Welcome to Let’s Talk Money Monday! “The New 7 Income Streams of Millionaires,” written in collaboration with Justin Castelli of RL Wealth Management, is a three-week series to give you ideas, tips, and strategies for creating the financially-free life you dream of. Each week, we’ll take you through a specific type of income stream and give you some examples of how you might integrate it into your life. In the end, this is about you. Pick and choose the income-generating activities that fit your life and your goals, and run from there! And remember: start where you can (even if that’s 3 income streams) – Rome wasn’t built in a day, and your financial freedom won’t be either. But, stick with these strategies and, over time, you’ll end up with a life you intentionally designed. So let’s get started! This week we’re in week 2 and talking about the beauty of passive income. Miss week 1? Don’t fret: hop on over here to learn about active income streams.
Last week, in Part 1 of The New 7 Income Streams of Millionaires
, we learned about active income streams. Although it’s amazing that today’s networked economy allows us the opportunity to stack multiple active income streams more effectively than ever before, the fact of the matter is that active income streams trade your time for money. This is necessary to some extent – nothing comes for free, right?
While that is true, passive income streams leverage assets of various types (property, capital, organizations) to help you make money with less continual activity. (This follows from the commonly held definition that passive income streams result from any business in which you as the taxpayer do not materially participate.)
So, what are some concrete examples of passive income streams that you might be able to add into your life? Let’s take a look at a few…
Probably the best example of this is Airbnb, which gives you the ability to rent out property (a form of asset sharing). Of course, this might not work if you’re at the family starting stage…and you might be a little confused on how it would be possible to do if you don’t own multiple properties. But, I know dozens of people who have rented out their homes or condos for a couple nights a month because it brings in enough to cover at least part of their house payment. For the few nights their house is occupied by someone else, they stay with a friend, family, or significant other.
Another option is to only rent your place out when big events are in town and rooms are in high demand (the Indy 500 in Indianapolis, Lollapalooza in Chicago, wherever the Super Bowl is in any given year). These are times when you can charge a premium! This strategy might not make you boatloads of money when you start (again, assuming you don’t have multiple properties where you can continually rent something out). But, think about what you could do with the extra funds if your monthly housing payment was reduced because it was covered by someone else staying over for a night or two? Padding your savings to get a head start on building that eventual portfolio income is never a bad thing!
One bonus to getting involved with the “right” network marketing company is that if you build and effective team, you create a residual income for yourself. A residual income comes from building an asset that continues to pay you after the initial work has been done. In this case, the asset is your team. In the network marketing scenario, you get to leverage your team’s time and efforts…as their business grows, so does yours. To be clear, it doesn’t mean you get to check out completely. Many at the top of their game in network marketing provide training and support to their downline teams. But when dozens or tens of dozens (or more!) people support your business by working on their own, it’s a pretty sweet gig.
Have you ever wondered how people can be full time bloggers (cough, not this one yet, cough), post about items from what seems to be an endlessly rotating closet, or travel 24/7 while making cool YouTube videos? It’s because they have figured out a way to resonate with hundreds of thousands of engaged consumers. As you might imagine, brands want access to those consumers, and they are willing to provide free product and other handsome rewards in return for referrals. Content marketing, network affiliations, and referral linking allow savvy online and social media figures to monetize their content in a big way. If you are more of a creative and feel like you have a unique viewpoint or that you could provide valuable, experiential advice to people who are on a similar path as you, creating a passive income stream via affiliate linking might be a very fulfilling option. However, you should be aware that it typically takes quite a while to build an engaged followership…and even longer to monetize that followership effectively. I would only recommend going this route if it’s something you’re truly interested in and committed to – otherwise it’ll likely feel like a whole lot of work with little payoff. This is one path where you have to do it for you first – not for the money. And, if you stay authentic to that for long enough, the money can (but won’t always) follow.
As with our active income stream examples, this is clearly not an exhaustive list. If you are lucky enough to have some additional capital, you might find that investing as part of a syndicate or other group investing vehicle is attractive!
Alright…so far, we’ve hit both active and passive income streams. But, we can’t forget about the key: making your money work for you through portfolio income. Join us here next week to learn more!
If you’re curious about what joining the YouEconomy looks like, think residual incomes sound like the bomb.com, or would like to create a plan for building up your active income streams, reach out to Ashton at firstname.lastname@example.org or via the Contact page!