CREATE PASSIVE INCOME

In my previous post I shared to you how you can create savings and what you can do with your savings. Just in case you are not able to read the post you can visit them here HOW TO CREATE SAVINGS and WHAT TO DO WITH YOUR SAVINGS.

Though you can do a lot of things with your savings, I am again stressing that it is best to use your saving to acquire assets that can create for you a passive income. This is applicable only if you don’t have a purpose for your savings.

What is passive income by the way?

Passive income as defined by Wikipedia is an income received on a regular basis, with little effort required to maintain it.

Passive income as defined by Investopedia is an earnings an individual derives from a rental property, limited partnership or other enterprise in which he or she is not actively involved.

Passive income then is a kind of income that you can receive on a regular basis and with little effort required to maintain it. The best example of passive income that the majority can relate to is an income coming from the rental of property.

Before we go on further,and for the purpose of information, there are three kinds of income. First is active income, this is the income that we get as a salary from our work. Second is passive income, an income that we had just defined above. And the third is portfolio income; this is the income from investments including dividends, interest, royalties and capital gains.

We will be talking more of passive income in this topic because this is the easiest income that we can create while we are actively involved with our active income. If you are able to purchase a condo unit through your savings and you have it rented then your condo unit is creating a passive income for you. If you are able to buy a piece of land and built townhouses on it and have it rented then that property of yours is creating a passive income for you.

But what if your savings is not enough for you to build another house that you can use for leasing or renting? You can try to purchase a motorized vehicle or electronic equipment and have them to be rented. However if your savings is not enough to buy a brand new one then you can opt for a second hand but be reminded of the risk in buying a second hand equipment or vehicle. That supposed to be asset might be a liability instead.

Is it possible to acquire an asset even if your savings is only a small amount? The answer to that is “YES”. This is so because an asset doesn’t have to be worth millions or hundreds of thousands. All you have to do is to identify a would be asset that you can use to create for you a passive income. Once you identify it, then the next thing to do is to acquire it and presto it will create passive income for you.

Another way of creating a passive income is through direct selling. This is where the MLM “Multi-level Marketing” comes in. You can earn through your direct sales plus some commissions from the sales of your down lines.

There are so many possibilities that anyone can actually create a passive income for themselves. And with the advent of the internet, a wide range of “passive income opportunities” have opened up for everyone. You can choose to write articles and eBooks and sell them through the internet. Blogging and affiliate marketing as well is another way of creating a passive income.

And I do believe that as time goes by, there will be more and more “passive income opportunity” that will open up for all of us. Just be keen to look around, who knows there might have been so much “passive income opportunity” that’s been unnoticed around you.