Most of us have to work daily to earn enough income to fund our lifestyle. Unless you are one of the fortunate few that are born into wealth, true financial independence is often a distant dream and the primary goal is to make it to retirement.
But it doesn’t have to be that way. Changing your perception of what work is can be a radical first step to financial independence. What if you didn’t have to work for somebody else? What if income wasn’t tied to the daily grind?
Enter passive income – your road to financial independence.
Once an initial contribution of energy, time, and financial investment is made, you can earn income passively. This means the money continues to come-in consistently, automatically, and with little ongoing maintenance.
If you can create a passive income, especially when young, it is easy to see why financial independence looks more attainable.
Passive Income Is Everywhere
Passive income opportunities are everywhere; from affiliate marketing online, to renting out property, to getting paid dividends from stock. The trick is to make your career and financial decisions revolve around potential passive income streams. Take classes in real estate, not history. Invest your savings, don’t leave them in a regular bank account. Work extra hard now so you can reap the benefits later.
Here are 4 of those benefits that passive income can bring you …
1) Prevent Financial Emergencies
A core piece of financial advice is to create an emergency savings account that you can turn to if you lose your job, are faced with unexpected bills and expenses, get stuck in a natural disaster, are going through a divorce, or a faced with any other kind of financial emergency.
You can also find 1,000 dollar loans online via sites like WeGot1000 to help bridge the gap.
While this advice is still solid if you have a passive income stream, you may never even view any of these situations as true financial emergencies and you might not even need a loan. Not only do you have a safety net, but that safety net keeps on replenishing itself regardless of your circumstances.
If you lose your day job, you can rely on passive income until you find another. If that car payment comes out earlier than expected, you can bridge the gap. Need to ditch everything and get away from a hurricane? You still have money coming in.
Of course, every situation is different and even with a passive income you can still end up struggling, but you’re in a much better position than those who rely solely on a weekly or monthly wage, tied to their ongoing effort.
If the potential for financial emergencies is reduced, your road to financial independence is a lot smoother.
2) Create Investment Opportunities
A lot of people like the sound of investing. Who doesn’t want more money? The trouble is to invest you need capital to begin with, and you need to be prepared to risk that money because even the soundest of investments can result in a loss.
If you have a passive income alongside a regular job, you can use the passive income to invest. Your wage or salary covers your day to day lifestyle and your passive income can be used to experiment and generate more wealth in the long-run.
The main point is that passive income gives you more financial freedom.
3) Allow You to Find Other Revenue Streams
Usually, when you work a regular job (even a high-powered one), it takes up the majority of your time. You may find if you’re particularly driven that you can get something else going on the side, but there’s not much else you can do after that. There’s only so many hours in a day.
However, if you use your extra time to create a passive income stream and eventually you find success, you then have the freedom to repeat the process. This is because passive income, once it is up and running, takes minimal effort to maintain.
In theory, you can have an unlimited amount of passive income streams, or at least until the point where you’ve found a balance between maintaining them all and not feeling overwhelmed.
Of course, by then you can probably afford to …
4) Allow You to Quit your Day Job
If you have built a stable passive income that can sustain you, then there’s no reason to be working a regular 9 to 5 job. Financial independence is all about having enough wealth to live on comfortably without working. Passive income can accomplish this.
That’s not to say you’ll get there right away, but as you venture on the journey, things will get easier. Before quitting your job outright, you may have the freedom to quit a dead-end job and do something that you enjoy that pays less.
And even if you don’t retire as the head of a billion-dollar empire, whatever passive income you do have will continue into old age if managed correctly.
It’s a Snowball Effect
As you can see, the brilliance of passive income is that it creates a financial snowball effect. A small passive income on the side gives you the freedom to create another, which gives you the money to invest, which earns you enough to quit your job, which gives you more free time to develop more passive income streams – your wealth continues to accumulate and you reach financial independence.
Now you have the time to travel, start a family, be creative without the pressure of making money, and thoroughly enjoy life.
Start Your Journey Now!
Now you know what passive income can do for you, it’s time to start. The best mindset to have is that of a bodybuilder – no pain no gain. In the beginning, you need to force yourself to live frugally and save every last penny, to have enough capital to get started.
The rest is up to you.