Setting the Right Goals, Mindset, and Expectations
Many people think that generating passive income is only for rich people who already have certain amount of money (lump sum). Some people have a fixed mindset that “you need money to make money.” But do you know that we can build our passive income streams from zero or little amount of money? Cited from 2019 CNBC article, there were 2,604 billionaires in the world and 55.8% of them were self-made! So, don’t give up on your dreams! We will provide you with some tips, step by step, on how to do that.
Before You start: what NOT to do
Before we come to the main tips, we would like to present you with a NOT TO DO lists, which include:
Making an unrealistic goal (e.g., generating passive income from no money to $1B in 3 days).
Manage your expectations! Having unrealistic goals can lead you to stupid decisions and just make you feel disappointed. Sustainable passive income takes time to build! Make sure your goals are SMART (Specific, Measurable, Achievable, Relevant, and Time-Bound). Time and money are the two ways to build passive income. Building a website takes time, and depending on how you approach it, very little money. On the other hand, investing in dividend income stocks takes money, but very little time. When you’re starting out, you need to identify what resources are available to you (i.e., time and/or money) and pick an idea that utilizes those resources. Ideally, you can also leverage your existing skills and expertise. For example, a web developer can build websites bringing in passive income, or a videographer can launch their own YouTube channel.
Following some “quick & easy money schemes”.
Beware of these schemes! Once you search “passive income”, there will be a lot of information that ‘shows’ you numerous ways. People are impatient; that’s just human nature! And some people acknowledge and take advantage of this situation by luring the “impatient” people to follow “quick & easy money schemes”; which, in the end, do more harm than good! For example, there are people out there who sell some “magic programs” that promise you passive and fixed earnings, there’s a good chance you will just waste your time and money! You could end up getting scammed.
Following some biased affiliates without doing prior in-depth research.
Businesses pay affiliate commissions to bloggers and social media influencers that refer readers to their website through a link, increasing traffic. Some payouts are pay-per-click and others are pay-per-action, requiring lead information from the affiliate marketing referrer or sales. However, beware of affiliates that market illegal and untrusted financial products. Please take the time to do meta-analysis and prior in-depth research from unbiased resources before making the decision to follow affiliate recommendations, for your own good!
Being evil and ruthless. Or being careless and ignorant.
Many “passive income strategies” ask you to recruit your loved ones and you will get the percentage from it. Some of these schemes can turn out terribly in the end. Please check the difference between a Ponzi, pyramid or multi-level marketing scheme; how their system works, which one is sustainable, and which one is not. Usually, people who are involved in some of these systems, especially an appointed “leader”, can become really pushy; they will ask you to recruit your loved ones, first thing first. Because your loved ones are biased and will not second-guess you; they will join or buy whatever you are selling because they want to support you! Things can turn really ugly if you profit from their loss; it will destroy your relationship, harm your personal image, and have a negative impact on your future career.
Not knowing legal rules and systems in your residing country.
Make sure that the product/system you want to enroll in is legal in your residing country. Get familiar with the tax system as well to avoid a huge fine in the future.
Taking on debt without knowing what to do with it.
Debt is not necessarily bad if you know what to do with it (e.g., How Do Millionaires and Billionaires Make Money from Their Insurance Policy). But you can be trapped in a crippling debt if you use debt for ‘gambling’ on the newest ‘magic system’ that promises to make you rich, for example.
Making a deal with “difficult people” (e.g., clients, investors, bosses, etc.).
Your time is a valuable resource to build a passive income, especially in the beginning when money is limited. During the process, you will bump into different kinds of people with different types of personalities. Please be mindful and be aware of people who violate your personal space and boundaries. Do not waste your time on “difficult people” who can slow down your process of reaching the ultimate goal of financial freedom.
Before You Start: Build Up Your Wealth!
If you are an employee and you are going to go through this transition, don’t jump ship too early! You must at least build a raft first. Before you jump ship (quit your job) make sure that your new focus is able to support your lifestyle. Also besides your 9-to-5 job, it is suggested for you to have some side hustle ideas, in case things go south all of a sudden.
Generating Income In Your Free Time
You can check websites such as Fiverr for some freelance work. While you have free time, many people are willing to pay some amount of money to outsource their work (to save time). Here are some side hustle ideas as an alternative for building up some wealth and developing your skills:
- Filling Out Surveys: Some websites will pay you just for taking surveys. While this option does require you to give up some of your time, answering survey questions takes minimal effort; you could practically do it in your sleep. Some sites that pay for survey responses include: SurveyJunkie, KashKick, Swagbucks, MyPoints, InboxDollars, Harris Poll.
- Enter Sweepstakes: Whether you’re sitting in a waiting room or just killing time, there’s money to be made by entering free sweepstakes on your phone or computer. PrizeGrab offers different prizes every week, including cash.
- Writing Reviews
- Online Teaching
- Translating & Interpreting
- Proofreading and Editing
- CV, Cover Letter, and Resume Writing
- Article Writing
- Product Description Writing
- Transcribing Audio Files
- Book Cover Artist
- Logo Designing
- Designing Flyers, Leaflets, Business Cards, and Postcards
- Presentation Design
- Website Building
- Website Development
- Website Design
- Website Testing
- WordPress Troubleshooter
- Business Consulting
- Digital Marketing
- Virtual Assistant
- Social Media Manager
- Video Editor
- 3D and 2D Modelling
- Becoming A Referral Source: Try networking with local businesses to see if you can get paid for referring new customers. There are also a number of sites and apps that will pay you to refer friends, so look for opportunities to recommend products and services that you are passionate about.
- Real Estate Agent
There are 4 most common sources that people have to generate passive income: money, time, skills & knowledge, and network. You might not have money or a network. But all of us share the same resource: 24 hours a day. What you need to do is make the most out of it to build wealth in the beginning. While doing some “gigs” or freelancing jobs, you will not only earn extra money but also explore skills you are good at, and want to develop. After that, you are ready to build your passive income streams, please refer to our next article “How Can I Make Passive Income with No Money? Building Passive Income Streams (Part 1, Part 2, and Part 3)”. You can also check another article related to this “How Can I Make Passive Income with Idle Cash?”