Passive Income: The Secret of the 1%

I’m sure I speak for most people when I say it’s cool to have money but the working part, not so much.

Seeing as most of us belong to the 99 percent ( the 1 percent can afford not to work) we have to work for our money. In case you don’t understand the reference, the 1 percent refers to the small group of people who get the largest part of the income cake while the remaining 99 percent hustle for the rest.

The secret of the 1 percent lies in generating passive income streams, then continuing to reinvest that income creating multiple income flows of passive income.

What is passive income?

Passive income means money that you make which is not tied to the number of hours you work. It can also be called residual income because you earn money even long after you did the work with little effort to maintain. It’s basically doing something once and then keep earning from it.

In all honesty, there is no completely passive income, it’s impossible to earn from doing absolutely nothing! Forget the get rich quick schemes.

How do you make passive income?

There are many different ways to earn passive income. This article will highlight some of the ways which you can set yourself up to earn for life.

• Real estate

This is probably the most common way; invest in property, and get paid by tenants commonly known as lodgers where I come from. There are also other ways to earn passive income from real estate

• Crowdfunded real estate- this is a relatively new investment vehicle, which allows the pooling of funds by crowdfunding to invest in real estate. You contribute your funds into the pool and become essentially a ‘shareholder’ which means that you will earn a portion of any profits made from the real estate investment. This makes it easier to invest in property with no huge capital outlay.
• Investing in REITs- A real estate investment trust is a company that owns, and in most cases operates, income-producing real estate. They allow you to invest in large scale properties for a lower initial outlay. You also get the additional fail-safe of a secondary market so that you can sell when you wish to.
• Dividends

You can invest in profitable companies on the stock exchange. Companies that make good profits will pay out some of those returns to shareholders as dividends. This allows you to earn passive income whenever the company pays out.

• Peer to peer lending

This is lending your money out to someone else for a fee. The peer to peer lending space comes with regulated platforms for lending such as UbaPesa, Zidisha, or RateSetter where you can lend money to other users. Much like being a law-abiding loanshark.

• Royalties

You don’t have to be a creative to earn money from royalties. You can simply buy royalties for music, books, or tv programs from sellers on royalty exchanges and then earn. It’s very much like investing in the stock exchange but instead of buying shares in a company, you buy the rights to royalties. While stocks may fluctuate based on world economics, entertainment is mostly evergreen.

• Network marketing

By creating a network for selling a product, you earn money from the sales of your downlines (other distributors who have joined below you in your network). Remember to look out for the differences between multilevel marketing and pyramid schemes.

• Audiobooks

Become an audiobook actor/narrator and some sites such as ACX.com give you the option of being paid in royalties for the book rather than cash. You can make passive income from these royalties.

If you don’t want to work for the rest of your life, then you should invest in passive income strategies that will allow you to keep on earning long after the work has been done. In the quest to wealth creation, follow the secret of the 1 percent; earn passive income.