So... You Want To Make Passive Income?

QUOTE OF THE DAY

SO… YOU WANT TO MAKE PASSIVE INCOME?

440 Words | 1 Min 36 Sec Read

Passive income is a topic that consistently floats around on the money side of social media.

It’s the idea that you can make money and generate income while not actually doing anything... That’s right, you can make money in your sleep.

There are loads of different opinions and viewpoints over the legitimacy of passive income, if it exists, if it’s easy, and if it’s attainable, and the short answer is yes and no.

You see, passive income is defined as ‘a type of unearned income that is acquired with minimal labour to earn or maintain.’

If that’s the case, then it’s most definitely attainable.

It doesn’t mean you have to make money without lifting a finger; it’s just putting the right systems in place that allow the minimum work that you put in to have a tenfold result.

Minimal labour = income

True passive income is typically achieved due to a huge amount of front loaded effort and then maintaining the result of that effort.

For example, if you were to spend 6 months building software that solved a problem and for the next 5 years selling that software, the income would technically be passive as the work you put in doesn’t correlate with the result you are getting, and that’s what true passive income is.

There is a disconnect between the time and effort you put in and the result you get.

So how can you make passive income?

You can’t.

Not yet anyway; first, you should be focusing on leveraged income because that is the first step towards true passive income.

This is the idea of using something that already exists to further your own cause, and if you’re lost with the term of leverage, you can check out a previous Issue we made HERE.

Breaking it down, however, there are two main types of leverage that you can take advantage of as someone just getting started that will allow you to disconnect your time, effort, and money.

SYSTEMS

Systems is the first one; this is the Idea of having things in place that go together seamlessly.

If it's automated, it means someone can buy something from you, and you can make money without having to lift a finger. That seems pretty passive, right?

PEOPLE

Secondly, there are people or a team, which is arguably more important as it is infinitely scalable.

This is the idea of having an employee or freelancer that you pay x amount an hour that produces results that to you are worth 5x what you pay them.

This then makes the difference between what you pay them and what you receive pretty passive.

ACTIONABLE NEXT STEPS:

So, what is the first step to passive income?

It’s understood that passive income is only kind of passive, but the part of it, that is, is definitely attainable.

Your first real step is picking a vehicle that will allow you to implement what you’ve just learned.

For example, you can’t apply the minimum labour principle to a lemondae stand, but you can to a software company.

BOOK OF THE WEEK ⤵️

The book of the week is ‘Deep Work’ by Cal Newport, a book about how to achieve success in a distracted world and master the art of focus and deep undistracted work. Check it out here.

CREATOR OF THE WEEK ⤵️

The creator of the week is @LiamPorritt, a corporate lawyer who makes content around how to work smart, find balance, and ultimately be happy. Go check him out.

LESSON OF THE DAY ⤵️

Sometimes a simple “f**k it, I’ll make it work” is all you need to start the snowball of momentum into a better life.

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