There are those searching the internet for any possible tips on passive income and how to earn more money passively. There are also those that view passive income strategies as being nothing but a big fat scam. Regardless of where you fall on the spectrum, let’s address if its worth chasing passive income:

How’s your active income?

Before you start trying out different ways to boost your passive income, have you even tried to improve your passive income? Have you applied for higher earning positions? Have you attempted to negotiate for that much needed raise? If not, then your first priority should be to get serious about the money you actively earn before you can start passively earning money. Too often do people begin stressing about their passive income before they have actively attempted to earn as much income as possible.

What’s the effort required?

Some supposed passive income opportunities require an absurd amount of effort with very minimal return for your time invested. What am I talking about?

1. Bulk article writing. There are many sites out there that share the income with you from the ad money that comes in from your posts. The only problem is that you often have to have tons of posts in the directory before you see any money coming in at all. Therefore, you need to invest a lot of your time upfront before you even see the potential of money coming in. Sure the income comes in long after the work has been put in, technically making it passive, but the initial effort is heavy.

2. Launching a crappy product. Many newbies to the world of internet income will want to attempt to create a digital product as a source of passive income. This is an excellent concept in theory. The reality is that most products suck and don’t sell well at all. The end result is hours upon hours spent on an unprofitable endeavor.

What are your passive income expectations?

Do you view passive income the same way you do winning the lottery? If so, then this is the wrong mind frame. This type of thinking will quickly discourage you from even attempting any passive income opportunities.

I definitely see the value in increasing my passive income and trying to generate more money while I sleep. I just feel that a little bit more research needs to be done before we decide what passive income opportunity we will follow. We also need to weed out the passive income scams, so that we can focus on the legit passive income opportunities that exist out there.

Anyone that comes over to Passive Income Now is surely interested in increasing/creating passive income. I’m personally very passionate about increasing my active income, along with my passive income. I understand that active income comes first. However, I do feel that your active income can be used as leverage to slowly create passive income.

For all of you reading this with a steady source of active income, this quick straight-to-the-point guide can show you how to create passive income:

1. Pick a source of passive income.

There are many ways to create passive income. It’s a matter of you choosing the right source of passive income for your situation (risk tolerance, capital investment, time constraints, etc.). Not every source of passive income will be ideal for your unique situation. Make sure that you don’t go in over your head.

For the sake of today’s post, I’m going to list the 3 most common sources of passive income and analyze them throughout:

• Real estate. You buy piece a property (condo, home, duplex, etc.) and you rent it out for a profit. Another alternative is to sell the property a brief period down the road in hopes of great home appreciation.
• Create an online product. This can be a simple audio file or an elaborate 50 page eBook on how to lose weight.
• Create a static blog. These have been on the rise lately. They range from static insurance pages to pages with layers of content.

2. Ensure you have the capital needed to begin.

Most reliable sources of passive income will require you to invest some capital ahead of time. The common misconception with passive income is that it is inexpensive to setup. While this can be true in many cases, it doesn’t always hold true. The amount of capital needed will vary greatly in every situation. There will be times where you’ll want to increase your portfolio and you’ll be willing to take on more risk (you invest in real estate). There will also be times where you have more time than money. This is where you can actually focus and pump out passive income products (eBooks, tutorials, etc.).

Now let’s revert back to our 3 common sources of passive income:

• Real estate. This is the most capital intensive passive income opportunity. A piece of real estate will cost you thousands of dollars aside from the actual property (lawyers, broker fees, closing costs, property taxes, etc.).
• Create an online product. The capital needed here varies depending on your skills. For my eBook I plan on outsourcing all of the aesthetics (creating a readable design, cool theme, etc.).
• Setup a static blog. The capital here is very low. You’ll simply have to pay your monthly domain hosting fees. You might have to spend some money to hire someone to update your page.

3. Free up initial time for your new source of passive income.

No matter which passive income route you decide to pursue, you’re going to have to invest some time upfront.  Even a capital-intensive source of passive income like real estate investment will require a heavy time investment. you to research the market, speak with a real estate agent, look for the right property to invest in, find the tenant, review the tenant, etc. The time will add up. There is the possibility of outsourcing the whole process but then that cuts into your share of the passive income.

Once again we will go back to the 3 most popular passive income sources:

• Property investment. Will you have the time to deal with tenants? Before you even have a tenant in the property, you’re going to have to do plenty of work. You’re going to have to search for a specific property, research the area, meet with real estate brokers, meet with a lawyer, and meet with your mortgage provider. Then when you have the keys to the property, you’re going to have to search for a tenant, screen tenants, and check references. Then once the tenant is living in the unit, you’re going to have to be on-call if anything is to happen (or you can hire a property management firm).
• Online product. Can you handle customer service? You need to consider how you’ll deal with customer complaints and follow up.
• Static webpage. Do you have the initial time needed to setup shop? It will take a decent amount of time to get the website running. Once the website is running you may have to update it periodically.

Once you’ve taken care of the three above scenarios, you can focus on creating and maintaining your passive income. Good luck!

In the never-ending quest for passive income, many of us will drop our guards and fall prey for a “too-good-to-be-true” source of passive income. I’m not here to judge anyone because this can honestly happen to the brightest minds out there. We’ve all slipped up. When it comes to riches and making lots of money, it’s easy for our judgment to become clouded.

Today I wanted to point out a few income sources that we should avoid at all costs…

Gambling

From sports to casinos to horses, gambling can make you some decent money, but it could also cost you your life savings. When you know your stuff it may seem like gambling on the outcome will be a sure thing. Unfortunately, it never is. Underdogs win and favorites lose. Anything can happen. You don’t want it to happen with your money.

