Do you think it is possible to earn money without working? When we talk about streams of passive income we refer to the possibility of generating income without your work or effort, and although it sounds unrealistic, today many people enjoy financial freedom thanks to their residual income
In other words, passive income is all those amounts of money that you receive in your bank account without the need for a recent job or effort.
However, it must be made clear that passive income does not mean that you will not have to do anything at all to obtain it, and that it will magically appear in your bank account.
What is passive income?
A passive income is that income that we generate without dedicating all of our time and work to generate it. What some call “earning money while you sleep.”
In this type of income, the greatest investment of time and personal effort is made at the beginning: to configure it, analyze it and decide what to buy and its subsequent exploitation format.
Once this is done, the profits begin to be generated almost autonomously.
Passive income arises as a result of investments that periodically – and without additional effort – generate profits on a regular basis.
How do you get passive income?
Although passive income is obtained without the need to work directly, as we already mentioned, these do not appear in your account without first having taken a series of decisions and actions consistent with your money.
That is, to learn how to generate passive income you must first know how money works , and then use this knowledge so that it begins to work for you.
Some ways to generate passive income are:
Investing money in assets:
For example, the purchase of a house, an apartment or other property and then rent it and receive money monthly for this concept. Here we leave you a guide to make money with real estate investments.
Investing money in stocks:
In this case, the money will be generated from the dividends that are paid monthly for being part (owner, partner, shareholder) of a company or organization.
Investing money owning a business:
It is an alternative in the medium or long term, as it implies that you learn How to Start a Business , develop it, grow it and hire people who are in charge of running it.
Additionally you can generate passive income with other types of activities. For example, if you are a professional, you can develop online courses; or if you have letter skills, you can write a book.
Even with a YouTube channel with evergreen content – which does not expire – it is possible to obtain what is also known as residual income.
Before showing you some examples of passive income, we share an online course to generate passive income with your ebooks, courses and blogs.
Examples of passive income:
On this subject there is a world of possibilities, the options are varied where there are different degrees of difficulty, which depend on the opportunities and knowledge of each one, but in general, they will help you to generate residual income in the future.
• Own company:
It is the dream of many people around the world, since it not only implies the possibility of ending that direct dependence on an employer, but also an important source of passive income once you have reached that necessary balance point with a good team of work that can be done.
• Collection of royalties:
This is possible through inventions or artistic creations; It also applies to book authors, film creators or song authors, since it is something that was done once but that every opportunity that is used by another person implies the payment of what is known as royalties.
• Smartphone applications:
It is an option that has become very popular in recent years and that involves the monetization of these inventions that are highly demanded by so many mobile phone users.
The options you have to generate income through a mobile application are the volume of downloads in different online stores, sell products within the same application, associate with brands and charge for their presence in the App, among others.
• Snack or coffee machines :
This idea is a very simple option that involves buying the device from authorized agents or someone who wants to sell it.
One of the keys is the location of the machine, since it must be a place that you consider strategic within your city, which guarantees a good flow of people that generates sales without your presence.
• Sale of insurance policies:
Although for many it is considered a job, this option offers you the possibility of generating passive income since, once you sell the product, each year the client must renew it, which guarantees an annual income until the person decides to cancel the policy.
Other examples of passive income, depending on the country where you live, is the investment in financial assets such as bonds, obligations, bills, as well as in the stock market, which will allow you to receive monthly, semi-annual or annually a monetary recognition that fall within of this category.
Steps to live off passive income:
No, it is not a utopia. Yes, it is possible to live comfortably without the need to work eight or even many more hours a day.
But, to live on passive income, the fundamental thing is to know the subject in question to be able to invest with much more peace of mind and get the most out of it.
For example, for some specialists in the field, savings accounts are risky investments that are not really worth it, because they do not generate higher interest and do not leave any learning or teaching that is useful for the future.
Although each financial reality is quite different, it is possible to offer some general recommendations to be able to live on passive income or the so-called residual income:
1. It takes time:
The first thing to understand is that regardless of what they may tell you, getting to the point where you can be financially dependent on passive income does require significant effort and is not something that you will achieve overnight. Well, it is not an easy task.
2. Passive income involves sacrifices:
There are two passive income sacrifices that you have to be willing to make. The first has to do with an initial economic investment , and the second is related to an investment of time and effort, where persistence plays a fundamental role as a key to success.
3. You should get advice before making a decision:
Before making an important decision with your money, and defining what you are going to invest it in, it is important that you have criteria that justify your investment.
For example, look for an alternative that has great potential for growth and will bring you money in the medium and long term.
