Wanna make money while you sleep? Wanna be able to pack up at will and travel around the world while still earning a steady stream of income? Wanna retire early...real early?
Passive income, letting your money work for you instead of you working for your money, can give you the financial freedom that will allow you to focus on what is most important in your life and less on the drudgery of "work". Here are a handful of ways to earn passive income:
- Real estate rentals. Having a steady stream of income from property that you rent out--this could be a house, an apartment, a duplex, a storage shed, farm land, etc.--can give you a nice monthly income.
- Residuals. If you write a book, syndicate a column, record an album, or act in a movie or TV show, you have the ability to earn a bit of residual income every time the album is sold or the sitcom is aired.
- Dividends and interest. Any solid financial investment ranging from leaving a hunk of money in an interest-bearing savings account to investing in the stock market to putting money into a certificate of deposit, has the possibility of earning you a tidy sum, depending of course on the amount of money invested and market factors.
- Low maintenance businesses with a partner--you provide the funds and the partner provides the work. Obviously you would need a partner you trust and a fairly good knowledge of the business whether it be a web-based business, a candy machine route, or a some other type of simple business (larger businesses such as a construction firm or a store would require too much hands-on work on your part).
No matter which route you choose to go, or if you decide to try all of the above, it is imperative to study all facets of the endeavour and have a thorough understanding of the ins and outs of your project. As a side note, be sure to keep up on the tax part of your business and never get into credit debt as that would be the exact opposite (passive outgo instead of passive income) of what you are trying to accomplish.