Hot stocks/Day trading

It seems like my inbox is always filled with emails that are tipping me off with exclusive stock tips. First of all, why would anyone share that type of information? If you had a feeling that a stock was going to sky rocket, why would you tell anybody else? I would personally keep the knowledge to myself and laugh all the way to the bank.

Even if you disregard “hot stocks,” day trading in itself can be a recipe for financial disaster. The time and energy that you will spend on day trading is almost always not worth it. In almost all cases you would be better off getting a full-time job.

Ambiguous investments

Do you ever listen or read a bunch of  high praise for a “secret source” of income? Do you get hooked in with promises of making $576 a day? I must agree that these ads do gauge my interest. They also leave me thinking about how in the world this money will come in. My advice to all of you is that if an investment seems too good to be true, it usually is.

Flipping real estate

This is a controversial item on the list. Some will say it fits perfectly on this list, while others will disagree. There definitely is big money in flipping real estate properties. The reality of it is that you’ll almost surely lose money the first time you try it. Unless you’re really experienced or working with someone really experienced, you should stay away from flipping real estate as a first time source of passive income.

It’s no secret that I’m really curious and interested with earning a passive income. Heck, it’s the reason I started a blog titled, Passive Income Now. By default, my curiosity leads to me asking lots of questions. Well, lots of foolish questions. This ties into a recent conversation I had with an online friend that earns a sustainable amount of passive income monthly. I asked about secrets on passive income opportunities and if he could share any with me. He shared one powerful secret about passive income opportunities that I must absolutely share with you guys:

Most passive income opportunities are active until the point that that 99% of people will give up.

I thought about it for a few minutes. Then I realized that this is completely true. Any passive income opportunity that will earn you any decent money in the long run, will cost you lots of time right now. This is why most passive income chasers give up before they cash in on their passive income.

Think about it. By the time you start earning a substantial passive income from a real estate holding, you would have needed to invest time and money into setting up the unit, screening applicants, and finding the ideal tenant for your unit. If you want to earn a passive income from an eBook, you would have to go through the massive headache of writing the book, formatting it, designing it, and then marketing it. By the time any passive income comes in, months of your life would’ve already gone by. This is why most of us give up when pursuing a passive income opportunity.

Now the million dollar question: how do you not quit pursuing your passive income opportunity?

1. Persistence pays off.

Apparently this is true when going after a passive income opportunity. I couldn’t tell you because I’m still at the persistent stage. I don’t need to tell you this, but almost every success story involves persistence and reaching the point where you want to give up many times. If you fail, then fail fast. Don’t give up after you’ve devoted a significant amount time to a passive income opportunity.

2. Realize that passive income opportunities require focus.

I often hear praise and support for real estate investments as a source of passive income. That’s great and all, but how passive do you think a real estate investment is? Unless you outsource all of your Landlord duties to a property management company, you’ll likely be stuck with lots of work. Who do you think the tenants will call when something breaks down? YOU. Collecting the rent checks may be passive, but all of the other work involved requires focus.

3. Work on your passive income opportunity on the side.

I don’t know how to say this nicely, but it’s very unrealistic to quit your job to build a few passive income streams. This is too far into the world of “get rich quick” and Robert Kiyosaki followers that it makes me sick. If you have a steady income already coming in then you won’t have to stress about generating 6 figures from your side passive income opportunity. A passive income should be just that. Income that comes in on the side. Don’t quit your job. Focus on your passive income on the side.

What is passive income?

Any income that is sustained long after you have put in the necessary effort.

Boring!

Better definition:

A passive income opportunity is any source of money that you get long after you’ve been the bulk of the work.

Sure it is difficult to put in effort into a project when you don’t see any immediate results. This is the major caveat about passive income. You are putting in work TODAY in hopes of seeing results tomorrow.

Before I get too off topic, let’s look at some popular passive income opportunities to see what’s out there:

Create & sell a product online

You can try some simple sources of passive income. Metcafe allows you to create videos and you will be paid if the videos are viewed by a major portion of the visitors. You can also create products with Cafepress and Zazzle. The products range from keychains to coffee mugs and other small items.

If you don’t want to sell an actual physical product online then you can turn to an ebook. Ebooks are gaining more traction as time goes on. Depending on your niche market and your topic, you can pump out a solid ebook that will earn you some decent money over time. Pat from SPI created an ebook and he highlights his journey in great detail on his blog.

Write a book

With a book you will receive about two separate paychecks for an advance payment. Once the book is available on book shelves or through an online distributor (depends on if you self-publish or go with a big company) you will start receiving royalty payments. These little payments will act as passive income for years to come. The more books you write the higher your royalties will be.

Over time the payments could potentially get smaller and smaller but it is an income coming from work that you put in a long time ago.

Purchase an investment that pays dividends/steady cash flows

Stocks pay dividends. Real estate holdings pay rent. Whichever option you decide to go with you will find yourself receiving a steady positive cash flow.

Aside from a little effort and the occasional maintenance, both are valid sources of long term passive income. The greatest benefit of both of these passive income sources is that when you decide to sell you will most likely be returned your principal amount in full.

Of course I could not discuss real estate and stocks without telling you that this is the most dangerous form of passive income. For one it requires a heavy investment of your hard earned money. You also run the risk of loosing the majority of your money.

Which passive income opportunity do you have on your mind?

Note: I will go into detail on all of these passive income/income generating opportunities as this blog continues to grow.