Passive Income
One way to make sure you can create a business where at least some of your income is “hands-off” is to work on creating more passive income sources.
Passive income is kind of a misnomer because you do need to do work to generate revenue. The difference is that it represents the idea that you work once and generate income multiple times from the same work – rather than a strict dollars-for-hours conversion.
While pretty much anyone can create a passive income stream with their business online today, there are some pros and cons that you need to be made aware of.
The Pros
Overall, the benefits of creating passive income streams far outshine the cons of generating passive income sources. Some of the wealthiest people in the world earn their money via passive income sources such as investments, insurance sales, and the like.
But for you, when looking to transition from a job to a business, the main benefit will be that once you’ve built up passive income sources, you can keep earning money even if you have a sick kid, decide to go to the beach, or just don’t want to work today. Plus, you have more control over how you spend your time every single day.
Keep Earning When You Can’t Work
You do have to be careful with this benefit, but it is true. When you work to build passive income sources like affiliate marketing, once it’s built up, you can miss doing some tasks for a day or two – or even longer, depending on how far you’ve built your passive income sources.
I say be careful because some people think that they do the work once and then they can keep getting paid forever without having to do any more work. As nice as that sounds, it is not the case. There is always work to be done to maintain and replace passive income sources as they dry up, but with planning, your passive income streams can still earn you money while you vacation on the beach.
Leverage Your Time Better
When you have built your passive income sources up to the point you want them, you can start using your time more creatively to do the things you want to do without being afraid you’ll wind up homeless. If an opportunity arises to run off to Paris for the weekend, you’ll be able to do that without worry, unlike when you have a normal job or are a service provider.
These main benefits are the reason that passive income is so powerful. When you can have 100 percent control over how you spend your time, and you don’t have to worry about missing one day of work due to the effect it has on your income, you will immediately start to experience more quality of life.
The Cons
There are some downsides to creating passive income, but they should not keep you from getting started creating passive income sources right away. In fact, the sooner you start, the better. When it comes to passive income, you’ll need to build it up until it snowballs. Which brings us to the cons of creating passive income sources.
Work Upfront for Free
This is often a stumbling block to doing the work needed to create passive income. When you first start working on creating a passive income, you will not see any results at all for a long time so you must have some other source of income while you build this up.
It could be weeks, months, or even years before you see any money from your actions. The trick is to schedule this work in a realistic way so that you don’t overdo it, getting in the way of your other goals. In other words, don’t put all your eggs in one basket.
No Guarantees
There simply are no guarantees in life.
Investments are lost due to stock market crashes. Software that you promote goes out of business. A scandal happens. Something can happen to prevent your work from paying off long term that is totally out of your control.
If you keep this in mind, you can make better choices of the type of products and services you want to promote to produce passive income to help mitigate this issue.
Building your business to new heights using passive income models is a smart thing to do for your business. However, remember not to put all your eggs in one basket and to carefully choose the services and products that you will promote, and you can practically eliminate the risks mentioned.
