All Things Pondered Here

Pondering Many Things....

passive income

Become Debt Free NOW!

by

What Do They Really Have To Offer?

That seems to be the catch phrase of a lot of companies that want to give you financial advice, doesn’t it?  (Become debt free NOW).

Let us focus on this for just a moment.  The question becomes:  What kind of fancy advice or service can they really give you?

Debt is a widespread problem.   And it requires just a little bit of thought – not too much – just a little.

Basically it comes down to this – You have to spend less than you earn.  Use your monthly surplus to 1. pay down any debts. 2. Save money.

Rinse – Wash – and Repeat until you achieve any financial goal you happen to be after.

Not Enough To Reach Your Goals?

The other laughable thing about much of the financial advice you can pay for is that whatever scheme or plan they come up with, execution still depends on your financial abilities.

What if you have a goal that is beyond your ability to reach with your current source of income no matter how frugal you become?

If that is the case, you will want to develop new revenue streams.

Here are some ideas:

1. Start a business. It is not an easy thing to do and it IS hard work. BUT, there is potential there – if you can get it going.

Momentum is the key. You have to develop momentum. That is forward motion in simple terms. Getting a big rock to roll takes a LOT of effort. But once it gets rolling it can really go – feeding on its own motion.

Getting started is the hard part. Don’t fool yourself though. If the money coming in does not exceed the money going out, then you have a liability and not a business.

Do not quit your day job until / if your business reaches the point where you make many times the income that your day job provides. Only then MIGHT it be safe…

2. Passive income such as Real Estate, publishing books or music and no doubt a variety of other similar concepts can work to provide additional revenue.

By the way, publishing can feed upon itself and generate momentum. A good example would be writing a book that develops an audience. This would be a group that is hungry for your next book. Once you have a large enough audience, you just keep on writing and additional revenue comes in. Without the audience – not so much!

3. A second job? – No one likes the idea of taking on a second job. But if it can get you over the hump to where you get your debts paid off and can actually start saving, it might be a good solution. In college I would work several part time jobs just to keep things going. But, this is not for everyone.

Overall Lesson: Bring in more than you spend.

Additional problem to overcome: Money loses its value over time.

Disclaimer. I’m not giving financial advice here, find a professional for that.  I’m just sharing my thoughts!

Comments are open on this post


About The Author

Google

What Is Passive Income?

by

Many people are interested in developing passive income. However, I think the term ‘passive’ is both a misnomer (a false name) and a relative term.

For example, a type of income that people often refer to as ‘passive’ is rental property income.

This is where passive is a misnomer. If you have enough rental property income to pay your bills then you also have a lot of management responsibility.

1. Someone needs to take care of things when they break.

2. You still have to take care of your property taxes.

3. You still need to have some insurance against catastrophe link the notorious ‘black mold’. – Getting rid of it can be VERY expensive.

The basic point here is that there are still problems to be handled.

It is true that you can hire a property management company to do it all for you – provided you can still keep enough income to take care of your lifestyle.

A few disasters can cause you some serious problems though and potentially disrupt your passive income. Perhaps not all of those disasters will show up in the form of ‘natural’ phenomenon.

A Real Estate agent I knew had a LOT of rental property. The problem for him was that he owed a lot on those properties in the form of mortgages. Since,
many of those properties were rented out to lower income families, when the economy got rough, many of those families left.

This left him with limited income but tons of liability in the form of those mortgages. I’ve lost touch with him, but I do think it didn’t go well.

Don’t get me wrong though, Real Estate is a great form of passive income. It’s just that the concept that it won’t be any work, as implied by the term ‘passive’ is just a little off.

Are There Better Examples of Passive Income?

This is where the term ‘passive’ is relative in my mind. Truly passive income is to me a false concept.

In the above example, my friend ran into some serious problems that I think he ultimately was not able to solve. That means he probably had to give up some or all of that property in the end. If there is no one to rent to, there is no income.

Of course, not all people who own rental property owe money on it. If you own the property outright, that is the best possible situation. Leveraging, complicates things and can lead to problems.

Now consider a different scenario. Instead of having your income rely solely on a handful of renters – or a few dozen – what if your income was stabilized by earning a LITTLE money from a WHOLE LOT Of people.

For example, if you were earning a few dollars from thousands of people instead of hundreds of dollars from a dozen or so people, wouldn’t that be better?

Use the page navigation below to visit the next page.

Next Page —>