Beginner passive income, what’s it all about? Like many of us, I was first really turned on to this idea of passive income by Terry Johnson. And I found this whole idea intoxicating. The idea that people could just travel the world learning to tango and staying on private islands. While money just keep accumulating in their bank accounts seemed like some strange fiction , isn’t how people actually live?
Let’s find out
Well, no. That kind of lifestyle is a pipe dream, and is for a good reason. Understand that setting up passive income will take work, constant reinvention and maintenance. But you’ll get to that. Most people who set up this passive income don’t do it so they could lay on a beach all day. The point of beginner passive income is to liberate your time for more fruitful endeavors. If you have this ambition and gall to take yourself out of the 9 to 5 game and set up passive income.
Believe me, there are chances that you won’t be happy just sitting on your butt or traveling year round. Certainly you’ll love to do something with meaning and purpose. For many, it can be learning and writing a series of books, which they’re truly passionate about. For you, it might be to spend time with your kids and not having to take overtime when it’s offered to you. In any case, your goal will be to spend as little time as possible to cover your basic needs.
In very this article, “beginner passive income: …be guided”, we will consider those things that you need to know. That will help guide you when created passive income streams for upcoming year.
Table of contents
- Earn money where value is created & exchanged
- You’re valuable
- People create value
- Passive income ideas for beginner
- What passive income is not
- Avoid these grumblings about passive income for beginners
Earn money where value is created & exchanged
Where “value” is defined as benefit that’s when people are willing to pay to receive. This seems really basic, right? But the problem is many people don’t seem to get this basic step. Any time anyone is making money in any way, just know that value has been created and exchanged at the same time. In a way, we all are value-creating assets. That’s how we make money. Trust me nothing is wrong with it. The only problem is how most of us will create this value.
Understand that I hold nothing against them but nearly every “9 to 5″ worker is a service worker. And this definition of service means a commodity where the value is created and also consumed at the same time, for instance, massages. They will create value , inputting buying orders, serving their customers, managing employees for an organization or employer. The employer then will consume these services simultaneously.
Recently, I realized that by definition, a company will only hire you if they will sell the value you create for more than it will cost them to obtain. In a way, meaning that any time you get employed, you’re just getting a raw deal. The question, how can I create passive income. Because we all want it! That’s only way to escape the rat race and build true generational wealth! How do we then build wealth without spending every moment of our lives working for others.
You’re valuable
Believe me, you are valuable. Your time, work, knowledge, experience, and output, trust all these are all valuable. In fact, your employer or your customers, if you’re an entrepreneur, probably pay enough money to rent these values from you. The problem here, whether you’re an artist, a doctor, a lawyer, an engineer, or even a baker, the value you create is consumed once . Then it’s gone! Meaning you can only sell a loaf of bread once. As a doctor, you can only sell each open heart surgery to one client. Once the value trades hands, it belongs to the customer and you get paid once.
As we’ll see, one of the major tenets to passive income is to break this kind of relationship. You have to create value that will be amortized and repeatedly sold, rented, or even traded again and again.
People create value
You need to know this that at some point in every value chain, value has to be created by people. However, who is saying that a human has to deliver this value? We know that some smart people put in the energy to create Google, but they don’t have to do any work again to deliver value to you. Your landlord put in enough work to afford the apartment you live in, remodel it, and even to find you as his tenant. But now, there’s no need to do any work to deliver value to you again. Every morning you wake up in the apartment whether or not he works.
Types of value
Selling value
Probably the word “selling” doesn’t really need much explanation. But it’s where value is transfered one time in exchange for cash. Heart surgery, baguettes, and designer jeans are ways to sell your value. Probably this one would be the least optimal of all, at least for your passive income. This is because once you sell a normal commodity or service, you won’t re-sell it again.
Let’s consider exception to this: software or digital products may be duplicated with a low marginal cost. And technically they can be sold advantageously over and over again. This is the major reason why Microsoft is where it is today.
Renting value
What you do when you go to work every day is renting value. This is a way to adhere to the rule against one-time consumption, though you may only rent something to one person at a time.
Create secondary value
Understand that the mechanics of selling and renting are the exact same, the difference is with this secondary value. You will be creating another form of value, and you may or may not even charge to exchange both forms of value.
That’s confusing right, so let’s take this simple scenario. I create a free book, and then give away the value (information) to people at no charge. By doing that, I’ve just ended up creating a powerful form of secondary value. That’s the attention of my readers. Finally I rent this same value out to advertisers, who will consume it regularly. If this advertiser leaves and I get a new one. Here’s the point, the fact that the other advertiser was able to consumed the value before, will be of little or no concern to the new consumer.
Passive income ideas for beginner
Build a blog that will generate regular and consistent revenue
Another perfect place to start generating passive income, is to build your own blog and this is another way to grow your wealth. Though the setup process will be extensive as you will need to build your site and create the content. With this, you will be able to monetize your blog by setting up advertising programs, charging membership fees. As well as selling your digital products and taking due advantage of affiliate marketing programs. The more effort you are able to put into your blog, the more money you will be able to make as it grows.
