What is Passive Income Stream

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In this article, I want to touch base on a very important topic that most schools don’t teach “What Is Passive Income Stream“.

Before retiring from the military, I spent a lot of time thinking about what I wanted my retirement to look like and before long we quickly realized…

… in order to live the retirement we wanted we needed to understand:

There are many different ways to establish a passive income stream and I needed to learn about each one in order to make an informed decision on the path best suited for us.

In this article we will explore:

  • what passive income really is
  • why it is necessary
  • and how to achieve it
  • I’ll also share the path I eventually chose

 

What is Passive Income

Passive income is actually an income that requires little or no effort to acquire.

Sounds pretty cool, right?

No, it doesn’t mean you get money for doing nothing.

It takes effort upfront that pays out later which is exactly what we should be doing.

Spending the effort when we are young to have a steady source of income for when we get older was always a good choice to make.

If we don’t plan ahead we will certainly find ourselves either working until we die or living in poverty throughout our retirement.

Putting a plan in place puts us in the driver’s seat of our life, we control how we spend our time rather than constantly being pulled in every direction by life.

Passive income is an important part of any long-term wealth-building strategy.

Let’s take a look at…

 

Why We Need a Passive Income

Most of us have grown up hearing that old adage;

Go to school, get a great JOB and you’re set for life.” 

Especially if that job offers a pension plan.

What we don’t realize is that by getting a JOB we are essentially trading our time for money.

Whether we realize it or not, time is our most valuable asset.

Think about it, Seriously.

What is Passive Income Stream - hour glass
Hour Glass

We only have 24 hours in each day.

Most of us may not realize, we have a choice about how we spend those hours and with whom.

Most of us just blindly accept the concept that we need to give eight or more hours each day to a boss. In turn, that boss gives us money to purchase life’s essentials.

Wouldn’t we all love to earn some extra income, without the time commitment of another job?

What if you could build a Passive Income and maintain control of your time?

What if that passive income had the potential of:

  • increasing your wealth-building plan
  • enabled you to retire early
  • protects you against job loss
  • offers income when you’re no longer able to work or you outlive your retirement fund

Let’s face it, pensions are no longer considered a security vehicle and most companies are now looking for ways to opt-out of providing a pension.

 

Ways To Build a Passive Income

What is Passive Income Stream - Canadian money
Canadian Money

There are many different ways of creating a Passive Income Stream.

While they are very different they all are similar in that they require effort up-front which payout later.

These methods can be used alone or in combination as part of a well rounded passive income strategy.

 

Investing

The concept behind investing is to build a portfolio of assets to be used as an income source at retirement.

There are RRSPs, mutual funds, TFSA’s, stocks, bonds and more to name just a few and each Country has its own.

I would recommend working with a financial advisor who is qualified in helping you select appropriate investments in line with your objectives and risk tolerance.

You’re retirement plan and passive income should be thought of as two separate entities.

 

Real Estate

Real estate has always been and still is a sound investment.

You could save up and buy some real estate and rent it out.

Personally, I would invest in a rental property with 3 or more units. This would create a nice monthly income.

Keep in mind you will have to do any necessary maintenance or hire someone who would eat into your profit margins and time.

In order to be the most profitable, ensuring your own home is paid and paying cash for a rental property would be the ultimate plan.

However, acquiring that kind of cash is not very realistic in today’s society.

I recommend that you buy locally so it is easy to keep an eye on it even if you have a property manager.

YouTube Channel

If you have a hobby, why not record for a YouTube channel so you can make some extra money. Just keep uploading new videos and you will do fine.

You make money by allowing ads to be placed on your videos.

They only pay pennies per ad on a 3-second view.

Over time this can add up significantly but it takes years to build up.

You will not make any money in the first year but keep building your channel.

 

Blogging

Another fun idea is to start a blogging website and write about your hobbies or favourite interests.

This has been around for some time now.

With the new software available it makes it so easy to set up and manage that it has become a popular method of developing a passive income.

Some people are even able to replace their day JOB within a year.

People are always looking for information and if your content is engaging you will develop a great source of traffic and followers.

You could sell ad space on your blog and/or advertise products as an affiliate.

Once it’s established you have the potential of earning a rather substantial passive income for years to come.

 

Affiliate Marketing

There is plenty of company’s that you could join as an affiliate such as:

  • Amazon
  • Clickbank
  • Walmart
  • Best Buy
  • and plenty of others

 

By partnering with some of these companies you could sell their products on your blog site or YouTube channel.

Once you have established your site or channel you could have a passive income for years.

Sell Your Own Digital Products

Once you have established your site or channel with great engaging content and have a steady traffic flow you could develop your own ebook or app to offer your audience.

Rent Products

Perhaps you have a trailer, canoe, kayak, four-wheeler or some other useful item that you are not using all the time.

Why not rent it out?

