This post is dedicated to one of our client Vinit Garg, who is an amazing person and extremely committed to his financial life. He is into a job and is rigorously working on creating passive income in his life. We had a few conversations on creating financial freedom and creating passive income and he has started taking some serious actions in this area which is inspiring.
You can only have two types of income streams in your life, either active or passive. Most people manage to create active income but a few are able to create structures for creating passive income. For creating passive income it really does not matter whether you are in job or business, if you create desire for creating passive income you will find out a way to do it. I and Manish spend a few hours each day on creating passive income in our business.
Typically we are told to study hard, get into a good institute, and find a job, get married, produce babies, buy a house, buy a car, and start making investments (some good and some junk) and buy insurance policies to save tax. No one told us about creating passive income which is so very important!
Here are the four elements that make your financial life complete:
§ Income- It happens from business or job
§ Expense- This is compulsory, No escape
§ Savings and Investments- Varies from person to person (debt, equity or other)
§ Passive income vehicles- Rarely in focus
Income is happening; expenses are compulsory, saving and investments are also taking place but the focus is missing on creating sources of passive income in life and if you really want to create an extraordinary financial success than work on creating passive income sources.
What is passive income?
This is an income where you are not working to create it but your money is working for you or your people are working for you. This income is on an auto mode where some income generating is happening on its own. You have put some structures in place that helps you create on-going income year on year.
Two types of passive income you can generate:
Immediate passive income:You can take a few steps in your financial life that can start giving you passive income immediately. For example rental income it starts the moment you give your space on rent, dividend income, and bank interest is something to think about.
Future Passive income: I know many of you are loaded with many responsibilities in life so you carry the dream of creating passive income but are unable to do it now. No problem start creating vehicles that will give you passive income in future to you. You can start making conscious efforts in this direction and passive income starts flowing to you after a few years.
Most people mix retirement planning with financial freedom which is not the right way. When we talk to our clients we really want them to get out of the myth that retirement corpus will be enough for them to live a good life.
Retirement corpus + on-going passive income = makes you free from the worries of money.
Start working on your financial life instead of working in your financial life:
When you work in your financial life you create active income and passive income is created when you start working on your financial life. If you want to create passive income you will have to focus on your activities of your day. We know what our high-return activities are. We know what our low-return activities are and we know what our no-return activities are! But then we pretend we don’t know why we are not able to find time for creating multiple sources of income.
§ I know one person who has 15+ ATM centres given on rent. One of my neighbours owns ATM centre and has given his premises to a bank that helps him create 2-3 lac of passive income every month. Various blogs and websites create passive income; many writers get royalty income which is passive. One of our clients is creating passive income from the parking space he owns, one of our client did a brainstorming in their office on creating passive income. I have spoken to people who have created multiple sources of income in their life they are no different than you and me. You will be shocked to know but your friendly Insurance agent also has a huge source passive income in his life through your policies. I am sharing this because at times passive income opportunities are just in front of us.
One of the things that I really want every investor to start working on is creating passive vehicles. You have one financial life and with passive income you can make the most out of it. A lot of people are concerned about their financial future all you need to do is brainstorm and seriously work on creating passive income. I have found a few ways of creating passive income, if you participate fully on this post I will be willing to share all with you.
This week action (Brainstorm with the help of these questions)
How many sources of income do you have?
Are you currently taking any actions for creating passive income in your life or not?
How many ways you can create passive income in your life?
Source : www.jaagoinvestor.com – Nandish Desai
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