With your knowledge on beginner passive income will offers you the opportunity to make much more money without the continued effort that a job will require. However, If you want to start building more passive income streams for yourself. Use the ideas listed above to know what options you will have at your disposal and how you will get started.
Learn about alternative investment possibilities
A passive income stream is an earning opportunity that will require an initial investment of your time or money. Once you are able to establish that stream, it will continue to generate income without requiring you to be actively working for it.
Simply put, active income is income that you have to work for while passive income is earned over time without any additional effort from you. This allows you to grow your wealth without overexerting yourself in the process.
Today’s world will offer you many ways to generate passive income. One great way to start is to look into alternative investment ideas that might not be mentioned frequently on the internet. These alternative investments will include items such as art, marine property, and real estate, e.t.c. By placing your money into these kinds of investments, you will earn a substantial amount of interest over time. Of course, many will wonder where the first step will begin in making these types of investments.
Create and make your own online courses and digital products
Some passive income streams requires an investment of time instead of money. Take, for instance, online courses and digital products. While these kinds of digital products requires a lot of work to be able to get them set up. They will continue to bring in revenue as interested customers buy them. Probably you’re someone who has valuable knowledge to give out, has the necessary marketing skills to successfully advertise your products. And has the time to get these products set up, you may easily start building a passive income stream using just online information products.
What passive income is not
Your job
Obviously. This whole idea of beginner passive income is to supplement, augment or even get you out of that your job. So you will be able to retire, travel or spend quality time with loved ones.
Side hustles
Side hustles are one of the great ways to make money, but believe me not all side hustles are passive. They are basically active, and probably with systemization, they could still turn into passive income streams. If you have to continually invest the same or even more amount of time for the same amount of financial output, just know that the venture is not passive. However, you need to be careful here, in the beginning, a passive income stream could require more of your time, money or work than it will produce.
Consulting
Consulting is just another job, that’s just perfect for a side hustle, but not exactly passive. For consulting to be passive, you’ll build the practice with other people, and be able to step aside from the work eventually.
How to start building beginner passive income
There’s no magic trick whatsoever that will turn your time directly into money. Instead, you will plant seeds so your money will be able to grow, even when asleep or at the park walking your pet.
Start building your saving
To create passive income you will need time, money or skills. Let’s start with your money. Open a high interest savings account and put $100 dollars in it. Boom, you will discover, you made passive income! It might not be much, but you earned interest on the money.
Assess your skills
You need to figure out how you could use your skills to create great content online. That you could make money with your blog over time. And this is why you need a website.
Questions, you will need to answer yourself: What are you good at? What are you so passionate about? Relax, take a quick inventory, and research the ways others have been able to use the same skills to build income streams.
Assess your time, money and effort.
Time is a very tricky one, because it’s the most limited resource. Trying to make more money or even create passive income might be a trap because it basically will require you to learn new topics or even new skills.
Are you fully committed to this? Does you current work, family and social activities eat up your time. If you don’t have much time, you’ll have to lean more towards investing or even getting someone to do the work for you.
Ideate and choose
The final step is for you to put some ideas down on paper and choose how to start.
Avoid these grumblings about passive income for beginners
It means doing things you hate for money, just like your normal work
Not really. It means doing what you love doing, being passionate about it. Probably you love working on apps to help small businesses. Sure, it might not be as sexy as running a full time startup with dozens of employees, but that’s not the point actually. The point is to make enough money in order to take risks and do what you want.
You get bored if you don’t work
Actually yeah, true me tis is the best criticism to date. You will get bored, and sometimes you lose motivation. That’s the more reason passive income won’t be a replacement for active income.
Many opportunities will disappear within a year or even two, competition will just come in and kill you if you’re not vigilant enough. That’s why you need to be updating yourself and everything around every year or two. That’s why you need to keep improving. Don’t stop! So, keep creating new strategies and new income channels.
You won’t be build a successful company or a loyal following without hard work
Who really cares? You don’t bother yourself one bit about building a successful company with most of your passive projects. That can be for your active projects. For your passive income, you can build products and automated services that will be useful enough that people want to buy and use them. Meaning you can have fun, get more fulfillment, and still make more money out of other passive activities. So, you don’t really have to care if your passive businesses are small and nichey.
Not all passive ideas work.
Probably your ebook is not generating much interest as you have hoped . But you can try it again in the near future. Not all passive ideas often work. With your first attempt you will learn a lot, which will prepare you to put out your #1 bestselling book a year later.
I don’t have value that’s sellable
Believe me, that’s bullshit. For the single reason for being employed, trust me, you have marketable value. It might be a low value, that’s if you’re flipping burgers, but you can still create value somehow. I don’t really care if you have to start by renting the parking spot in front of your apartment. You will find, create, or buy something valuable worth repeatedly, just by selling or renting.
A free idea: Many people want to play with 3D printers. Bring together five of your friends and buy one. Set up a website and also a listing in the local paper. Charge $40/h for printing. Also set up a system that will verify if payment has been submitted and then prints out the film automatically that have been emailed to you. Split the earnings with your friends. Boom! You have created a passive income for yourself and for your friends. From there you will expand into other things.
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