Not All Income Is Created Equal

One of the common characteristics of self-made millionaires is that they generate income from multiple sources. In fact, 84% of the self-made millionaires in my Rich Habits Study had three streams of income.

But, not all income is created equal.

One or more of those streams of income are what’s called passive income. Passive income is income that you do not have to work for to generate income. It is automatic income.

An example is an annuity. An annuity is an investment that you make at some point which grows over time and eventually generates a stream of income.

Other examples include: rental income, dividends, interest, capital gains, book royalties, ad dollars from a blog or website, income from a phone app, licensing fees, franchise fees, revenue from the sale of a business, silent partner income, etc.

Think of passive income as any investment that generates income many years down the road.

It is an income stream that is commonplace among self-made millionaires.

The investments that generate passive income are working for you all the time.

If you’re not making money when you sleep, on the weekends or on vacations, it will be very difficult for you to become wealthy or even financially independent.

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Tom Corley

Tom Corley is an accountant, financial planner, public speaker, and author of the books “Effort-Less Wealth: Smart Money Habits At Every Stage of Your Life” and “RichKids: How to Raise Our Children to Be Happy and Successful in Life“.  Corley’s work has appeared on CNN, USA Today, The Huffington Post, SUCCESS Magazine, and many other media outlets and podcasts in the U.S. and 27 other countries. Tom is a frequent contributor to Business Insider and CNBC.