One of my most favourite things in the universe! Have you heard the term before?
Passive income is a type of income that requires minimal effort to earn and generate. Common passive income streams include:
- Ad Revenue
The keyword being minimal effort, not no effort. You may be looking for ways to generate money for free, with no work or sacrifice, and although passive income can become VERY low effort, it usually does require abit of hard work to get it all started, and it’s usually in small amounts (so don’t get sucked into any scammy marketing hype about making 6 figures a month while you sleep – if it was that good, then why on earth are they telling everyone about it?)
Don’t save what is left after spending, spend what is left after saving
My very first passive income payment was $1.21. I thought it was rather insulting considering how much hard work and effort I put into saving for that whole month, but I kept it up… and now, over 10 years later, Mrs. MoneyPlant and I average around $2,000 a month in passive income from dividends ($65 a day), give or take.
How did we do it?
It’s actually quite simple and… anti-climatic ?. We focused on increasing our income, spent less then we earned, saved the difference, and invested into income-producing assets, such as shares, and ourselves.
Take it from someone who’s walked the path (and still walking) saving and investing does requires hardwork, sacrifice and perseverance, but eventually.. it starts to pay off and truly does become ‘Passive’.
How can you do it?
Exactly the same way as us!
- Focus on increasing your income
- Lower your expenses
- Save the difference in a savings account
- Keep saving until you have 3 months of expenses
we call this the ‘buffer zone’ and it allows you to sleep peacefully at night.
Onwards and Upwards
Are you generating passive income? If so I’d love to know what it is and how much effort it’s taken to start (and to maintain). I was on on Facebook the other day and saw this same question asked and one of the replies that was really funny was ‘Become a photographer’ which I thought was hilarious as that is definitely NOT passive income, so don’t be that guy ? Aim to invest in assets that generate income, or appreciate in value over time without you having to work your butt off to make it happen (Savings Accounts, Dividends, Property? etc)
Let me know in the comments!