For this you could advice from professionals who are capable of doing trend analysis, who know the sector and who can offer you an accurate recommendation.
In this way you will be placing your resources in a business that you already know works well and has a future. Likewise, you can opt for a traditional business with a high probability of success or that involves innovation.
5. Generate residual income with your creativity:
One last tip is to take what’s on your head to get the most out of it. That is, exploit whatever talent you have hidden and turn it into a business opportunity that, in the long run, becomes an important passive income.
We are talking about creativity at the service of your financial growth.
There are many other recommendations, but the idea is that you choose the one that best suits your current reality and your possibilities.
Remember that even if you don’t believe it, you have many more possibilities than you think to achieve the desired financial independence.
Why is streams passive income important?
The objective is not to depend solely on salary to obtain income, since it is a very high risk that can be summarized as follows: if the work stops for some reason or another, the entry of money also stops and that is very serious.
We cannot be slaves of those income that imply the consideration of a service, but rather choose other alternatives, through leverage, to achieve the much desired financial freedom.
When we structure a passive income it is because we have formed a flow that will be constantly entering without the need for a fixed work schedule as is the case with conventional jobs and active income.
This is why it is important that you bear in mind that this type of income requires a significant effort, although it is also valid to say that it is very well worth it.
On the other hand, if you do not have a lot of money to start your path to financial freedom, you should not be discouraged, because you can start with a modest investment.
How to generate streams of passive income online
Among the many possibilities that exist to achieve passive income, the Internet can become a great ally, with considerably attractive alternatives, taking into consideration that they imply a high initial investment.
Those who are dedicated to this area recommend great projects that can change your life. The basic idea behind this is to obtain money without depending on conventional income, by posing a much larger picture with the help of the network.
Like conventional passive income, when creating an online business you must work so that it generates results. Remember that this requires effort, dedication and hours of work, otherwise it will not work.
Here are some ideas for passive income online:
If you have time available and you do not want to continue being a slave to your fortnights, you can join the affiliate market.
This consists of advertising third-party products and earning a commission each time a customer purchases any of these items or services. Depending on the platform, the commissions have different percentages.
Another alternative is to create your own products and it does not necessarily have to be something physical, but rather intellectual, such as online courses, videos, books, texts, images, infographics, and audios that you can promote using different platforms.
Advertising on your website:
A third option is to allow your website, your blog or your YouTube channel, to name a few examples, to have ads from advertising platforms like Google AdSense.
The key to generating interesting passive income is to generate traffic, that is, the more visits you have, the greater your income.
For this last idea, you must have a web page or a content blog where you can charge for your exclusive content.
The more specific and specialized the content, the more profitable your website can be, since you will be solving a specific need for the community that reads you.
Based on what you just read, Internet business opportunities will have a greater chance of success as you build a significant fan base.
For this reason, before putting a product on the online market, it is advisable to work first to build an audience that will surely support you later in your endeavor.
How to create assets that generate passive income:
The good news is that it is not a requirement to have significant capital to create or build assets that generate passive income.
For example, easy assets that generate residual income could be: web applications, real estate, stocks that pay dividends, content for social networks, YouTube videos, web pages, a blog with traffic and that has advertising.
The creation of an asset certainly requires time, effort and, likewise, resources, because for it to have the definition of an asset it has to be monetized; that is, you must invest money in your pocket.
Although we can also talk about something as simple as a computer, which is an asset that can very well generate passive income. It is an asset that, in short, can very well work for you, while you do other activities.
The key to passive income is precisely to generate money without the need for our physical presence.
The idea is to delegate and make use of tools and systems that we have at our disposal in order to leverage ourselves and achieve the objective.
Remember that not all your life you will necessarily want to do what you currently do or maybe you will not have the same energy or time to do it and it is precisely at that moment when you will need passive income or residual income.
Finally, the million dollar question, does streams of passive income really exist?
On passive income there is a lot of fabric to cut because there are many opinions that exist about it, even some experts say that they do not exist, or that they are not really what they seem.
Detractors of streams of passive income claim that money does not really work for us in a “magical” way, as some financial gurus claim, and that residual income as the key to financial freedom does not really exist.
The argument they offer is that it is simply a utopia, an idea that sells a lot. But, according to them, the investment of time that is made to achieve residual income makes them stop being passive, since you have to look for the investment, analyze it, carry out operations and then monitor it, which means an activity.
However, with these ideas that you just read, you can be sure that although you must work to generate income, when you develop a business or model that works without you, and more importantly, that generates income without your effort or work directly, you will be closer to achieving your financial independence.