There are many reasons why people want to earn passive income. It’s not that hard to imagine why someone likes the idea of making more money. Contrary to what some believe, passive income isn’t a scam. Thanks to the Internet, it’s easier than ever to make money without additional ongoing effort once the original product has been developed and released.
That said, focusing so much on how to earn passive income can distract you from another topic worth covering: ways to spend passive income. It’s important to keep in mind that the way in which you spend passive income will depend on how much you earn as well as your financial responsibilities and goals.
The ideas here should not be mistaken for financial advice. That said, the following examples illustrate how some people have used passive income to improve their lives. They may give you the inspiration to pursue your own goals.
Quitting Your Job to Start a Business
Pat Flynn is a passive income guru. He’s become very successful sharing his advice with others who want to earn money on the side. That wasn’t always the case. Flynn used to work at an architecture firm, earning far less than he earns now. He thus decided he would make himself more valuable to his employer and other firms by earning a special certification which required passing a notoriously challenging exam.
Flynn thought that blogging about his study habits would help him focus on preparing for the test. However, he eventually learned his blog had become very popular with others who were also preparing for the exam. He then monetized the site with ads and a self-published ebook.
Flynn ended up earning much more than he expected. Rather than stay in his industry, where his earning potential was still relatively limited, he used the money he earned to start a new business, offering passive income advice.
Not everyone who makes money on the side will earn as much as Flynn. His case is somewhat unique. However, it also proves that it’s possible to earn sufficient passive income to quit your day job and invest your earnings in a new business. That may be an ideal goal if you have an entrepreneurial spirit.
Fueling Your Passions
Some people focus on life outside their jobs. As a result, they are able to enjoy life even if they aren’t passionate about what they do for a living. They are simply able to separate their passions from their jobs. That’s not the case with everyone. There are also people who need to focus on work they find all-consuming if they are going to be satisfied with life in general.
Unfortunately, passions don’t always pay the bills. Maybe your dream is to simply earn a living off your art, but you’ve found you can’t earn enough doing that alone. This is another instance in which passive income may be part of a solution. It’s also one of the core principles in The 4-Hour Work Week. Written by Tim Ferriss, another well-known passive income expert, this book explains how people can create passive side businesses.
The goal isn’t to get rich off them. Although that may be possible, it’s not necessarily realistic. Instead, the goal is to earn enough money on the side that you can justify quitting your day job to focus on doing what you truly enjoy for a living. While neither your passion nor your passive income businesses alone may yield enough money to pay your bills, together, they might be enough.
Again, you need to be responsible. Don’t quit your day job until you’ve asked yourself these essential questions. It’s important to know you can rely on your passive income.
Investing in the Future
Investing is one of the more commonly-known methods for earning a passive income. It can also represent one of the smarter ways to use passive income. If you do your research, identifying strong investment opportunities, you can keep using the money you earn from passive side businesses to make investments for the future. Whether your goal is to save up for a major life milestone or to enjoy a more comfortable retirement, investing passive income can help.
It’s still important to remember that the best way to spend passive income will depend on a variety of factors. Don’t pursue any of these goals without being realistic. That said, as these stories illustrate, passive income doesn’t just have to be a nice surprise in your bank account. It can lead to major lifestyle changes.