If you don't want to get stuck between borderline life crisis and mid-life crisis then you have to create an additional source of income today are talking about when you are understanding income then you need to understand that there are two types of income There used to be one is active income and one is now passive income. In this article, you will learn about what is active and passive income and why it is important to build passive income, and how you can create it.
Which is best active income or passive income?
Before knowing which is the best income source. Let's first understand what is passive income and active income and how it differs from each other.
What is Active income?
Active income is income earned for performing a service, such as full-time or part-time employment, and earning a salary, commission, or tips. Income is earned through self-employment or active participation in business and two other viable means of income.
What is passive income?
Revenue for money that you do not spend your time, effort, and energy on. It contains the salaries earned in various forms depending on the skills and the system that contributes to the flow of income.
Simply put, a good income is worth the effort. Portfolio income (Income from asset management), excluding money from E-books, E-courses, affiliate marketing, YouTube monetization, etc. It is often viewed as a means of earning a living as it does not require much effort, or it may seem so.
The income you have that requires a little effort to do and take care of something will be called Active Income if you put a lot of time and effort into it.
What is the difference between Active Income and Passive Income and how to increase it?
But here there is a drawback if a person is good. For example, if you are the best doctor in the world then you can see a maximum of 10 patients. But for example, if you get 1000 patients in a day, can you give treatment to 1,000 patients? The answer is no'. Because you have limited time so if you are not able to give treatment to 1000 people then you will not get the fee that will be charged from them. That's why you won't even get money.
Now that people understood this concept they knew they had to make a passive income too. Even if you don't work you will still be on income. That is, if a doctor cannot see 1000 patients, it is very important to think about what he can do. Because they need money, there is a concept above skill and time and that concept is leverage, which means even if you don't work, your work is getting done.
Now, the doctor did, he opened a hospital and hired other doctors, he started paying them salaries from the fees he received from people, and an ecosystem was created. You see it as a hospital but if I talk about business terms I would say it is a passive income generating system.
Now the person who has learned to make a passive income generation system then that person can get freedom in his life and the goal of life is not to earn money. The goal of life is to enjoy life and one can do this only when he has passive income and when he has financial freedom. To achieve financial freedom it is very important that you become financially free and for that, you have to understand what is passive income? It means that even if you do not work there is money and in simple language even if you are sleeping and still you are getting money i.e. you are getting passive income.
Importance of Time Leverage
What is time Leverage?
Working time gets the greatest result with minimal effort. It’s about simplifying and finding the fastest way to the desired result. Using time management is an easy way to a successful business.
We have so many hours a day. If you can use your time, other people's time, and use technology to save your time you can do a lot in less time with less effort.
How can you use time leverage?
Spending time is important to focus your time on the things you do best and create the greatest impact. We all have 24 hours a day to do the results we want. In order to work smart, it is important to use your time wisely to be more productive in your most important activities.
If you only use your time, you can gain a lot more. If you use other people's time and skills, you can enhance your product and achieve great results.
By using effective time management techniques you can free up more time. By eliminating unnecessary tasks you can focus your time on the most important things. By setting effective goals, you can be clear about your priorities so that you do not waste time on less important work.
When you transfer and release certain tasks you can use your time and other people's time to do more in less time.
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How to use time leverage to increase productivity
Here are 5 Ways to create time leverage.
1. Set goals for yourself in the last few days
2. Specify the result you want
3. Get experts to use your time
4. Use time-lapse technology
5. Delegate to spare time
Conclusion
Utilization is the ultimate way to replicate things you do better to create a bigger impact. Spending your time on power transfers, technological and technical releases can help you create bigger and faster results.
When you have big goals, it's hard to do everything yourself. Strength can use the skills of others to help you seize your greatest opportunities, increase your energy and free up most of your time.
So the question is how can you make passive income. This is a very interesting topic. So here is a short story to explain to this income model so that you can understand it very easily.
A Short Story on Active and Passive Income - Importance of Leverage time
This story is about Ram and Shyam.
Both Ram and Shyam are friends and both do very important work. And it's not something they do they just waste time. So they feel that as they are growing up, they need to do something, they need to earn money. So what to do now, thinking about what to do, live in the village. So Ram says that the women of this village get water from a stream of water from the top of the hill, they bring it back with utensils, so our village is in great need of water.
So why don't we start selling water filled in pots in the village? We just have to go to the top of the hill and if we do that then we will start earning. Now they are starting it.
But after a few days, Ram gets tired. Ram says I cannot go, again and again, we have to make a system so that water comes in the village itself. So he goes to a potter and sees that he has a tube with a pipe and as soon as he opens that pipe, water starts pouring out of it. So he thinks this pipe is so small. Can such a large pipeline be built that can reach the village from the mountain? When he asks the same question to the potter, he tells Rama that it is possible. But it will take time. Ram says I am ready to take out time just help me.
Now he asks Shyam if he is also interested. So Shyam says how is it possible to make such a huge pipeline, I will do what I am doing. Shyam doesn't help Ram, but one thing was clear in Ram that when the water comes on his own, our efforts will be for a lifetime, so why not take a few months and make a pipeline, now he works in a potter's place, Several months pass but after that the pipeline is ready. And the day the pipeline comes, Shyam's running business stops. Because as soon as he opens the tap from the pipeline, so much water comes, fill as many pots as he wants. So the concept here is that he spread the pipeline through which the water is coming right now so you can sell as many pot as you want it's called a passive income generation system.
