I’d argue that the American dream today has changed from a “rags to riches” type story to a world in which Americans, as a whole, seem to want to work less and earn more.
But is this even possible? To those slaving away for 40+ hours each week for a set salary, while companies get further and further ahead and employees get the same wage year in and year out despite inflation, the concept of working less and earning more seems to be nothing but a dream.
Passive income is the key to making the new American dream – working less and earning more – a reality. However, do not be fooled since there is significant work involved in generating a passive income, at least to begin with.
Passive income is most often defined as income generated from the ownership of a rental property, which can be commercial property or residential property. Yet, there are other ways to generate a passive income as well, like creating a product or service that will be able to sell itself far into the future without much intervention from you.
In the blogging world, many consider freelancing and the ownership of a blog to be passive income, but they are wrong (for the most part).
There is a considerable amount of work that goes into freelance services whether it is writing, being a virtual assistant, or providing other services. These are all tasks that you must complete yourself to earn the income.
Owning a blog can also generate an income, but again most of this is not passive income. Blog ownership takes a lot of work upfront and also continual maintenance of the site and its content. The only blog income that is truly passive is from advertising, and even then some advertising income isn’t truly passive either. For the most part, after you set up the ads, there is little work and there can be huge rewards.
Lots of bloggers branch out after a while, seeking to decrease their workload and increase their profits by hiring things to be done by freelancers or creating an additional product that will then produce its own passive income, like a book. While the book takes work to create, ultimately it can earn a passive income for years to come.
However, whether you are a blogger, real estate entrepreneur, or serial business owner, be careful in your quest to generate a passive income, as a Forbes article mentions, you can’t stay ahead of the competition by being passive. You may be able to create a passive income flow from your products for a while, but eventually something else will be developed to challenge your market share.
Lots of people think that by creating one good or service that generates a passive income, they will never have to work a day in their life again. But, the key to creating and maintaining a passive income you can live off of is to not remain passive for long. You should continue to diversify by finding many streams of income, with some being passive and some being active.
Do you rely on passive income to work less and earn more?