Passive income is a tricky business. It’s very difficult to achieve large amounts of passive income early in your career and/or investing life. The reason is that most forms of passive income are either in the form of business ownership or dividend stock ownership. Since most young people don’t own large businesses or large portfolios, this can be difficult. For older, seasoned veterans in business and the markets, this is definitely possible.
For those of us more on the front end of trying to create passive income streams, we’ll focus on a few tips that can help us to generate and create this form of income.
Starting a business is an excellent opportunity. Most entrepreneurs wouldn’t come close to describing their business as passive income since enormous amounts of effort and “sweat equity” are put into the business. Depending on how you structure and grow the enterprise, you can move towards a higher degree of passivity even as the income climbs.
For example, I know a gentleman that built a respectable landscape business in his part time. He then began hiring high school kids to take care of the labor which generated a nice profit and a form of passive income for him. He still managed aspects of the business but was no longer doing the direct labor. He did this in his part time, while keeping his “main job.” Not bad, right?
Build A Dividend Portfolio
Building a dividend portfolio is true passive income and is something you can be doing even while you’re creating a business or working a job. I am a firm believer in the DRIP investing strategy which helps build large portfolios over time.
In order to build a portfolio of dividend stocks that can essentially pay you enough cash flow to live off of, you need quality companies and you need size. In order to get size, you need time, wise buying points, and companies that grow their dividends over time. This website can definitely help you with this goal.
Online Income Streams
Another form of passive income that has grown in recent years is the idea of building online income streams. Whether it is a profitable blog, or an e-product that sells itself, you can definitely make money online. 90% of people don’t do this successfully, but it is definitely possible. I know this from first hand experience, creating income streams to varying degrees of passivity via websites ranging from a few hundred to a few thousand a month in income. We will discuss this at length on this blog in conjunction to the regular dividend income content.