Passive income must be part of every individual’s life if you want to become financial free in the future. Once you can gradually build your passive income until it surpasses your monthly expenses, then you are on your way to becoming financial free and perhaps wealthy for life. For those who do not have the basic knowledge of what we mean by passive income, it is an income that you earn without actively participating in the daily task of making the money. It is like making money while you sleep. For example, it was arguably concluded that the richest man in the world, Elon Musk, makes an average of $88.3M while sleeping (he sleeps for 6 hours). This perhaps may look amazing to you if you have not giving passive income a considerable attention in your life. But not to worry, the purpose of this article is to highlight the 5 major passive income you can create for yourself and pretty soon, you will be making money while sleeping too.
Published October 29th. 2022
Rental
Properties: Real estate has been around for quite a
long time, but many see it as a business. It is yet to come to the general
knowledge of everyone that real estate should be part of your life if you intend
to be financial free. I am not talking about buying your dream home. Such
decision is a good initiative, but in no time, it will become one of your
biggest liabilities. It will shelter you from the elements, no doubt, but will
extort money from your pocket through maintenance. And anything that takes
money from your pocket or bank account is a liability. When you acquire a
property, turn it into rental property and it will give you passive income
constantly. Once you have acquired one, get into the system of increasing the
numbers of your rental properties. Take this side talk seriously; the rich
makes the major part of their passive income from owning chains of rental
properties before buying their dream homes.
Intellectual
Property: Although we live in a society where intellectual
property is not so respected, it can become your major source of passive
income. Intellectual property can be an idea or design that someone has created
and the law prevents other people from copying it. Example of such is writing a
classic book. Writing a book can become
a huge source of passive income. J.K. Rowling was a poor school teacher until
she wrote the Harry Potter series and
became richer than the Queen of England. If you think you have the excellent
skill for writing, then put your back to work and chunk out classics. Maybe you
will turn out to be just another Chinua Achebe whose classic The Gods Are Not To Blame rakes in
millions, in different currencies, even after his death. Other intellectual
properties include recording your own all weather songs, making your own
movies, creating smart phone applications, software, e-books, informational or
self-help audio books, podcast or videos, and of course you can have your own inventions.
Whatever it is you are creating, make sure you protect your ideas with copyright
or patent. That way you can make more money, by suing anyone who steals your
idea or invention without your permission.
Network
Marketing: this is perhaps one of the strongest ways of
creating passive income for yourself if you are part of the first set of
persons in the pyramid scheme or the founder. However, the beginning stage of Multi-Level
Marketing (MLM) involves hard work, networking and marketing because you have
to recruit people to be part of the growing system. When the structure and
system is strong, it will become a money spinning investment for you. If you
are starting at the bottom of the chain of a network marketing business, take
this advice; see yourself as your own boss running your own personal company
and put all your energy into it. You can still grow your network to a sizeable
number, and then you will start reaping the profit of your hard labor.
Franchising:
This part of passive income is probably new to some Nigerians, but cannot be
ruled out when you intend to make passive income part of your life. Franchising
is simply selling your brand to a second party who wishes to leverage on your
business model. Such will pay you very reasonable fee for buying your franchise
and definitely you will continue to get a lifetime percentage from every income
such an individual makes from leveraging on your brand. Several brands from
abroad arrived in Africa through franchising. Yours can also do same. Tara
Fela-Durotoye is doing that with House of Tara. So, if you own a business, work
hard to build it into a household name and once it becomes a formidable brand,
franchising it will be very easy.
Paper
Asset: Although paper asset is arguably accepted as
passive income, it is also a form of passive income that should be part of your
life. Paper asset include shares, mutual funds, insurance, fixed deposit,
T-Bill and many more. It is important that you separate part of your monthly
income to acquire some of these paper assets knowing you can start receiving
dividends, interests and what have you after some months. Some of these are
very secure with reasonable interest rate, while some are volatile. Whichever
one you choose, make sure you have excellent knowledge on how it works and how
to grow your income from where you are to where you want to be.
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