In this article I shall cover the different sources where you can create an asset that will give you money while you sleep. When this happens you would effectively have created passive income.
Most people work a 9 to 5 job during their working life putting a side a small percentage each week into a retirement saving plan called superannuation.
Are you saving enough for retirement?
Now superannuation in Australia is compulsory for an employer to pay a certain percentage into their employee’s super fund each month. This percentage in 2021 is around 10% of your gross wages. What is interesting is most employees and self employed people rarely top up their to the full amount allowed by the Australian government which is $27,500 moving forward from July 1st 2021.
If you are someone who works a full time job earning around $60,000 a year you would most probably be paying around $6000 into the super fund through your employer. Have you thought about increasing this amount to a bigger amount so you have a bigger nest egg by the time you retire?
Why most people won’t have enough savings?
Most people cannot do this because their income is just enough for paying daily expenses. Such as rent, food and other necessities. So where do we get extra income from?
One place is getting a second job or possibly starting a small business part time on the side. So if you are planning to do something part time I suggest you think of ways that income could be passive not linear income.
I shall talk about liner income in another post soon and explain what it is. For now think of your wages as a source of linear income. Its about exchanging time for money in a nutshell.
Lets stick with passive streams of income.
Different ways to create passive or residual income:
- Write a book
- Become an actor and make money
- Become a singer and get albums sold like Michael Jordan. You get paid even when you die
- Create a business model that you don’t have to work in and get paid franchise fees each time someone joins the franchise
- Put aside money into your super fund
- Save money in a bank account.
- Buy property and the rent will be passive income
- Have shares on the stock market. The dividend income is passive income.
- Have a Network Marketing business.
- Have an Amazon business.