You could even rent out a spare bedroom in your home through Airbnb.

Log into your favourite social media site, post a pic of your stuff, a price and tell the world they are available to rent.

This can provide a nice income however it takes a lot of work to keep up and could cost you more if not set up properly.

Storage

Maybe you have a section of your basement or part of your garage you’re not using, you could offer to store people’s stuff for a monthly fee. Make sure it is safe and secure though.

This could be scaled up by purchasing a storage facility.

 

Helpful Tips

There really are countless ways to develop a passive income.

As you search for the ideas you think maybe the best-fit look for ideas that show positive long-term track records.

Find out if other people are making money with that idea or if they got burned.

My most important tip would be –

Don’t fall for any ideas that promise a quick return or require huge amounts of money upfront.”

Don’t sabotage your other financial goals in any way. You want consistent, trustworthy and profitable ideas.

Always do your research first and don’t go into debt.

 

What Did I Choose?

I chose a combination of the above methods.

My retirement plan and passive income plan are two separate entities and that works well for me.

  • I established my retirement plan while I was still serving in the military and yes I worked with a certified financial planner many years ago to help put that plan into motion.
  • As for my passive income plan, because you are reading this you know that I have established a blog based website that allows me to help others create their own passive income stream.
  • My website offers affiliate products through several different vendors.
  • I also earn money from other people’s ads placed on my site.

In the future, I will also be creating my own digital products to offer as well.

As you can see combining several methods creates a well-rounded plan offering several methods of earning passive income.

 

Final Thoughts

I believe I have answered my initial question “What is Passive Income Stream“.

Passive income is a source of income where you put forth the effort in the beginning but don’t necessarily see income until later, at which time it requires very little if any further effort.

While there are several methods of earning a passive income, it is better to combine a few methods to create security.

Without a solid plan, your ideas will remain a dream.

Take the time required to develop a plan, then get busy and put it into action, today.

If blogging sounds like something that would work for you then check out this free training that really helped me get started.

Whatever method you choose, ensure you do your research and empower yourself to make an informed decision.

Be cautious of anything that promises quick results.

Choose something you will enjoy building in the initial stages.

Have the patience and faith to see it through to fruition.

Best of luck my friend and thanks for dropping by. I really appreciate it.

Please leave your comments below.


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6 thoughts on “What is Passive Income Stream”

  1. Hey Rick that is interesting and informative, you have obviously done your homework, how would I get started today on building a passive income, I dont have any money to spare, is it possible ?

    Reply
    • That is a very good question Mark. We can’t do much today with out money because money has replaced our barter system years ago. There are plenty of free information on the web to learn from however it will take you a very long time and you don’t know what to trust.

      If you have a place to live, eat and supply you with an internet connection then all you need after that is a quality training program that will teach you like my #1 recommended training.

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      Thanks for dropping by Mark I wish you all the best.
      Rick

      Reply
  2. Thank you for sharing such useful information. As a self employed person most of my working life, I paid into a personal pension, but never thought about passive income then. You’ve outlined some great ideas here that’s got me thinking:)

    Reply
    • You are very welcome Kathy I am glad you enjoyed my article. We usually need that little kick start to get us thinking outside the box or what we all have been taught growing up. Go to school, get a job that pays a pension and you will be set for life. Sorry but I have a better idea and it works faster then any job pension will ever provide with a greater reward.

      Hey, if you’re interested in developing a passive income go check out my article on ‘What Is Wealthy Affiliate About Scam Or What’, it provides some great useful information.

      Thanks for dropping by Kathy.
      All the best,
      Rick

      Reply
  3. Great tips, Rick. Obviously investing for retirement doesn’t work for me anymore as I am 67, but I have invested for retirement when I was younger.
    What I hadn’t done enough was looking beyond the 65 year horizon. I realized that when someone asked me “How old are you going to be?”
    Nobody knows how old he or she will be in the end, but it’s a thought provoking question.
    So maybe it can be an addition to your excellent tips: how long will your pension plan and your passive income stream go on.
    Anyway, great post!
    (BTW I am going to be 110, so that over 40 years to go) 😀

    Reply
    • Hi Hannie thanks so much for dropping by. I am pleased you liked my article and that is a great point you mentioned. Most are concerned about a pension yet have no idea how long or even how much it will give you to survive on. Yes, it is so true isn’t it? Not many think about how old they will get to live and how they will live at that age. What kind of expenses will they have to deal with? If they are unhealthy they can’t even work anymore and if someone has to take care of them how will they pay for it? Everyone is living the idea that everything will be taken care of but will it? You share some very good points Hannie and I will be sure to take them into consideration for my article.

      And I believe 110 is a fine young age, good for you. If you think it, you believe it, and if you believe it then you will acquire it.
      Thanks so much, Hannie for leaving your wonderful comment,
      All the best my dear

      Reply

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