What Is Passive Income
Passive income is income received on a regular basis without much effort aside from the initial investment of time. For example, letâs say you want to make passive income, and youâve decided to create an eBook about saving money. You will create the book, put it online, and other people will buy it. Every time someone downloads your book, you will make passive income. That is just one passive income idea. There are many ways you can obtain passive income which can range from investments, classes, books, and many more options. Though passive income is a great source of money, it is important to understand the misconceptions surrounding passive income.
Misconceptions of Passive Income
Many people believe that passive income is the easiest income to obtain. Honestly, passive income is easy to obtain, if you are willing to put in the initial work without receiving money in advance.
When it comes to passive income, you cannot simply create it and leave it. That is a common misconception surrounding passive income. If you think that you will make a lot of money without maintaining or promoting your projects, then you will be disappointed. Yes, passive income is wonderful because you can make money as you do other things that arenât related to working. However, passive income is not 100% passive.
Passive income is not 100% passive. You will need to maintain your projects and promote them. Letâs face it, if people do not know your product or service exists, they will not buy it. Also, itâs important to maintain your products and services. Information changes and you have to be willing to change your products as well.
Unlike a regular job, with passive income, you only receive money when customers buy your product or service. Therefore, passive income is not always stable.
Passive Income & Stability
Making passive income is great. Being able to receive money in your bank account while you do things other than work is a rewarding feeling. However, passive income is rarely stable. Some months, you may make thousands of dollars from your passive income project while other months, you may only make a few hundred.
A prime example of the stability of passive incomeÂ is Pat Flynn. In January 2015, he made $109,175.58 in passive income. Yes, you read that correctly. $109,175.58! The following month, he made $87,418.77. That is a difference of -$21,756.81. Keep this into consideration as you build your passive income portfolio. Many factors can dictate the stability of your passive income.
If you want to make money while you sleep, travel, spend time with family, or watch TV, then passive income is definitely the best way to do that. Think of an income project youâd like to create, develop it, promote it and maintain it. You may very well be on your way to a lifetime of passive income.
Photo:Â 401(K) 2012