Plenty of people want to earn some form of passive income, but many never take the necessary steps to make that goal a reality. Often, this is because they think that coming up with an idea for a passive income strategy is simply too difficult. However, as this blog has previously pointed out, this is not always the case.
Being intimidated by the early stages of the process is only one reason so many people fail to take action. Not having the right amount of motivation is perhaps a more important factor. The vague idea of “making money without putting in much effort” appeals to just about everyone, but it isn’t always enough to motivate someone. In contrast, specifying exactly why you want to earn a passive income and how you intend to do so gives you the energy and dedication you need to achieve this goal.
Here are some concrete steps you can take to get started on your passive income strategy:
Decide What You Want to Do.
In his book The 4-Hour Workweek, author (and whom some would call a “passive income guru”) Tim Ferriss encourages readers to establish sources of passive income that will provide them with a reliable stream of money that will enable them to live the life they want. However, he doesn’t try to convince people that doing so is an easy way to get rich. Ferriss admits that most passive income strategies don’t generate tremendous amounts of money.
Instead, Ferriss recommends honing in on exactly what you would do if you made enough money on the side to quit your day job. For example, maybe you currently work in an office, but your real passion is performing stand-up comedy. You know that if you had the time to focus exclusively on comedy, you could eventually make a decent living at it.
Decide how much money you would have to earn each month to maintain a satisfactory lifestyle while focusing on your comedy (or any other hobby you’d like to do full time). Once you understand exactly how much money you need make to reach your goal, it becomes easier to start developing a passive income strategy that will get you there.
Decide How Much Work You’re Willing to Do.
It’s worth noting that the term “passive income” doesn’t refer to income you make without putting in any effort whatsoever. It’s extremely rare to find a passive income strategy that yields substantial rewards without requiring some degree of work on your part.
This fact stops some people from pursuing this goal. However, this doesn’t mean that these individuals don’t want to put in any amount of effort. Instead, they are put off by not knowing exactly how much work they’ll need to put in to see a return on their investment.
It’s easy to understand why this would discourage someone. Most employees are willing to do their jobs because they know that if they meet certain specific expectations from their employer, then they’ll be able to take home a paycheck every week. The average person would probably be less inclined to exert himself or herself at a job if he or she didn’t know how much work he or she would have to do to earn a paycheck.
This ambiguity is what can make passive income strategies less attractive. If you’ve never tried establishing one before, you may wonder if putting in effort to do so is simply a waste of time.
This is why it’s a good idea to research what strategies might appeal to you. Focus specifically on finding out approximately how much time you’ll have to devote to turning one of them into a reliable source of income. During this process, honestly assess how much work you’re willing to put in. You should also research how much money you’re likely to make from a given strategy; ask yourself if the potential rewards are worth the effort involved. It’s very likely that you’ll be more willing to work towards this goal when you have a better understanding of what will be required of you and what you stand to gain.
Find Your Freedom.
Earning passive income doesn’t mean you have to quit your day job. This might not be your goal. However, there’s a good chance you have other objectives that would be easier to achieve with some extra money. Maybe they’re as simple as “going on an extra vacation every year” or “taking a class I’m interested in.”
Again, the vague concept of “more money” is attractive, but it isn’t usually strong enough to motivate the average person to establish a source of passive income. However, by deciding what exactly you would use extra money for, you concretize the idea, thus making it much easier to start working towards your passive income goals. You’ll enjoy a much more fulfilling lifestyle when you can earn money on the side that gives you the freedom to do all the things you’ve always wanted to do.