The new trend in personal finance is achieving passive income (PI). PI can also be known as cashflow. In its most basic form, passive income can be defined as making money with little to no effort. EVERYONE TALKS ABOUT IT TODAY. A simple search on the internet will bring up a plethora of ideas or opportunities about how to achieve PI.
When I first learned about PI, I was thoroughly intrigued. Make money with little to no effort? Sounds like a winning formula to me! I’m sure almost anyone who learns about this would be interested.
The biggest problem I found with getting any form of PI is that it requires some form of action or effort to achieve. Nothing in the world is free, at least initially.
Getting PI works by trading either money or time for potential money in the future; there is some form of invested money or time that is required before you start to receive any form of PI. The steps to finding out what form of PI works for you requires you to first learn about it, such as reading this blog post! Then, you must choose which form of PI you are going to implement. There are different levels of PI that I have broken down into 2 levels based on money/time requirement. Here’s the list:
Low-Level Money/Time Investment
- High-yield savings accounts (the best are online)
- Top 2 I have used are Ally Bank and Synchrony Bank
- CDs at a bank/online bank
- Micro Investment Apps
- Top 2 I have used are Stash and Acorns
- Real Estate Investment Trusts (REIT)
- Invest in a 401K/IRA
- Fidelity, Charles Schwab, Vanguard
- Peer-to-peer lending
- Lending Club
High-Level Money/Time Investment
- Start a blog
- Requires strategies to monetize it
- Start a YouTube channel sharing your skill/expertise
- Podcasting
- Flip or buy real estate for rental income
- Sell an eBook/eCourse
- Rent out a room in your house/rent out your car
- Buy a website/business
- Side hustling
I should also state that in general, the low-level PI methods generate a lower return of money than the high-level PI methods. The low-level PI methods are also less risky, whereas the high-level PI methods are more risky. The inverse relationship of risk-reward remains with finding the PI strategy best suited for you.
The last step is to take action on getting your PI! Some of these will take longer before any form of PI comes in and some will require continued money or time to keep generating PI, but it feels great once you can see money being generated in your money accounts.
There are plenty of other ways to earn PI that I did not mention, but these ones I can at least attest to by either personally going through the process and committing to the initial investment of these forms of PI or read enough about them that I have a general sense of how they work. It is your duty to do the due diligence to learn and actively start working towards creating PI for yourself. PI is the new way towards achieving financial freedom.
Many consider a part-time job a form of PI, but it’s just another time trade for money. Sometimes, this can be the answer for you to bring in extra income initially to fund the PI investment.
I’ll end this post with a famous quote by the great investor Warren Buffet; “If you don’t find a way to make money while you sleep, you will work until you die.”
To the New World and the New You, much success in finding your financial freedom.