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Break Free From Wage Slavery With Passive Income
build passive income
Waking up to an alarm clock every weekday is not passive income. Being paid once for work done once is how most of us earn our bread. Our capitalist system is set up this way. It takes some scheming and planning to get around this. The more income you can make not tied to putting in time the more options you have. I'd like to discuss ways to make passive or residual income. None of these are easy by any means, and it takes trial and error as well as time to figure out which ones match your temperament.
Dividend stocks are my personal favorite. Most likely you'll have to get the investment capital from working a job, but that's OK. After you do your research on individual dividend companies go all in and give time a chance to work its magic. Or you can go with index funds. They usually have low expenses, and it's a way to own the whole market so to speak.
Collecting rent on real property is another way to retire from the rat race early. This takes a different type of know-how and more capital than stock buying. This one personally doesn't fit my personality at least not at this point. People do it though. Like with anything it's best to start with a small cheap property to get your sea legs.
Royalties are income most people don't make. I certainly don't. I just know this one in theory. The opportunity is there though if you can create something that sells for you. Examples would be music, acting, a game, or a book.
Annuities are another option once you've built up a decent nest egg. If you don't live very long while on the annuity the insurance company wins, but if you live to be old you could come out ahead.
A defined benefit plan is the old fashioned pension that's going the way of the dinosaur. These are very similar to annuities, but you don't have to buy them yourself. You just have to put in the time with whoever is doling them out.
This one is abysmal lately, but in the past interest has been a good way to earn passive income. With interest rates so low for so long this is a challenge.
Capital gains consist of something going up in value that you can cash out for more than you paid for it. Stocks, real estate, and precious metals are good examples.
You could also start a business that runs without you. This might the hardest one of all. America is based on entrepreneurism. At least it used to be. Vending machines, coin laundries, and car washes are some ideas that come to mind with minimal staffing.
These are just a few ideas to make your life a little bit more free from the grind.
© 2013 Blair Williamson, ChFC®