The Power of Passive Income

What is Passive income?

Must Watch the Video!

This 10-minute story will change your life.

Book link: The Parable of the Pipeline

Passive Income is a long-term investment, just like seeds, when we sow good seeds, we need to be wise with handling the seeds in a good environment and give them time to grow stronger, eventually, we'll reap an abundant harvest. The seeds will non-stop bear more fruits than you could ever imagine.

Passive Income is income that requires minimal labor and time to earn and maintain.

Active Income is physically trading most of your time and labor for money.

A lot of people think that trading your time for money is the only way to make money; however, this is actually not the most leveraged way to go if you wish to have a better quality of life in the future. Even if you work 40 hours a week for 52 weeks the year, the max of income you can possibly make is around 100k-300k, it sounds like very juicy and strong money, but remember that Time is Money, think about how much time you spend to keep this amount of money. 

Work until the age of 65, then can you really have enough money for a happy retirement? Under any circumstances, if you stop working, you get sick or you get older like Bruno (video above), the income will go down right away. This is the risk of Active income.

"The most difficult time comes when we can no longer change times for money middle ages, healthy and other reasons. Then, our income stuck."

 

Passive Income is where you can start getting into a better life because you put money to work for yourself even if you are not physically working.

Passive income is like taking time to build content(asset), and then the content goes on to create income whenever and wherever just like Pablo has been doing the pipeline project (video above). You do the initial work and then the asset which you build works for you forever continually bringing in money even if you are sleeping or on vacation. And your income flow is only getting bigger and bigger without even notice.

What are the choices of Passive income?

Just go to Google and search for the keyword: Passive Income. Find one or two ways that are suitable for your current life, and work on them. There are tons of choices of Passive income you can choose for. The Internet is one of the greatest places to build passive income. For example:

• You Tube
• Network Marketing
• Write a Blog
• Write an E-book
• Affiliate marketing
• Real Estate
• Online Coaching
• Dividends
etc...

Passive income is like taking time to build content(asset), and then the content goes on to create income whenever and wherever just like Pablo has been doing the pipeline project (video above). You do the initial work and then it works for you forever continually bringing in money.

Passive Income is what you should always strive towards if the only income you have is active then you will always be trading your time for money. And if you don't work, income stops, so you are constantly working to keep up with life's expenses. 

If you only work a 9-5 job and you tried so hard to work overtime, then you are making money for 60 hours per week. Outside of those 60 hours of working you don't really have extra energy and the ability to generate more money because we are all human, our body needs to take a good rest. This means you might miss out on weekends to make money. So if you have an online business you can literally make money 24 hours a day, 7 days a week even if you are sleeping. Your internet business is anywhere around the world.

Investment

START INVESTING NOW if you have not yet started no matter where you are in life. A big part of how you can increase your income faster is to invest your money.

Do you know the miracle of compound interest? 

Example 1:

You invest $10,000 in the stock market. The interest rate is set at 8%. You can see that first year you make a total of $10,800.

Compound interest begins to work its magic in the second year. The 8% interest is earned on the new total of $10,800 giving you $864 in interest. The next year, we see $933 in interest as you earn 8% on the prior year’s total of $11,664.

What happens if you extend it even further? in 30 years your $10,000 will be more than $100,000.

Example 2:

You only leave $10,000 in the GIC(Guaranteed Investment Certificate) or savings account.

The interest rate is set at around 2%. After 30 years, your $10,000 only becomes around $20,000.

So which among of money you would like to have? $20,000 or $100,000?

That's how Warren Buffet or any other successful people do because they know the power of compound interest. If they can do it, you can do it as well.

It’s nice to know how compound interest works, however, the first $100k is always hard to generate, that's why the earlier start to invest, the better. It takes time to build an online business and investment, so don't think you start today, and then you can make money right away. Patience and persistence are the keys to generating your wealth.

Brian saved himself 35 years of toiling away at a day job living like this. After working only 13 years, with a modest 7% real return on his investment, he can quit all of his jobs and retire indefinitely on a 4% “safe withdrawal rate” of his nest egg.⁣⁣⁣⁣‎‎

⁣⁣⁣⁣‎‎

Brian is living his best life. He’s more interesting than his peers who blow their paychecks at the bar every week. He’s also happier. It’s not fun to be worried about running out of your paycheck before the next one comes. It’s not fun to be worried about if you’ll ever be able to retire. It’s fun to be young and be able to do whatever you want for the rest of your life. Spend time with your kids, start a business, work on a hobby, volunteer, keep working, or do whatever you want.⁣⁣⁣⁣‎‎

⁣⁣⁣⁣‎‎

It took Brian 13 years. There’s no secret. It’s living below your means and investing early and often.⁣⁣‎‎

Why do we need to start investing at an early age?

Let me give you an example：

When you start investing at the age of 25, saving $100 every month until you are 65 years old, and you put this $100 in an index fund (S&P 500), then you will have a million dollars to use for your golden years. 

However, let's say you wait just for 10 years, which is $1,200 a year, for 10 years that's $12,000, which sounds not that much money. so you start at 35 years old, you have only $300,000 at the age of 65, those 10 years cost you $700,000. This reality sounds pretty crazy, right? This is less than half of what you would have saved if you had started early.

In most countries, people are more reliant on saving accounts, which on average grow less than 1% annually, plus crazy inflation, your money actually is getting smaller.

So don't delay starting investment because, to enjoy your retirement life, the best age to start saving is NOW. 

If you have this simple money mindset in your mind, you will be financially secure.

Try New Things.

Not saying that you have to quit your 9-5 active income because of the active income you earn, you can turn into more principal to an investing platform, like the stock market, to let money work more money for you.

Other than a 9-5 job, pick up something you are passionate about network side hustle, and try them. Do not be afraid of falling, if you fall, that's okay, that will be one more thing you can learn from yourself. It is still worth it. 

You don't need to be good every time, It could work out or not, it doesn't really matter, sometimes just for experimenting or experience, then next time you will do a better job because you learned something from past mistakes. However, if you never try, you will never know where will be your way to success. Learning and education could be what would set you on the road to earning more money. 

" If you can free your time and location, your money is automatically worth 3-10 times as much." - by Timothy Ferriss The 4 Hour Workweek

TAKE ACTION

Are you still like Bruno who directly exchanges his time for money(Active Income)? or do you want to give yourself a worthwhile try like Pablo building and maintaining the pipeline for ongoing income(Passive Income)?

Money doesn't fall from the sky. A big dream without taking action is just wishful thinking. It is a matter of your choice. 

Passive Income is a long-term investment, just like seeds, when we sow good seeds, we'll reap an abundant harvest. The seeds will non-stop bear more fruits than you could ever imagine.

Big advice to all readers, positive cash flow, savings goals, and building your capacity to invest, lets all work smarter, not just harder. 

Don't judge each day by the harvest you reap but by the seeds that you plant.  

Robert Louis Stevenson

 

Matthew 25:14-30

Check out one of my favorite sources of passive income »

Sign in and clap the green button for free. The ⑤ clapping encouragement you press is the motivation for the author to create more articles. Thank you.