A vast majority of us aspires to become Millionaire or Billionaire in our lifetime, or at least wishes to acquire a financial freedom and security from the current bottle neck economic situations. You are totally different and unique from rest of the others, that’s the reason why you have come up on this article. You love to dream big, make plans and takes 100% responsibility to implement that plans for achieving the goals (Free Tip: Dreams once planned turns to goal!)Robert T. Kiyosaki is one of the most visionary authors in regards to Personal Finance, Passive Income and Business Investments.
He is also a renowned Entrepreneur and a successful Investor. He, in one of his best seller Rich Dad Poor Dad quotes “The poor and middle class work for money while the rich have money work for them.”If you have not still read the book make sure to click Rich Dad Poor Dad.
Do you work for making money, or do you work for gaining financial freedom? Well, most of us belongs to a mediocre social and family circumstances. Our parents and society has wired our brains in the particular belief to get in a decent college, acquire a good job and then lastly settle well in life. What most of us misses here is that being employed for a 9 to 5 job will surely get your bills paid but it won’t do us any good in long run. Some of you, who have already started their career, might have now noticed that at the end of the each month you are left with a near zero bank balance.
You would also have noticed the same with your parents ending up in retirement with not much left at their disposal.So what must you do to get out of this never ending rat race? The answer is quite simple. You must effectively generate other modes of passive income sources which are self-sustainable and impregnable. You must find your reliable passive income sources based on one’s passion and profession which will ease you during financial hiccups and make you feel relieved in your day to day life.
The real pursuit of life’s happiness lies in gaining financial freedom rather than in making money.If you don’t know what you must do to generate passive income sources don’t worry, read this article till the end and feel free to comment below all your queries or suggestion.So let’s begin with basics,What is an Income? Income is a monetary advantage gained by an individual or a business institution in exchange for the goods or services they provided or for the capital they invested. Income is generally used by the acquirer for funding the everyday expenses. Most of the income are subjected to taxation. (Income not subjected to taxation.
)Income is generally classified into two categories:1. Active Income2. Passive Income What is an Active Income? Active income is an income where you are paid for the work you do. This can include commissions, tips, salaries, wages or the monetary payment you earned from a business where you have an active participation. For example, Sam is professionally a doctor, he gets paid only if he actively provides his service to the patients i.e. treat and cure them from their conditions.
The day he takes off from his jobs or goes out for a vacation with his family he doesn’t earns a single penny.Thus, the income generated from one’s active involvement of physical or mental aspects includes in active income. Money one generates from completions of specified task/projects or by working in 9 to 5 jobs is an active income.What is Passive Income? The income generated from the sources which requires minimal or no efforts from the recipient is called passive income. It is also where you get paid over & over again for the work that you did only ‘once’.
The decisive factor to note here is, passive income sources requires an considerable amount of upfront work or monetary investment and proper nurturing in the initial phases of its development. For example, James is a retiring federal employee, he invested his retirement funds in the stocks of XYZ Private Limited. This industry provides high quarterly dividend to all its investors.
Thus, James for rest of his life gets paid in the form of dividend without any regular effort put into it.The alternative example for passive income is ‘Royalty’. The amount paid by the publisher to the creator of art or copyright holder in the form of money for each of his work being sold is called royalty.
J.K Rowling, the author of Harry Potter series, gets paid for her each book being sold worldwide for the rest of her life. The main difference between active and passive income lies in the financial freedom, passive income offers over active income. What is the importance of Passive Income?#1 Passive Income gives you the Freedom of Time: Time is the greatest wealth one can possess. Time is invaluable. Our own existence is measured in terms of time. We grew up in time, lives in time and perishes in time. As for the saying goes “Time and Tide waits for none”, unless you are an aspiring scientist who dreams to devise a time machine.
If you are then comment below, I wouldn’t want to lose such a golden opportunity to relive all my best moments in life. So time is utterly precious. In a life of 9 to 5 rat race, you won’t be getting much quality time to spend on your passion or with your family and friendly. But with multiple passive income sources you become financially free to do your will. This can ease you at work, reduce stress and fright of future and can provide ample amount of time at your disposal.This is the power of passive income.#2 Passive Income provides stability and steady financial growth in life: We are living in ever changing world. Here the most uncertain are likely to happen.
With the rapid growth in technological field and tremendous transformation in world markets; loss of job, high inflation, huge market depression are quite unpredictable. Security in job and stability in life have become invaluable assets in current scenario.Just imagine for a while, every month some random stranger pays for all your bills, your child education and still leaves behind some credits into your bank balance with the payment you earned from the active income source. Whoa! Just imagining this sends a chill down my spine. This could be a crucial crunchy point in your life, won’t it be?Yes, this is what actually happens it everyone who adapts to the evolutionary way of earning passive income. Once financial independency and stability comes to play, then it’s just a matter of time for you to envision exponential growth in life.
So, now if you are all geared up mentally to be millionaire or even a billionaire then here are the top 10 ways to generate passive income.