Create your very own Auto Publish News/Blog Site and Earn Passive Income in Just 4 Easy Steps


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In a world where economic stability can seem like a distant dream, taking control of your financial future is more important than ever. Passive income isn't just a buzzword; It's a strategic approach to diversifying your income streams and ensuring financial independence.

At its core, passive income is about making your money work for you. It's income generated with minimal ongoing effort, a stark contrast to the 9-to-5 grind. The beauty of passive income lies in its ability to generate income over time, often with an initial investment of time or resources.

Related: 5 Ways Passive Income Can Help You Transform Your Financial Future

Understanding Passive Income

Passive income is not the same as “no effort.” This typically requires an initial investment of time, effort, or capital. But once these income streams are established, they require much less active involvement compared to a traditional job.

If you work, you will never be truly financially free. Financial freedom means you have the freedom to pursue anything in life without financial constraints. This is why passive income is so important for your financial growth. To be financially free, you MUST have a passive income portfolio. Over time, these streams can grow and thicken. This not only offers you stability, but also the possibility of exponential wealth growth.

Find your Financial Independence Number (FIN)

Your Financial Independence Number (FIN) is the amount of money you need from passive income sources to avoid relying on traditional active income. In other words, it is the amount you need to earn from your passive income sources to cover your expenses and not have to work. To find your VIN you will want:

  1. Add up your direct monthly expenses (groceries, utilities, transportation, etc.)

  2. Calculate your indirect monthly expenses for one month only (e.g. mortgage: divide annual amount by 12)

  3. Add your monthly subscriptions

  4. Make a total of all three categories above

  5. Add a buffer of 10% of the total (e.g. $5,000 = $500).

  6. Add the last two categories to create the total – this is your monthly VIN

Use your VIN number to analyze your investment goals. It's a great starting point for building your passive income portfolio.

Types of passive income

The concept of passive income can be divided into two main categories:

1. Investment-related income: This involves putting your money into assets or ventures such as stocks, real estate or mutual funds.

2. Resource-based income: This includes leveraging assets you own, such as renting out real estate or monetizing skills through digital products.

10 Strategies to Build Your Passive Income Portfolio

Starting does not necessarily require a large financial investment. Many passive income strategies can be implemented with minimal resources but require your creativity and commitment.

  1. Energy Investments (Oil and Gas): The elite of passive income, very lucrative market and high returns.

  2. Rental properties: Potentially lucrative but require management

  3. Money Market Accounts: A deposit account with a lower yield and lower interest income

  4. Index funds: A diversified, low-effort stock market investment

  5. Dividend stocks: Invest in companies that pay regular dividends

  6. Small Business Investing: Acquire equity stakes in local companies

  7. Content creation: Use your expertise to create and sell digital products

  8. Creative Work: Monetize artistic talent through platforms like Etsy or Shutterstock

  9. Affiliate Marketing: Earn commissions by marketing products on your blog or website

  10. Asset Rental: Earn income by renting out real estate, vehicles or equipment

Related: Anyone can start a passive income side business to make money easily – but only if you know these 5 important tips first.

Risk tolerance

To find the right source of passive income to build your portfolio, you need to know your risk tolerance. Risk tolerance refers to how much risk you can take without compromising your financial security. There are some great risk tolerance calculators online that can analyze this for you. Make sure you have completed this step before diving in.

Accredited Investing – World Class Growth

Because not all passive income sources are created equal, some require you to reach certain milestones to start using them. These streams often require you to be an accredited investor. Simply put, being an accredited investor means that you meet one of the following two criteria:

  1. You have an annual income of more than $200,000 for the past two years (or $300,000 with a spouse) and expect it to be the same next year; and or

  2. You have a net worth of more than $1 million, not including the value of your primary residence.

Higher return investments generally require you to achieve this status. This is because they are often over-the-counter and carry a higher level of risk compared to public investments. But just because they have higher risk doesn't mean the risk itself is high – it just means it's higher than publicly available investments. Start by educating yourself about what accredited investing is and aim for this as your long-term investment goal.

Final Tips: Do your research

Now that I've introduced you to the concept of passive income and you know the basics, it's time to learn more. There are some great resources that can guide you through this article in more detail. Download an audiobook on passive income and play it in the car every day on the way to work. A small amount of growth every day produces great results.

There are also some excellent online investment groups you can join. Hearing other people's perspectives and their approaches to passive income generation can inspire you to take action on your own financial journey.

As always, take action today! Watch another video on passive income and learn more about this topic. Beyond the investment, your education is your greatest asset. With knowledge you are unstoppable. I'm cheering you on as you start your journey to financial freedom from the sidelines. Here’s to safe and intelligent wealth creation!

Related: 8 Ways to Make Money While You Sleep

Create your very own Auto Publish News/Blog Site and Earn Passive Income in Just 4 Easy Steps

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