• Sunday, February 25, 2024
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Create passive income sources for yourself

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Like I always say, passive income must be part of every individual’s life for such to become financial free in the future. Once you can gradually build your passive income until it surpasses your monthly expenses, then you are on your way to becoming financially free and perhaps wealthy in no time.

 For those who do not have the basic knowledge of what we mean by passive income, it is an income that you earn without actively participating in the daily task of making the money. It is like making money while you are sleeping. For example, it was arguably concluded that Bill Gates makes 218, 000 dollars per hour while sleeping. So, if he sleeps for 8 hours every other day, he would be making nothing less than 1,744,000 dollars. This may be a surprise to you if you have not given passive income a considerable attention in your life. But not to worry, the purpose of this article is to highlight the 5 major passive incomes you can create for yourself and pretty soon, you will be making money while sleeping too.

Rental Properties: Real estate has been around for quite a long time, but many sees it as a business. It is yet to come to the general knowledge of every Nigerian that real estate should be part of your life if you intend to be financially free. I am not talking about buying your dream home or a piece of land in a remote area. Such decision is a good initiative, but in no time, it will become one of your biggest liabilities. It will shelter you from the elements, no doubt, but will extort money from your pocket through maintenance. Anything that takes money from your pocket or bank account is a liability. Although your piece of land or dream home may appreciate over time, the rich do not focus their energy on capital gain. They focus on cash flow, thereby investing in rental properties that will bring monthly or yearly returns into their pockets or bank accounts. Such rental properties become sources of passive income for them. So, when you acquire a piece of property or land, turn it into rental property and it will forever bring money into your bank account even after your death. Once you have acquired one, get into the system of increasing the numbers of your rental properties. Take this side talk seriously; the rich makes the major part of their income from owning chains of rental properties before buying their dream homes.

Intellectual Property: Although we live in a society where intellectual property is not so respected, it can become your major source of passive income. Intellectual property could be an idea or design that someone created and the law prevents other people from copying it. Example of such is writing a classic book or series of books.  Writing a book or books can become a huge source of passive income. J.K. Rawlings was quite a poor school teacher until she wrote the Harry Porter series and became richer than the Queen of England. If you think you have the excellent skill for writing, then put your back to work and chunk out classics. Maybe you will turn out to be just another Chinua Achebe whose classic The Gods Are Not To Blame rakes in millions, in different currencies, even after his death. Perhaps you will want to follow the path of ChimamandaAdichie whose books are part of the secondary schools and tertiary institutions curriculums. Other intellectual properties include recording your own all weather songs, making your own movies, creating smart phone applications, software, e-books, informational or self-help DVDs, and ofcourse you can have your owninventions. Whatever it is you are creating, make sure you protect your ideas with copyright or patent. That wayyou can make more money by suing anyone who steals your idea or invention without your permission.

Network marketing: this is perhaps one of the strongest ways of creating passive income for yourself if you are part of the first set of persons in the pyramid or you are the founder. However, the beginning stage of Multi-Level Marketing (MLM) involves hard work, networking and marketing because you have to recruit people to be part of it. When the structure and system is strong, it will become a money spinning investment for you. But if you are starting at the bottom of the chain, take this advice; see yourself as your own boss running your own personal company and put all your energy into it. You can still grow your small network to a sizeable number, and then you will start reaping the profit of your hard labor.

Franchising:This part of passive income is probably new to some Nigerians, but cannot be ruled out when you intend to make passive income part of your life. Franchising is simply selling your brand to another party who wish to leverage on your business model. Such will pay you very reasonable fee for buying your franchise and will continue to pay a lifetime percentage from every income such an individual makes from leveraging on your brand. So, if you own a business, work hard to build it into a household name and once it becomes a strong brand, franchising it will be very easy.

Paper Asset:Although paper asset is arguably accepted as passive income, it is also a form of passive income that should be part of your life. Paper asset include shares, mutual funds, insurance, fixed deposit, T-Bill and many more. It is important that you separate part of your monthly income to acquire some of these paper assets knowing you can start receiving dividends, interests and what have you almost immediately. Some of these are very secure with reasonable interest rate, while some are volatile. Whichever one you choose, make sure you have abundant knowledge on how it works and how to grow your income from where you are to where you want to be. Good luck!