Everybody understands that when you do some work you get paid. For example when you install a new bathroom, prepare a set of accounts or write an article for a magazine you will be paid a set sum of money for the work done. The payment will likely reflect the time taken and the skill that you have. Therefore, to earn more money you have to either increase the skill you have or work for longer. Increasing your skills involves spending time and so ultimately you can say that the amount you earn depends very much on the amount of time you are able to spend. Therefore, your income is limited by time!
This can also be said for buying and selling goods. The more goods you buy and the more you sell, all of which takes time, will earn you more money. Searching for even more profitable goods and for buyers prepared to pay premium prices also takes time. Therefore there must be a strong attraction for anything that will provide an income on its own!
If you own land, you can rent it out to a farmer who will not only look after the land, but will pay you money for doing so. This is truly passive income. However, it is possible to set up a business that will provide you with passive income on an ongoing basis. You need to put the effort and resources in at the beginning, then sit back and receive the earnings. Or, you can start again and set up another business until it is in a position to start earning – and then keep on repeating this and multiplying the income potential.
The question is – what sort of business will provide this sort of income opportunity? Any business can be built up and the owner then retires to enjoy the fruits of his lifetime labours. A passive income opportunity must be capable of being set up over a reasonably short period of time so that it is in a position where it can be left to generate income.
One such business opportunity can be found within the field of Internet marketing. Many thousands of people make healthy livings using the Internet alone and some make much more. It is not easy and there are a lot of time wasting programs available for high prices, but if you are able to make your way through the maze of marketing hype you will eventually see that it is possible to make money from the Internet that can be considered to be passive income.
Taking the simplest example, if you set up a basic web site with some interesting and informative content such that visitors think twice before hitting the “back” button, you will make some money from pay per click advertisements placed on that web site. The web site is a “passive income generator” – it will earn money (not very much) from the occasional chance visitor. Your challenges will be to:
- Choose the web site subject such that it reflects a sufficiently large group of Internet “buyers” who will be likely to click on advertisements should they happen upon your site; and
- Build sufficient “back-links” to your site that the search engines rank your site and encourage high volumes of visitors.
Beyond this you have very little work to do – perhaps the occasional new content added to the site to keep it fresh – but essentially you are ready to start a new site. You can keep on starting new sites playing the “volume” game and scaling up your passive income opportunities – then retire when hopefully the revenue will continue to keep coming on for many years to come! It is easy in principal but do not underestimate the level of up front work optimising each site for search engines that will be needed. The more of it you do the more future passive income you will receive.