So in life, you have to understand one thing that you have to do that work that even if you do not work, you will get money. Because if we keep working we will get tired. We need to live life to the fullest, for that you need to make passive income. You have to see two things. What two things do you need, you will see that money is making money. You need money for real estate investment, you need money for stock investment, business, etc.
But where you don't need money, you need expertise. Just like you need the expertise to make videos on YouTube, you need knowledge and skills, you need to know how to speak. If you have skills then you can also earn money.
But there is one field where you can enter even if you do not have money and even if you do not have expertise. And the field is network marketing, you will see that people do not require a lot of money in this profession. So here you can see it as a passive income opportunity. Here once you make a team the team is multiplying and you are getting the turnover and with that turnover percentage, you are getting it as a passive income.
So here are 5 Passive Income ideas which you can choose according to you.
5 Passive Income Ideas for Building Money
If you are thinking of creating an income stream, check out these 5 strategies and learn what it takes to be successful with them, while also understanding the risks associated with each concept.
Selling information products
One popular way to earn an income is to set up an information product, such as an e-book, or audio or video tutorial, and then go back while the money goes into sales for your product. Courses can be distributed and sold through sites like Udemy, Skillshare, and Coursera.
Alternatively, you might consider a “freemium model” - building the following with free content and charging detailed information or for those who want to know more. For example, language teachers and stock selection tips can use this model. Free content serves as a reflection of your expertise and can attract those who want to go to the next level.
Opportunity: Information products can bring a very good stream of money because you make money easily after the first expiration date.
Risk: "It takes a lot of effort to create a product," Tresidder said. “And to make good money, you have to be good. There is no garbage dump there. "
Tresidder says you have to build a solid platform, market your products, and plan other products if you want to succeed.
"One product is not a business unless you get a lot of luck," Tresidder said. "The best way to sell an existing product is to create the best products."
Once you know the business model well, you can generate a good income, you say.
Lease income
Investing in rental property is an effective way to earn a living. But it often requires more work than people expect.
If you do not take the time to learn how to make a profitable career, you could lose your investment. Its a 7% Solution: You Can Get a Better Retirement. ”
Opportunity: To earn a living by renting property, Graves says you have to decide three things:
How much profit do you want from the investment?
Cost and total cost of construction.
Financial risks of possession.
For example, if your goal is to earn $ 10,000 a year with a rental and the property has a monthly mortgage of $ 2,000 and costs another $ 300 a month in taxes and other expenses, you will have to pay $ 3,133 monthly rent to reach the target.
Risk: There are a few questions to consider: Is there a market for your goods? What if you find an employer who pays too much or damages your property? What if you can't rent your place? Any of these things can put a huge strain on your income.
And recession can create challenges, too. You may have tenants who are no longer able to pay their rent, while you may still have your loan to pay. Or you may not be able to rent a home with as much money as you used to since your income is dwindling. And home prices have been steadily rising as a result of the low cost of mortgages, so your costs may not be able to cover your expenses. You will therefore want to measure these risks and have plans for possible situations to protect yourself.
Affiliate marketing
Through affiliate marketing, website owners, social media "influencers" or bloggers promote a third-party product by adding a product link to their site or social media account. Amazon may be a well-known affiliate partner, but eBay, Awin, and ShareASale are among the biggest names, too. And Instagram and TikTok have become great platforms for those who want to grow the following and improve products.
You could also consider expanding your email list to target your blog or direct people to the products and services they may be looking for.
Opportunity: When a visitor clicks on a link and buys from a third-party contact, the site owner receives a commission. The commission can range from 3 to 7 percent, so it will take considerable traffic to your site to generate revenue. But if you can grow the following or become a more profitable niche (like software, financial services, or physical fitness), you can make a critical coin.
Combined marketing is considered useless because, in theory, you can earn money by adding a link to your site or social media account. In fact, you will get nothing if you can attract readers to your site so they can click on the link and buy something.
Risk: If you are just starting out, you will need to take time to create content and build traffic. It can take a lot of time to build the next one, and you will have to find the right formula to attract that audience, a process that can also take a while. Worse, once you have exhausted all that power, your audience may be able to escape the next popular influence, practice, or social media.
Rent your home for a short time
This straightforward strategy takes advantage of the space you are not using at all and turns it into an opportunity to make money. If you are going summer or have to be out of town for a while, or maybe just want to travel, consider renting your current location while you are away.
Opportunity: You can post your space on any number of websites, such as Airbnb, and set your own rental goals. You will collect a check for your efforts with a little extra work, especially if you are hiring from a potential employer for a few months.
Risk: You don’t have a lot of financial declines here, although letting strangers stay in your house is a non-investment risk. Tenants may contaminate your property or damage your property or even steal your valuables, for example.
Create a blog or YouTube channel
If you have some skills like teaching, dancing, singing, good communication skills. Take your love of the topic and make it a blog or YouTube channel, using ads or sponsors to make your money. Find a popular topic, or a small niche, and become an expert at it. Initially, you will have to create a set of content and draw an audience, but it can create a steady stream of revenue over time, as you are known for your engaging content.
Opportunity: You can use a free (or very low) platform, and use your great content to build the following. When your voice or location is very different, it is better for you to be the "person" you are following. Then draw sponsors to you.
Risk: You will have to create content first and create continuous content, which may take some time. And you will need to have a great love for the product, as that can help you keep the motivation going forward, especially in the beginning as your fans are still discovering it.
What’s worse here is that you can spend a lot of your time and resources, not showing much about it, if there is limited interest in your topic or in your niche. Your expertise can be great for drawing a profitable audience, but you can't be sure of that until you try.
