There are many ways to generate income. The most traditional way, and the way that is practiced by most people is by getting a job, working 40 hours a week for a boss, and then drawing a paycheck at the end of the month. This is the most common form of active income. While this may provide a secure amount of income on a month to month basis, you are generally spending 8 hours a day away from your home and family essentially selling your time to someone else.
This way of generating an income has several benefits:
- You know how much money you get at the end of each month (more or less).
- You are guaranteed that income for an extended period of time (for the most part).
- You can feel secure in the knowledge that you will always be able to provide for yourself and your family (generally speaking).
- hmmm I can’t really think of many more…
Then there is the other way to generate active income: You work for yourself. You identify a need or a problem that a lot of people have. Next, you figure out a way to solve the problem or fulfill that need through either a product or a service. Then, you spend 16 hours a day working your ass off getting your product or service developed, marketed and into the hands of your customers, and now you are living the dream!
The benefits to following this route include (but are not limited to) :
- You are your own boss, you make all the decisions!
- Your efforts directly influence the success of your business and thus increases your ability to generate income.
- You are not selling your time to someone else for their benefit, instead your time is your own used for your own benefit.
- Your potential to earn can keep growing for as long as you keep working hard at your business.
- There is a much higher sense of satisfaction in the work that you are doing.
- You can build a platform from which your children can one day benefit from when they take over from you.
Now I know that starting and running your own business is not all sunshine and roses, in fact I believe it to be the complete opposite, and it most definitely is not for everyone! The hard work and uncertainty coupled with taking this route can be a lot more challenging than what most people are willing to accept. Starting a venture and not knowing if it will work out or not, spending way more time getting your business up and running than what you actually have, and ultimately not knowing if you will make enough money to pay all the bills, are some of the major factors that most people are not prepared to deal with.
BUT… when it all works out, and you have finally figured out how to run your business smoothly and successfully, then all the above mentioned factors become null and void, and you begin reaping the fruits of your labor. The level of satisfaction you get from finally reaching that point of success is second to none! For me personally, success means that my business is able to sustain me and my family, and we are able to live a comfortable life. I’m not talking about being wealthy, I’m talking about being the boss of my own time and not needing to worry about paying the bills.
The two ways of generating income actively both require your constant physical presence. In the first instance, having a job, if you are not at work you won’t get paid, it’s as simple as that. Sure, a lot of jobs allow you a certain amount of time off with remuneration, but exceed that time off then consequences begin to follow, and suddenly all of that job security starts to come into question.
Similarly, running your own business relies heavily on you being around, after all, the reason it became so successful was because of you! The more time you spend away from your business, the more likely it is to start becoming less effective, and so all that hard work needs to start over again once you return just to get back to where you were. In the case where you are the business, no work means no income, period!
This brings me to probably the most important way that absolutely every single person in the world really should learn to generate income. I believe that it is so important to a person’s well-being that it should form the corner stone of the entire educational system. It should get taught right along (if not ahead of) subjects such as math, languages and science. It should be a skill taught to all from as soon as they can walk and talk so that it becomes second nature to a person in the same way that writing a letter or adding up the total of a simple set of numbers. I’m talking about Passive Income!
I define passive income as a stream of income that does not require your constant physical presence. You can take a break from the work you are doing and without any effort income will keep rolling in. It is a form of income that does not require 16 hour or even 8 hour work days. Passive income is any income you can spend as little as 1 hour a day working on, and day after day you are able to generate a steady stream of income.
Buying a rental house and letting it out to tenants is a way of generating passive income. Investing in dividend stocks is another smart way of generating passive income. Setting up an order-to-print online business is one of the latest trends in generating passive income. And then there is affiliate marketing which has been around for ages, but in my view seems to be a rather misunderstood form of passive income for several varying reasons.
The reason that I believe passive income is such an important way of generating income is because it can supplement your active income and even be grown to such an extent that it can become your primary source of income. This is so important since it will allow you the time and freedom to be able to do the things that really matter, such as spending time with your family, spending time on yourself, and also spending time helping others and ultimately making our world a better place! Sounds cliché, but it’s true!
Regardless of the way you generate your income, whether you are working for a boss or you are running your own business, you need to find a way to set up different streams of passive income. This will greatly improve your standard of living and quality of life. The knowledge that you have enough income to pay all your bills AND that extra income to allow you to do the things you really want to will cut your stress in half and boost your confidence levels through the roof! You will be a lot more relaxed and discover a joy in life that you thought was only possible in story books.
This is my take on income, and the different ways a person can generate an income. There is active income and passive income. You can generate active income either by working for a boss or by setting up your own business and working that business. Regardless of which way you decide to generate your income, passive income should always be a part of your income generating repertoire. As an addition to your active income stream or as a primary source of income, passive income only requires a small amount of time to make a BIG difference to your life. It also has the added bonus of being infinitely scalable with a little bit of added effort which could ultimately lead you to the life of your dreams!
