Quick Tip – The Power of Passive Income

Start your side hustle now – Issue #107

Passive income is somewhat of a misnomer. It usually isn’t a completely passive source of money.

You do need to invest time and energy in setting it up initially. Plus, there will be some ongoing maintenance, care, and feeding to keep the revenue stream going.

However, it is pretty amazing compared to selling your time for money, which is what most of us do with a 9-5 job. A regular job does not scale. There is only one of you, and there are only 24 hours in a day.

One way that many people generate passive income is through investments. Essentially, you’re putting your money to work for you. If you choose your investments well, you get much more out than you put in. Some examples:

• Real estate

• Currency

• Dividend stocks

• Bonds

• Mutual funds

• Index funds

However, you can also build passive sources of income through your creative talent, knowledge, and skills. The online and digital world has turned this into an infinitely scalable business. Some examples:

• Books

• Music

• Software

• Online courses

• Paid articles

• Digital goods

• Artwork

I’ve experimented with a few sources of passive income over the years. This newsletter is a good example. It is probably my “least passive” source since I actively write several times per week.

However, it is infinitely scalable in terms of readership. I can just as easily provide my writing to one person vs. one billion people.

I also have online courses, paid articles on Medium, and even played around with t-shirt designs about eight years ago. The t-shirts are an excellent example of how massively passive a business like this can be.

I forgot all about my t-shirt store. It generated more sales when I was actively creating new designs and promoting it. Then, I just let it run itself. Eight years later, with no new designs and no marketing, I still receive sales notifications when people buy a shirt.

Why do I recommend that you set up passive income sources now while you’re still employed in your first career? Because you won’t want to work 9-5 forever, and most people don’t have enough in their retirement accounts to “go on vacation” for the rest of their lives.

I’m also recommending that you have side hustles and passive income now because it gives you more financial flexibility in your primary career. Setting up a reliable source of passive income takes time. You can’t just flip a switch. However, it will build up over the years.

You’ll be more confident in your 9-5 job when you know that you have a financial cushion from passive income. You’ll also feel comfortable leaving a job that no longer serves you well, and you’ll be less stressed during your job search.

Passive income that is under your control gives you more freedom.