One way of achieving financial freedom is to have a passive income, but what is the meaning of passive income?
Passive income is defined as being an income that is received regularly, but with very little effort needed to sustain it. Some examples of passive income are pensions, royalties, payments for rented property, interest and dividends on securities, income from advertisements on websites and repeated regular income from other sources.
Clearly in most cases some sort of investment has to be made initially in order to initiate the process of passive income, and we will investigate some methods to create passive income. It is important to understand the difference between the above types of passive income and a recurring income. As an illustration of the latter, let us suppose that you are the owner of a flower shop, and you have a contract to deliver a display of flowers to an hotel every Monday.
Clearly this is a recurring income, but it in no way can it be considered passive, since it places an obligation on you that involves work. If the same situation occurred but you had a manager to run the flower shop, then the whole of the running profits of the shop could be considered a passive income.
One of the easiest and certainly the most popular ways of generating a passive income is through the Internet. There are a number of ways of doing this, and there are numerous websites that give you instructions as to how to go about it. The secret is to develop and market the site to such an extent that it is drawing in plenty of web traffic. By including a source of income such as Google Adsense to the site you will have your source of income.
However, if the website gets no traffic there will be no passive income. Another way how to create passive income from the Internet is to have an e-commerce website – this is a site that actually sells a product or a number of products online.
Most of the different methods of creating passive income are going to involve some sort of effort being injected initially. You cannot pick up royalties from a book or a song without first writing it. Similarly you can’t expect to get income in the form of rent for a property unless you first own the property, and that takes money that has to first be earned and put aside.
In the Passive Income seminars run by Work Your Wealth you will learn how it is possible to start on a passive income generating system straight away, in spite of your current financial position.
Anyone can do this – financial freedom is within anyone’s reach, you just need to be pointed in the right direction.