Passive Income Streams
February 1, 2009 – 9:14 amPassive Income is “earnings an individual derives from a rental property, limited partnership or other enterprise in which he or she is not actively involved.” That sounds like a wonderful way to make money, although perhaps a bit too formal of a description for me.
In my mind, passive income is something that requires an initial act of time and energy. After that time and energy is spent, income than be generated without much to any additional time or energy.
Good examples of passive income streams are:
- Royalties from creative works
- Savings account
- Shrink-wrap Software products
- A restaurant or retail owner who has grown to the point of hiring a trustworthy manager
Some not so terrific passive income streams:
- Rental Properties – I hear these can take a lot of upkeep, management, and sometimes court dates. If you had a trustworthy manager it may make it worth it, but your rental portfolio would have to be significant to justify it.
There are quite a few sites on the net extolling passive income, or residual income, but they all seem to be repeating themselves.
The key to generating passive income is simple: find something you can produce which will fit into the residual income arena, complete the task, repeat.
If you’re feeling particularly intelligent, you can even track how much money your work is generating in order to better target your efforts. If all else fails, at least try to do something you enjoy while you put forth the effort.
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