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 in no time. 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 are sleeping.
Published October 5th. 2020
For example, it was
arguably concluded that Bill Gates makes an average of 218, 000 dollars per
hour while sleeping. So, if he sleeps for 8 hours, he would be making nothing
less than 1,744,000 dollars. 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 incomes
you can create for yourself and pretty soon, you will be making money while
sleeping too.
Rental
Properties: Real estate has been around for quite a
long time, but many sees it as 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 or a piece
of land in a remote area. 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. Although
your piece of land or dream home will appreciate over time, the rich do not
focus their energy on capital gain. They focus on cash flow, thereby investing
in rental properties that will bring monthly or yearly returns into their pockets
or bank accounts. Such rental properties become sources of passive income for
them. So, when you acquire a piece of property, turn it into rental property
and it will forever bring money into your bank account even after your death.
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 could 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 or series of books. Writing a book or books can become a huge
source of passive income. J.K. Rowling was quite 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. Or you will follow the
path of Chimamanda Adichie whose books are part of the secondary schools and tertiary
institutions curriculum. 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 DVDs, 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 it. When the structure and system is strong, it
will become a money spinning investment for you. But if you are starting at the
bottom of the chain, 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 wish to leverage on your
business model. Such will pay you very reasonable fee for buying your franchise
and definitely you will continue to get lifetime percentage from every income
such an individual makes from leveraging on your brand. 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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