What is Passive Income?
The IRS says passive income can come from just 2 sources: rental income or business income in which an individual does not actively participate.
Some examples include book, music or patent royalties and receiving money from dividends from stocks. The Rolling Stones “Satisfaction” for example which was written in the 60’s is still getting paid for it.
Passive income is gained from regular earnings other than from an employer or contractor.
The key is, the individual is not actively involved in the income creative source. In modern day terms, sitting on the beach somewhere enjoying a cocktail or two while the money still comes in. (Holiday pay does not count as passive income)
Unless you have received an inheritance, normally passive income is derived from a project or investment after you've put in the hard yards in both time and money.
Passive income has a ’get rich quick’ feel to it…but in reality like anything else, it still involves hard work. The difference with passive is that you do the work once and fingers crossed, keep getting paid many years down the track.
Along with the growth of the internet has come new ways to create passive income.
Many of the richest people on the planet have gained their wealth only recently due to the internet and through savvy business ideas. The key to their wealth is a high percentage of them have built a product and sold it through membership sites.
Google, Facebook and Microsoft for example are all a form of membership site. They all offer a product or service people need daily to make their lives easier.
Sure, you can stop using Facebook, but people like to be connected and now Facebook is growing even larger due to the baby boomers joining to stay connected with their grandchildren growing up. Facebook doesn’t make money from the community as such, but it does make money from the businesses wanting to connect with that community.
You don’t have to become a Google, but you can still create your own version of membership site and watch the passive income come in.
Imagine building a site where you also offer affiliate products on the side such as…
Anyone that signs up to a service through a link on your page gives you residual income for years to come.
The best art of this is, if they stop paying for their domain hosting, then they lose their business and that is the last thing they will let happen.
So, you keep getting paid for doing nothing.
Here are some areas you can get paid just by referring a lead to someone else.
And the list goes on. There is no shortage of referrals you can provide to help build you own passive income.
Simply place an affiliate image and link on your site and you are away.
You have to apply for the link of course.
The trick is getting people (traffic) to your site in the first place, but that’s another story.
Stay tuned for more passive income ideas.