
Good article. I really liked what you said about owning dividend yielding stocks. That is a great way to invest especially if you have enough capital available to you to where the dividend can be a signifant sum of money.
It all began when I started reading Robert Allen and Robert Kyosaki’s books. Nothing good be the same after that! I am grateful for their books, and for blogs like this, that show us we can create our own economy!
Passive income has definitely changed my life. As an at-home mom of three little ones, my time is very limited. Building up residual income streams is the only way to maximize my earnings while minimizing the time I spend “working.” Thanks to ongoing income streams, I am able to help support the family and spend time with the people I love.
What people are forgetting is that you need to tie up a lot of capital in order to produce a meaningful passive income stream. Current historically low interest rates work against you since income-producing assets don’t provide much yield (and those that do are risky). There is no free lunch.
I do agree that creating passive income sources does give you freedom as you mentioned above. As long as I have the potential to earn income while we sleep, I’ll continue searching for new ways to earn more.