A few ideas to start with:
Continuing my series on how to reach a 6 figure income without working 50 hours a week, I will now move forward and talk more about passive sources of income. If you want to work less and earn more, the only way to make it happen is to create little money making machine that works for you while you are sleeping (i.e. generating passive sources of income).
Passive income has been “the buzz phrase” of the 21st Century. Coming from the strong wave of techno’s and dotcom’s, everybody started to think they could become an online wiz and make money via the internet. Well truth is that real life is not a bowl full of cherries, it’s more like a box of chocolates, you never know what your going to get! and usually it ain’t that easy!
Passive income is hard to earn
Regardless of the source of your income, all kinds of passive income is difficult to earn at first. Unfortunately, we only see the end results of those who succeed like John Chow or Pro Bloggers who are making a few hundred thousand dollars annually with their “passive” income models (they are still work many hours to earn their keep).
So making money online is not that easy and the competition is rough. It is probably tougher since you compete against the entire World! Just take The Financial Blogger as an example. While it is primarily a Canadian Blog (Canada is still more than 35 million people!), most people that read English and are interested in personal finance will compare my blog to all the other English blogs out there (coming from around the globe). So why should they read my blog instead of ten thousand others? This is the question you need to ask yourself before you start your online adventure.
While this series will be more about how to create an online passive income (since this is what I was able to do!), I wanted to share a few other possibilities I have considered and that may be of interest to you:
#1 Rental properties
Buying real estate is definitely part of my plan to become a millionaire. While it is more complicated than it seems, I still think that owning property is a really good way to generate income though passive channels.
People will always have to live somewhere and banks love tangible assets. So obtaining financing for such projects is easier than trying to get an unsecured line of credit to buy a dotcom address 😉
On the down side, you are required to have a substantial downpayment before thinking of buying something. In addition to that, you should also be or know a handyman that will take care of your property maintenance. Sometimes renters can be pretty annoying too 😉
#2 Investment income
Then again, who has not dreamed about having dividend income deposited in their bank account on a monthly basis? On the other hand, in order to be able to live from your dividend or interest income, one must have a lot of money invested in the market!
Investment income as a passive source of income will probably only happen at my retirement stage so I will need to build a strong portfolio.
#3 Starting a “real” company
If you are good at what you do at your job, you may want to consider creating a tangible company. However, you must remain very careful about your primary goals: you want to create a passive source of income, not become your own boss.
If you simply become self employed, you will work the very same amount of hours (and might earn more than before). However, your “company” will depend on you and you alone. This is not a passive source of income. You must be able to hire others to do most of the work and generate income even when you are not there. This is a common mistake most people experience.
#4 Making money online
Making money online is probably the most cliché expression when we talk about passive income. As I said before, we all think that we only need a computer and an internet connection to succeed…. Ooohhh wishful thinking!
But seriously folks, you’ll need several skills to succeed:
– Technical skills to build and maintain your website
– Writing skills to produce content
– Search Engine Optimization skills to be searched, found and read
– Monetization skills to create, diversify and maintain multiple sources of income streams generated by your websites.
If you have (or can get access) to these 4 pillars of generating money online, you will like what will follow on this blog in the upcoming months ;-). From time to time, I will talk about making money online, how to buy a blog and manage a blog. The Financial Blogger won’t transform into one of those then thousand blogs about making money online. It will remain a Personal Financial Blog but I will add a making money online side to it. Stay tuned!