Creating Passive Income Streams
Creating passive income streams is the buzz word today. What are residual incomes and its sources? Simply put – passive income are income that comes in even after you have completed the work to get it. It is money that comes in from the work you have already completed versus work that you are currently doing. In other words, it is a continued flow of income from an already completed task.So what are the sources of passive income? One very obvious source of passive income is interest income from your bank account. For example, when you open a savings account with a bank and deposited $1,000,000 into the account, you will receive say 3% interest a year which comes to $30,000 a year. You have completed the ‘work’ of depositing the money one and you will continue to receive the $30,000 without having to ‘work’ at depositing. This also means that to continue to enjoy the interest, you cannot withdraw a single cent.Rental income from real estate is also another source of passive income. The initial capital is less. However, you will need to ‘work’ a little more than just opening an account and depositing an initial amount into the account. For real estate income to work, you need to locate a property at a prime location that will have demand from tenants. Therefore location is important. Secondly you need to ensure that your tenant are reliable i.e. they will pay the rental on time – every month. Until and unless this tenant leaves, you will enjoy 12 months of rental income.Royalty income is another good example of passive income source. In order to earn royalty income, you will have to create songs or write a book. For example, Elvis and Michael Jackson are still earning royalties on the songs that they wrote now even when they have passed on. This is a good example of working once and earning the income after you have stopped working.If you love to write, writing articles is another way of earning passive income. You don’t have to have blockbuster novel in the likes of JK Rowling, Stephen King of John Grisham. The internet has created massive opportunities for writers to earn online. You could write articles and sell it to buyers who needed them or simply host your articles online. When you have a website that you keep updating with your articles, you will be able to earn yet another passive income, which is the pay-per-click model. Each time a visitor visits your website and click on the advertisement, you will get paid.
