Have you dreamed of making money while you sleep? Did you even know that this is a possibility? The concept is called passive income and it plays a major role in obtaining financial freedom and wealth creation.
What is Passive Income?
The basic principle behind passive income is to make money while you are not working. Unlike of a job, where you exchanging time for money, passive income sources focus on creating or buying an asset that creates a steady stream of cash flow.
The idea is to either hire employees or find a system that does not require any. I believe in showing people and not always telling people what to do. The following is a list of the passive income sources I have stared:
Passive Income Sources That I Currently Hold:
- Vending business: A total of 160 locations and 1 maintenance employee. Provides monthly cash flow and doubles my income.
- Online marketing business: Provides cash flow without a high overhead compared to vending.
- Rental real estate: Currently looking for multi-unit dwellings. Living in one unit while renting out the others provides solid cash flow that will increase over time. A deal done correctly could have you living for free as well as collecting cash each month.
- Stocks: Yes I do have stocks. I have very little however. The stock portion of my total net worth is less than 10%. Some stocks pay monthly dividends that could come to you even during hard times. At the time of this writing, all my stocks still pay dividends even 8 months after the crash.
- Mutual funds: I have even less mutual funds than I do stocks. I no longer put money into mutual funds because I have increased my knowledge and I feel that I can do better on my own.
Can you see a common theme here? Most of the investments above provide cash flow on a consistent basis. I am a fanatic when it comes to cash flow. In my mind cash flow equals freedom.
Extra Passive Income Ideas
If you don’t like the things I am doing, here are a few ideas to help you build your own passive income sources.
- Laundry mats: Provides great cash flow and people will always need to wash their clothes.
- Car washes: As long as there are cars people will need to wash them.
- Private investing: These people are also known as angle investors. These people lend money at above average rates (usually 12-14%) in a variety of different fields. I used an angle investor for my vending business and paid him 12%. You could simply lend out money as a mortgage, and then collect the interest. Enough of these and you could live off of the interest and live your life.
- Any business: Buying a business means buying a system that provides cash flow. If you buy a business but are required to do everything then you really didn’t buy a business, you bought a job. The whole point is freedom, buying a job won’t get you there.
These are just a few of the things that you can do to build your own passive income sources. There is no right or wrong when it comes to investing. The investments will either be right or wrong for you, and you will either make or loose money. The important thing is to start, make mistakes and move forward. Find out what works for you and work towards your dreams.
This is a Guest Post by a fellow Yakezie Member, Brandon Schmid who is the president of Angulus Marketing Ltd. and has spent most of his adult life studying money and how it works.
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