Passive income is something that people are often chasing after within their investments and personal lives. Building passive income streams is often more time-consuming than people realize, and yet the benefits are magnificent for those who are able to achieve it. Nothing is ever truly “passive” on the hunt after this type of earnings, but with enough time and a strategy for success that makes sense and can be replicated over the long run, creating the conditions for continuous income that requires no additional input of time, energy, or money can truly be achieved.
With this guide, learning how to build a passive income machine that fits your needs, approach, and lifestyle will be explained. Read on to discover how you can generate streamlined income that supplements your hard-earned salary today.
Passive income requires “startup capital” of some sort: Choose wisely.
Anything that earns money will require an input of time, money, or energy. You earn a salary based on the energy you spend over time commuting to your place of work (or working from home through the coronavirus pandemic for millions of employees). Similarly, your investments earn money on the capital that you’ve introduced into the market. If you were to withdraw these funds, you’d lose the earning capacity that your investments afford you.
Passive income seeks to crystallize the earning cycle without the introduction of new capital or energy inputs, building income off of the foundation that you’ve already built. Many investors chase after dividend-earning stocks and real estate options for this reason. One great way to build passive earnings is through real estate opportunities. Real estate builds consistent wealth over the long run for owners, and as a commodity asset, it can be leveraged in a variety of different ways to great effect. With the help of a realtor, broker, or other real estates professional or real estate agent within the property market, you can target foreclosures and other discounted homes that can be transformed into monthly rental income that will pay for the entirety or the majority of the mortgage loan (or your “costs” relating to the real estate deal).
Real estate is prized for this reason, and many savvy investors love the flexibility and staying power that property holdings provide for them as they continue on their quest to build a passive earnings stream (as property owners, real estate investors, homeowners, and stock buyers) that requires little to no additional effort. While landlords often play an active role in the management of the properties they own, with a high-profit margin on a great strategic property, you may just find that you’re able to hire a manager at no out of pocket expense (beyond the earnings that the property generates on its own), making the transaction truly a passive earner.
Building toward financial freedom is a long, but worthwhile road.
Investors who are hoping to transform their lifestyle often wonder about financial freedom and the difference from simple independence within the financial world. A quick search for “financial freedom meaning” might bring you a variety of answers that sound a lot like these are interchangeable concepts. But true financial freedom is the power to finance your ideal lifestyle without having to continue to slave away at a nine-to-five job that you may or may not enjoy. The freedom to live off the passive income that you are generating through your dividend income, rental property earnings, and more can provide you with an enhanced lifestyle that so many people dream of, yet never achieve for themselves.
Focusing on building streams of income that are not reliant on your continuous input is the fastest and truly only way to build toward this brighter future. This will take a massive effort on your part over the short term, yet over time, the burden becomes almost nonexistent, and your income generators will support themselves, earning your financial freedom in the process.