It’s safe to assume that most people wouldn’t mind making extra money on the side while putting in minimal effort. That’s why so many are interested in the topic of passive income.
That said, it’s important to realize that you probably won’t get rich off of a passive income scheme. While it’s not exactly impossible, it’s also not likely to happen.
That doesn’t mean you should give up on trying to make extra—and easy—money altogether. While your passive income revenue stream probably won’t help you to buy a yacht, it can absolutely help you to achieve other worthwhile goals that you may not have considered. If you successfully establish a source of income that delivers a reliable and consistent revenue stream, you can enjoy the following major benefits.
Find More Time to Focus on Your Passions
In his book The 4-Hour Workweek, passive income guru Tim Ferriss tells people that they shouldn’t expect to earn millions of dollars without putting in much work. That’s not the goal you should focus on when developing a passive income strategy.
However, it is possible to create enough easy revenue streams that you can potentially quit your day job to focus on work that you actually enjoy. For instance, maybe you really love photography, but you don’t have the time or money to leave your job and start a photography business.
A strong passive income strategy could help you to change that fact. Obviously, you shouldn’t leave your job until you are entirely confident that your side income streams will consistently yield enough money to make that a safe choice. In other words, you shouldn’t quit your primary job the second that you collect your first set of earnings. That said, if you do put in the right amount of work upfront to develop a strong passive income strategy, you could reach a point where leaving your career to focus on your dream business is a completely reasonable idea.
Discover a Rewarding Revenue Stream
The term “passive income” is somewhat of a misnomer. Often, these revenue streams involve putting in some degree of effort.
They can also enable you to capitalize on your hobbies. For instance, designing jewelry may seem like a demanding task to the average person. However, the task may feel completely effortless to someone who enjoys it.
As a result, selling that jewelry online or in local shops may as well be a form of earning passive income for someone who is already devoting their spare time to creating it.
There’s a good chance you enjoy doing something that you could also make money from. Love to cook? You can create a YouTube channel or blog featuring your favorite recipes and monetize it with advertising. Enjoy playing an instrument? Film yourself giving tutorials and post them on YouTube or your own website.
Again, while these strategies technically require some amount of work on your part, if you’re actively involved in your hobby in any way, it won’t feel like you’re taking on much extra work.
Enjoy the Little Extras
The amount of money you can make off of a passive income strategy doesn’t need to be substantial for it to be worthwhile. Smaller passive income schemes—ones that aren’t necessarily designed to enable you to eventually quit your job—can still yield a few extra dollars each month that you wouldn’t have expected to earn otherwise.
Obviously, that extra money can help you to pay your bills. On the other hand, if you’re in a fairly stable financial position, that little bit of extra money each month can be used toward fun experiences or purchases that you wouldn’t have been able to justify without it.
Save for Major Purchases
You don’t need to spend the extra money that you earn from a passive income strategy right away. Instead, you can set up an account in which you deposit your monthly earnings. At first, the total sum may seem like a small amount. However, over time those extra deposits can add up. Eventually, you’ll reach a point where that account can be the key to enabling you to buy a home or to pay for your child’s education.
While a passive income likely won’t make you rich, it’s simply extra money. More importantly, it’s extra money that you didn’t need to work very hard to earn. Just about everyone in the world can think of ways to earn a little more money each month. As this blog has pointed out in the past, generating that kind of income doesn’t need to be difficult at all, and the rewards are worth it.