“When are you going to get a ‘real’ job?” is a question I get asked repeatedly at family gatherings. Most of my family doesn’t understand the true power of passive income. My uncle, on the other hand, has been living his dream for decades because of it. In the late 80’s and early 90’s, my uncle bought up as many cheap houses as he could get his hands on. He had to get loans from the bank and maxed out his credit cards. Now, he has all that debt paid off and is getting paychecks every month from the tenants who live in those houses. He hasn’t worked in years. When he needs a lot of money quickly, he just sells one of his houses which is worth 3X more than when he bought it. That’s the power of passive income.
24 Hour Income Source
The best part about online passive income is that you don’t need to be present to get paid. For example, imagine that you own an ice cream shop in a cute little tourist town. In order to make money, you need to sell ice cream and you can’t sell ice cream unless your shop is open. Not only do you have to be open to sell the ice cream but you also need to buy large quantities of ice cream to sell and store it in a freezer. You also need someone to run the shop when it is open which means either paying employees or working in the shop yourself. After the store closes, there is more work to be done – accounting, purchasing, cleaning, etc. Before you know it, you’ll be working 80 hours a week without seeing an extra dime. Owning a business doesn’t sound like much fun now, does it?
Now imagine that you wrote a book titled, “101 Best Ice Cream Recipes”. Let’s say that you typed this book out on your computer and formatted it into an eBook. You started a website about fun summertime treats and you start selling your book on the site. Your eBook will sell any time, day or night, because your website will be available 24/7. You won’t have any inventory to buy and thousands of people can visit your website whenever they want. Once your website is up and running, you really don’t need to be there anymore which means you can sit back and relax while the money rolls in.
Which would you choose – a physical store with limited hours, lots of work and a bunch of extra expenses or a website that costs practically nothing and pretty much runs itself?
Using Passive Income to Change Your Life
Passive income allows you to live your life the way you want to live it. According to Timothy Ferris, author of The 4-Hour work Week: Escape 9-5, Live Anywhere, and Join the New Rich, you have the ability to design your life and passive income can help you do that.
Think about your current life. Do you love your job? Do like going into an office every day for 40 hours a week? When you imagine your perfect life, what would it look like? Is it similar to what you are doing now or totally different?
Let’s say you get paid $500 a week and you work 40 hours a week. Your boss requires you to be at the office from 9-5, Monday-Friday. If you take a day off, either you won’t be paid for it or you have to use a personal/vacation/sick day. Now let’s say you worked on a website for 80 hours a week over a period of 2 weeks. Your website is now paying out $300 a week but you don’t have to do any more work on it.
Which one would you choose:
40 hrs/week = 2080 hrs/yr = $26,000/yr or $12.50/hr
80 hours of work = $15,600/yr or $195/hr – over time, this number gets bigger!
The best part about passive income is that you don’t even need to quit your job to start generating it. You can spend an hour or two before or after work creating a website, writing an ebook or filming a YouTube video. Before you know it, you’ll be able to quit your job and live the life you want to live and not the life your boss wants you to live.
Your Turn
I would love to hear from you in the comments below. Are you excited about earning a passive income online (or offline)? What is your ideal lifestyle and how do you plan to achieve that lifestyle? When it comes to earning an income online, is there anything holding you back?