Passive income is sweet, as it is an income received on a regular basis, with little effort required to maintain it. Examples of these earnings are rental income from property, royalties from publishing a book, advertising income generated from websites and blogs, dividend income from stock investments, interests from loans receivables and cash deposits in banks, pensions, and profit from business where there is no extensive involvement in operating such enterprise. When you are earning from passive income, life would be easier and you will have more time to spend with your family and even with yourself. Thus, it is very important to know and learn the secret on how to create wealth and have a passive income. So how can we build it?
Building passive income
Passive income isn’t one thing that is earned instantly or overnight, but it is something that built with a lot of time, hard work, patience, consistency and the right strategy. For example, to earn income from rent, you need to have a property. You need to work hard for a period of time to earn enough money to buy a property. This is also the same with earning interest income from deposits in banks. Of course you first need to have a bundle of bucks to be deposited in banks to earn a decent amount of interest. Another example is the passive income earned from advertising revenue generated by a website or blog. Before a blog becomes profitable, it must first attract a lot of regular visitors. A blog needs high amount of traffic to generate enough profit. And before a blog gain that kind of traffic, the blogger or its owner must first invest diligence, patience, focus and time for experimenting, learning and applying the most effective strategies.
This blog you are reading is one example of a source of passive income. Although, the amount is not that high compare to other blogs out there that are earning hundred thousands of dollars every month, this blog generates hundred of dollars a month even without exerting much effort to maintain that income. I can even earn that amount even if I only work one day in a week to update this blog. But of course, earning is not only what in my mind. Helping my visitors and readers by sharing them useful information is one vital activity that I always keep in mind and do continuously. Besides, this income is not going to decrease, and it will even increase and increase if I will keep on working.
The secret to passive income
Passive income should have a foundation or should be based on a valuable asset. They are like fruits bear by a tree. As we’ve discussed earlier, rental income is based on a valuable property, interest income is based on a decent amount of cash, dividend income is based on valuable stocks, and online advertising income is based on a high-traffic website or blog. In other words they are not based on things that are created in an instant, but they are based on assets built through time. The secret to creating passive income starts from choosing the best way where you can be passionate about in building such income. In my case, I love writing and teaching people what I know. That is why I choose blogging and publishing useful information that are aligned with my expertise, i.e., business and finance (well, I’m honestly and humbly a Certified Public Accountant). When you have chosen your best interest, you need to value it and do it patiently and consistently.
Just like planting a tree, you need to nurture it and wait patiently to grow it gradually. Trees grow slowly, but they live lastingly. And when they bear fruits, you can repeatedly and regularly harvest them without planting them again. Unlike planting rice, they grow quickly, and they also die quickly. You can only harvest rice once, and if you want to make a second harvest, you need to plant rice again. This is not what passive income is. Passive income is like the fruits we harvest from a tree. Thus, if you want to gain passive income, you need to have a longer plan – a plan that includes longer steps that require more patience, hard work and focus. Just like this blog, I build it for several months with determination and consistent investment of time, effort and attention. This blog is starting to bear fruits, but they are not yet ripe. That is why I’m still developing and enriching this blog until it becomes like a grown tree… a fully developed and established web property or asset that generates enough passive income.