Are you tired of the daily, weekly, monthly struggle to make ends meet? You love what you do, right? But sometimes it’s just so… hard. It could be time to consider a new form of revenue: passive income. If you’re a business owner, chances are, you’ve heard the term. But do you know what it is or how it could benefit you? Well, this month we’re going to give you all the info you need before jumping in and creating passive income for your business.
Today we’re going to start with the basics. Passive income is defined by the IRS as “net rental income and income from a business in which the taxpayer does not materially participate.” Essentially, it is exactly what it sounds like: income that comes in regularly with minimal to no ongoing effort required. This income could come in many different forms, including rental properties, investments, training videos or books, etc. (we’ll get more into that later this month so be sure and stay tuned).
Now that we’ve established what passive income is, let’s talk about why you need it.
Here are 7 benefits of passive income:
- Get paid to sleep: This is the dream, right? Believe it or not, with a little bit of prep work, you can start waking up every morning to more money on its way to your bank account!
- Unlimited income: If you make $50 per hour, you can make $400 in a normal 8 hour work day. Even if you worked 14 hours every day, your income is limited to $700 per day. The reality is, there are only so many hours in a day and you can only get so much done in each hour. Alternatively, passive income isn’t limited by the hours you’re able to work, meaning that your potential for income is unlimited. Want to earn $1,000 per day? How about $10,000 per day? The sky is the limit!
- More time to do what you want: Consistent income that requires minimal work means that youhave more time to do… well, whatever you want. Whether that means creating even more passive income, traveling, training for a marathon, taking up the guitar, or maybe all of the above!
- Work when you want, where you want: With technology and wireless internet access as widely available as it is now, you no longer need to be tied to your desk for 10 hours every day just to make ends meet. Want to take a break in the middle of the day to go to your daughter’s school performance? Do it! Want to go to Hawaii for a week, work for a couple hours in the hotel and then spend the rest of the day on the beach? Knock yourself out! The world is at your fingertips.
- Added protection: You’ve heard the phrase “Don’t put all your eggs in one basket,” right? What happens if you or a loved one gets sick and you’re forced to take time off? What happens if your spouse gets laid off and you suddenly find yourself the sole provider for your family? There are a million “what if’s” in life and every one of them is another reason to create passive income. Passive income provides protection for the “what if’s” and allows you the flexibility to take time off when needed.
- Provide value for other people: By renting out a house or office space, you provide value for your tenants. By providing a book or online training course, you are helping other people improve themselves. Providing value to others makes them more likely to refer other people to you and it doesn’t have to cost you a ton of time or money to do it.
- It Forces you to be constantly learning and growing: No matter what form of passive income you choose, chances are you will have to learn some new skill or concept before you jump in and start making money. And the learning never stops! Our world is constantly changing and if you want to keep earning that passive income, you have to stay ahead of the game!
Passive income is highly beneficial, professionally and personally. It provides a certain level of financial security and the freedom to do more of the things you want to do whenever and wherever you want!
Next week we’ll dig deeper and talk about how passive income affects your taxes. See you then!
