The power of passive income
I would like to talk about what it means to generate lots of money in your spare time. For the average employee this idea seems absurd. You work hard all day for the money you earn – who am I to say you can make more money by putting in less time?
The reason is this: the techniques for making money online work differently than making money as an employee. It follows a different set of rules. It is a different kind of game.
I spent about 25 years of my life as an employee. At some point I felt that there has to be a better way to earn a living. I was tired of working, tired of not having enough money, and tired of someone else deciding how much time I have to put in and how much I can earn.
So I did some research.
One of the first ideas I learned about was the difference between an asset and liability (I got this from Robert Kiyosaki’s classic book Rich Dad, Poor Dad I highly recommend it if you are interested in changing how you make money). An asset is something that pays you and a liability is something that costs you. For example, if you have money invested in a savings account that gives you interest – that is an asset. If you lease a car that you make monthly payments on – that is a liability.
The goal is to get more assets. There are many different kinds of assets – such as stocks and bonds, real estate, intellectual property like a copyright or patent, or an online business.
It is important to note that an asset makes you money without you actually putting in any effort – at least not after you put in the effort to acquire or create the asset in the first place. This kind of income is called passive or residual income. It is the development of one ore more passive income streams that will ultimately set you free financially.
With the right techniques and strategies, the internet is ideally suited to creating passive income – and creating it in your spare time. They say the internet levels the playing field and this could not be truer. Building an online business requires that you invest almost no money and yet has the potential to generate huge amounts of cash. To build up such an online asset just requires the right knowledge and consistent effort.
Once you are making enough passive income from your part time online business that covers your current income, you are financially free – it is up to you how you spend your time. You can quit your job and put more time into your online business to generate even more money. You can keep working at your current pace to keep growing as you have been, or you can back off your efforts and just maintain your business as it is – it’s up to you.
Compare an online business to buying, say, a fast food franchise. You need a huge amount of money up front – typically at least a half million dollars and often more. You then need to work at it full time for a long time before you pay off the loan you took to buy it in the first place. It is risky and takes a long time before it becomes an asset and there is still no guarantee that you will ever be able to put in less time.
When you consider these kinds of risks and expenses a few dollars in web hosting and a few dollars to learn the necessary skills is nothing compared to what you have to do for other types of businesses.
The possibility of making money online part time is very real. What is important is that you start, commit to the process, learn the techniques, and work at it consistently on an ongoing basis. If you follow these steps then one day you can be financially free.