These examples of passive income are from a financial expert and author who knows how to earn money on the side.
Brandon Wilkins is the author of Getting Rich is Simple…But It Ain’t Easy! Here, he describes how to make money with passive income and multiple streams of income.
Before his tips, a quip:
“The rule is not to talk about money with people who have much more or much less than you,” said Katherine Whitehorn.
But, how do you know who has more or less money than you, unless you talk about it first? I guess you have to run the risk of putting your financial foot in your mouth! To learn more about multiple passive income streams, read Multiple Streams of Internet Income: How Ordinary People Make Extraordinary Money Online, 2nd Edition.
And, here are Wilkins’ money tips…
Examples of Passive Income – How to Earn Money on the Side
Remember that creating multiple streams of income is one way to earn money without working hard. Multiple streams of income involves making money from more than one source. Some people think having several jobs is a way to create multiple income streams. And while technically that is true, it’s very limited.
To get a full understanding of creating multiple passive income streams, it’s important to understand the difference between two main types of income: active and passive.
Active income is when an individual trades their time for dollars, such as working at a job for money. If you don’t work, you don’t get paid. Having several jobs is a limited way of building multiple income streams; but eventually there is a cap to the number of jobs and time one person can have and do.
Passive income, on the other hand, is where money works for you. You do the work once, but get paid over and over. That’s the “earning money with little effort” part of the equation.
Examples of passive income:
- Owning a business – you start (or buy) a business and get it to the point where your managers/employees run it on a daily basis, but you still reap financial rewards
- Owning securities (e.g. stocks, mutual funds, etc.) – you do the research, buy the security and get paid continuously through dividends, appreciation and stock splits
- Royalties – you can write a song or a book or a video game and get paid from selling it over and over again
- Real estate – you purchase the property and get paid perpetually through rental income, property appreciation, etc.
The benefit of multiple income streams is that you can suffer a loss or downturn and still be in good financial shape because you’re not solely dependent on one income stream. For instance, if you make $50,000 from one income stream (e.g. job) and you lose that job, you are temporarily doomed. Now, let’s say you make $10,000 from 5 different income streams (e.g. own a business, royalties from a book, own some stock and rental properties). If one of those income streams dries up (maybe a fire at one of the properties causes a temporary loss of income) you still have $40,000 coming in.
3 Tips for Earning Money on the Side
1. Do what others don’t want to do. To earn money with passive income, do something for people that they don’t want to do themselves. The example I always like to give is the guy who started the dog poop scooping business. It’s now a multimillion dollar operation!
2. Outsource your work. For every active income source, ask yourself, “Can I have someone else do this, but still get paid for it?” Remember, passive income streams are your ultimate goal.
3. Set your financial goals. Have a target of what the numbers (e.g., revenue, sales, etc.) must be in order to be successful. Just because it’s an income stream, doesn’t necessarily mean it’s a GOOD one. If your passive income streams aren’t helping you achieve your financial goals, then it may be time to let them go, and look for other sources.
For more tips for earning money on the side, read Money and the Law of Attraction – 4 Ways to Attract Wealth.
If you have any thoughts on these examples of passive income, please comment below…
Brandon Wilkins is the co-founder of Financial Freedom Builders LLC, and is available for coaching, workshops and seminars designed to help you take control of your finances.