If you aren’t already aware of passive income, learning about this simple but powerful form of income will totally change the way you think about your finances. In this article I will discuss why passive income opportunities are so powerful and I’ll also briefly mention a few different kinds of opportunities to consider.

Regardless of whether you make $10 per hour or $100 per hour at your job, you’re still working for earned income. Now, there’s nothing wrong with earned income. We all have to work for this type of income at some point in our lives. Very few people are lucky enough to be born into money. However, the major disadvantage with earned income is that you only get paid when you trade your hours of work (whether physical labor or intellectual labor) for money.

Robert Kiyosaki, author of “Rich Dad, Poor Dad”, talks about how one of the biggest challenges when it comes to creating a substantial amount of wealth is to convert your earned income into passive income. What exactly is passive income? Simply put, it is income that pays you over and over again indefinitely into the future, after working for it only once. It comes in the form of assets. For example, you build a business or invest in real estate and this asset pays you a monthly return on your investment in the form of rental payments from your tenants. Hence, your only work you put into this asset is your initial, one-time investment of your money in purchasing it and your time in getting it ready for rent.

My philosophy is that if I’m going to work for the next few decades (many of those months and years most likely being spent on work I’m not particularly passionate about) why not spend as much time as I can working for passive income? It will allow me to retire sooner, it will free up more time to spend with my family, and it will give me the satisfaction of knowing that I’m increasing my family’s wealth, not my employer’s wealth.

Selecting Good Passive Income Opportunities

Alright, I’ve demonstrated the value of passive income. Now, how do you pick passive income opportunities? Well, it all depends on how much time and money you can invest. When I got started building passive income as a starving artist, I had more time on my hands than money. So I focused on building assets that didn’t cost much money to start. In my opinion, online businesses are great vehicles for creating passive income. If you like to write, blogs or affiliate marketing websites are a great choice. If writing is not your thing, an affordable online network marketing opportunity might be a good choice for you. The opportunities are endless. One great strategy is to build one of these types of assets, then invest a portion of your cash flow into real estate. Just like with paper assets like stocks and bonds, it’s a good idea to have a diverse portfolio of passive income. The most important thing is to do your homework and find out what works best for you!

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