3 Phases of Creating Passive Income
There are many different definitions of passive income that are thrown around by various experts. In general, creating passive income means that once you have spent your time developing and creating an income stream, you should never need to go back and worry about it again. In theory that passive income stream that you have worked so hard for will earn you money overtime with little to no work on your part. Instead of spending a lot of your time maintaining this income stream, you can devote your precious hours to creating a new passive income stream or maybe just spend it relaxing and enjoying life!
Anyone who is interested in building passive income streams should understand the 3 phases it takes to establish a successful income source. Here are the 3 high level phases involved.
- Research – One of the most important steps in creating passive income is conducting proper research before you begin. This is especially important if you have to spend any money to create a source of income. For example, a newcomer may think they can buy a cheap domain name and hosting service for a few dollars and in very short time create income from a website or blog. Proper research would indicate that generating income from a website or blog less than a year old is extremely difficult but not impossible. Even if the start up costs are $0, you should still conduct your research before devoting your time to a project that may not work.
- Build – Once you have conducted your due diligence and are comfortable with creating a particular income stream, it is time to build it. This phase could take anywhere from a few minutes to several years depending on the type of passive income opportunity. Writing an affiliate article and posting it may take 15 minutes of your time where starting a business that you eventually turn over to a manager to run could take you years. The key here is that you finished phase 1 and are confident in your choice.
- Maintain – The maintenance phase is where many disagree about the definition of passive income. Regardless of the passive income streams you have created, there is some effort of maintenance involved in keeping that opportunity earning money for you. Even investing in a certificate of deposit requires you to review new rates and rollover an expired CD into a new one. While the time may be minimal, you still must maintain and nurture your hard work!
Creating passive income streams can be very challenging at times. One must be aware that not every income stream created will be successful. The key is to recognize what works and what fails and use that information moving forward to your advantage. Following the 3 phases listed above is one way to put you on the right path for success!
Are you ready to learn a lot more about the exciting world of passive income? Picture yourself sitting with friends and family on a sunny beach sipping on a cocktail without a care in the world. Is this how you want to retire? Maybe the beach isn’t your thing and you want to devote your spare time to volunteer work? Or maybe you want to be able to stay at home and raise your kids first hand?
Regardless your long term goals, most people would love to be able to create income streams that save them time and allow them financial freedom. The days about worrying if your job is in jeopardy or how you are going to pay your next months mortgage can be eliminated. Creating passive income is not easy and is not a get rich quick scheme. However, hard work and dedication will allow you to reach these goals!