Passive Income The 4 Types of Income:
Leveraged income means you are now leveraging other people’s time, other people’s talents and other people’s resources. Leveraging other people means you have a business or system in place so that you no longer are just relying on your own time and resources.
Linear and active income mean that for every hour you work you get paid for that hour. You are trading hours for pounds. With 24hours in each day, you are then limited to how much you can earn with your active hours of the day (not sleeping).
Windfall Income is a sudden, unexpected profit or gain. A windfall may occur, for example, from selling a business, selling stocks after making a profit, an inheritance or even winning the lottery.
Then there is Passive Income (also known as residual income):
What is Passive Income?
Simply put, passive income is income you receive on a recurring basis after doing something upfront only once. Doing something once but getting paid forever.
Passive income (also called residual, or recurring income) is income that continues to be generated after the initial effort has been expended. Compare this to what most people focus on earning: linear income, which is “one-shot” compensation or payment in the form of a fee, wage, commission or salary. – Oxford Dictionary.
The beautiful thing about passive income is that once have you set it up you can earn it while you are sleeping, on holiday or playing with your kids on a Friday afternoon.
Passive income comes from assets you have, and assets are either bought with money (e.g., currency, rental property) or in the case of most of the ideas in this book, they are acquired through sweat and work upfront, for example, music royalties, after releasing a song or the writing and self-publishing of a book. This book is not a get rich quick book. I believe you have to work hard in anything for it to be a success. It may take a while for passive income to become a stream for you. Keep persevering and know that eventually those drips will become a stream and in some cases flow into a river. Building a passive/residual income portfolio and having multiple income streams allows you to work hard once and then see the fruit of your labour without planting the seed again and again.
All of these passive income streams require at least one of the following two elements:
1) An upfront monetary investment
2) An upfront time investment
You cannot earn residual income without being willing to provide at least one of these two elements.
Please don’t be the shiny object guy or girl, stop chasing everything that comes your way. Be truthful with yourself in the tools you need and the people you have around you. It may feel productive but it’s not, and you will build many houses and finishing none.
In this game, you have to have a depth of field, to see beyond what is in focus. Think long term. With a depth of field in mind, take 1 minute to close your eyes and picture an acorn.
What do you see?
Many people will say they see a tree from where the acorn fell from, themselves holding an acorn or just a forest where the acorn lay after it landed.
I’ll tell you what I see. I see the same tree, but I then see the forest, that the tree came from, I then see the multitude of houses built from the wood from those trees. I then take it further, and I see a city and the communities built from those houses. I then see a civilization and great masses of people living their dreams and contributing to society. I see this, all from just one acorn.
It can be incredibly tempting to pick out three or more passive income ideas to get started with, but I would encourage you to pick one in the beginning. You need time and the ability to focus on cultivating and growing a passive income stream. You must master one thing before moving on to another.
It is going to take a substantial amount of time and/or money in the beginning but earning passive income is the best thing that can happen to you and you can choose if you wish to work from home.
If you would like to learn more about passive income and source of passive income, how to make extra money online and indeed how it can change your life. See our number one recommended book “30 passive Income Ideas” and subscribe to our weekly podcast channel for residual income ideas, tips, advice and strategies.