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What is passive income and how can I start generating it?

“Passive income provides financial flexibility and freedom.”

With the world’s current precarious financial situation, we are all trying to get by any way we can. It’s the age of influencer income, side hustles, and the gig economy — and sometimes it feels a little overwhelming. The 9 a.m. to 5 a.m. schedule is already demanding enough (a four-day work week look at Alright right away). Do we really need to add work outside of normal working hours?

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Unfortunately, there is no general answer. When it comes to finances, everyone’s situation is different and we all need to do what’s best for us. That said, there are several ways to generate liabilities income outside of 9 a.m. to 5 p.m. Below, the founder of Ladies Financial ClubMolly Benjamin, explains passive income and gives her best tips for earning that extra money.

For those who don’t know, what exactly is passive income?

Passive income is money generated that requires relatively little daily attention once you’ve made the initial investment to set it up. Unlike active income, which is earned through traditional employment or work that requires ongoing effort and time, passive income provides financial flexibility and freedom by allowing you to earn money with minimal expense. effort to maintain it.

A good example is to think about the difference between rent and salary! There is an initial investment to set up the property and then once rented it requires little maintenance to earn an income. Compare… (that) to salaries, which require showing up every day to earn that money.

How can we start generating it?

(First) To set yourself up for success, identify your passive income goals. Determine your financial goals and the amount of passive income you want to generate. Having clear goals will help you stay motivated and focused. Explain very clearly why you want to generate passive income, because this will be your main source of… motivation to continue and get there!

Create a budget. Create a budget to track your income and expenses. This will help you identify how much you need to invest in your passive income business (to start it). This will also help hold you accountable to ensure you don’t overspend and help you understand your benefits when the money starts coming in!

(My next tip is to) reflect success. Continuously educate yourself about the different passive income opportunities, learning from those who have already done it successfully! You don’t have to blaze the trail yourself. Follow in the footsteps of those who must already accelerate your success!

Be patient and persistent. Building significant passive income takes time. Be patient, stick to your plan, and remember why you’re doing it to stay motivated. (And make sure to) monitor and adjust. Review your results regularly! If this isn’t meeting your goals, it’s time to pivot. Adjust your strategy as necessary to continue increasing your results until you reach your goals!

Can you give some examples of effective ways to earn passive income?

Invest in stocks and dividends: Invest in dividend-paying stocks or index funds that regularly distribute dividends to shareholders.
Real estate: You’ll need to purchase, prepare and manage a property, but once the initial setup is done…it can provide you with consistent, predictable income.
Digital products: Develop and sell digital products online like eBooks, online courses, stock photography, workshops, designs and more. If you’d like to learn how to start a side hustle like this, join the waitlist for our Side Hustle Kickstarter program. here!
Create a blog or YouTube channel: Create a blog or YouTube channel around something you’re passionate about and monetize it! You can do this through advertisements, affiliate marketing, sponsorships and much more.
Affiliate Marketing: Affiliate marketing is when you share and recommend products to others through your own channels and earn a commission every time someone buys the product. Popular ways to share affiliate links include social media, websites (and) email newsletters.

Royalties from creative work: If you’re an author, musician, or artist, royalties from your creative work can be a source of passive income.
Rent your parking and/or car: If you have space to park a car on your property that you are not using, you can take advantage of it by renting it out to others. Some may want to park their car to or from work, or for a longer period of time. You can also offer to rent your own car via Uber Car Share!
Rent a room : Instead of buying and renting a house, you can start small by renting out one of your rooms. This could be a short-term rental (like Airbnb), or even a space where someone can store their items (people are always looking for extra storage space!).
Open a high interest savings account: By depositing money into this account, you earn interest over time without any additional effort. This interest is essentially “free money” that accumulates as your savings grow with a safe, low-risk option for beginners to start earning an income.
Be a micro-influencer: Micro-influencers are everyday people with a small number of social media followers (usually between 1,000 and 50,000 followers) who have the ability to influence their followers’ purchasing decisions. Micro-influencers often have a very engaged and loyal following, making them ideal for promoting products or services.

What should you be wary of?

“Set it and forget it”

Although they are less work than a regular job, they sometimes need a little attention. Passive income often requires some initial effort, investment, or ongoing monitoring. While it may take less time than traditional labor, it’s not entirely hands-off. So be prepared to go all out from the start, to reap the rewards later.

“Quick and easy money”

It’s more like a slow-cooked meal than fast food. It takes time to prepare for these gains! Creating sustainable passive income streams takes time and perseverance. This is not a get-rich-quick scheme. So make sure you know WHY you are doing it to stay motivated throughout the journey.

“No skills required”

Many passive income opportunities require skills, such as investing, content creation, or marketing, to be successful. So be open to learning!

“Money Guarantee”

Passive income sources can be unpredictable, subject to market fluctuations or changes in demand, so they are not always guaranteed (but your efforts to achieve them can be!).

“No tax worries”

The IRS might still come knocking, so keep an eye on that. Depending on your location and the source of passive income, you may still have tax obligations. It is best to speak to an accountant to prepare accordingly.

To learn more about passive income, visit here.

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