Many of us have heard about passive income but are guilty of not knowing exactly what it means, or how we can build passive income. This article aims to cover different types of income and dive a little deeper into passive income through property.
First of all, we need to address what passive income actually means. Passive income is income earned through an asset that requires minimal input. Think of the concept of earning money while you sleep. The asset will produce an income for you whether you spend time on it or not. Passive income can come from one asset or many assets, with wealthy individuals normally having multiple streams of passive income.
Different Ways To Create Passive Income
There are many different ways to create passive income. I have compiled a short list of examples of passive income-producing assets:
🌱 Network marketing – products sold through word of mouth
Stock investment or trading – short term or long term income-producing asset through the stock market
Software – creating software, for example, an app that produces you income when it is bought or used on-going
Education – creating income through publishing a book, producing online courses etc
Affiliate marketing – creating income through promoting other people’s products that are sold by you
Franchising – payment of royalties or passive income by allowing an individual or party to operate their own business using your branding, systems and proven business model
Drop-shipping – generating income through advertising and selling a product that you don’t stock. You act as a middle person between the manufacturer and the purchaser and do not hold any stock or complete the shipping.
Property – is one of the oldest methods to generate passive income. Income can be gained passively through property when the rental income from the property covers all the bills and costs associated with renting the property and leaves you with money left over.
What I Do - Network Marketing
I am currently building my online business in the Network Marketing field.
You’ve probably seen these on your social media feeds: your college friend selling jewelry or skincare, your cousin posting about a travel club, or a coworker offering coaching sessions. If you feel like you’re seeing these more frequently, I agree!
Network Marketing (aka Social Marketing or Multi-level marketing companies (MLMs)) have definitely become increasingly mainstream over the past several years because more and more people are embracing the flexibility these companies offer – being able to work from home (or really from anywhere) and possibly making a full-time salary on part-time hours (with no proverbial ceiling or salary cap).
What Really Is Network Marketing?
Network Marketing is a business model in which an independent consultant or distributor can earn an income by selling a service or products and/or by recruiting other business partners to do the same. I see it like a personal or virtual franchise, without the headache of a brick and mortar store to upkeep.
Something that has come up frequently since I’ve taken up this business: Are these pyramid schemes?
No, MLMs are not pyramid schemes. Pyramid schemes involve recruiting participants and taking their “invested” money (that then filter up the pyramid) without any product or service in exchange. These are illegal. MLMs do encourage recruiting, but they should also offer a legitimate and good product or service – this is the key difference.
To be completely honest, however, I have heard of some MLMs getting into trouble for “pushing” recruitment over products, making them function very much like pyramids schemes – so, as always, it is important to do your research.
Having been involved with our MLM company for over 5 years now, I am 100% confident that this is a genius and potentially lucrative business model. And while I do feel anyone can do this type of business, of course it’s not for everyone.
Things you want to consider:
🌱 What product/service are you interested in selling/sharing about? You may want to consider the market and growth potential, as well.
🌱 What company do you want to align yourself with? Look at their founders, mission, and the business model, including the issues I discussed above about pyramid schemes.
🌱 Which team/leader would you like to join and work with? Your experience can vary widely depending on who your direct teammates are.
🌱 Are you willing to step out of your comfort zone? For the majority of us, business and sales do not come naturally, so you will need to be coachable and get comfortable with being uncomfortable, at least at the beginning. If this is something you are not willing to do, then this may not be the business opportunity for you.
🌱 As mentioned above, if you are not comfortable stepping outside your comfort zone, putting yourself out there, or rebranding yourself, maybe this is not the avenue for you. Notice that I did not say, “if you are not a salesperson,” because none of these companies expect you to be a salesperson. That’s the beauty of this model – if they wanted salespeople, they would have just hired them. The whole point is to find people passionate about the product, service, and business model (which you naturally will be once you experience the benefits and achieve success).
🌱 Taking your work home. At your office or hospital job, it may be possible to leave work at work, so that you can focus on your family and friends. MLMs do blur this line a bit since you are tapping into your everyday network. It may be hard to “switch off” MLM work mode (which some friends might interpret as “pushy”) but managing it is all part of the learning process.
🌱 This will take time. Team members in my company refer to it as the “3-5 year retirement plan,” though it may take longer for many. MLMs are not overnight “get rich quick” plans, so you will have to budget in the time and commitment.
A Final Thought
I am a big believers in this business model done correctly. I’ve seen many people’s lives changed as a result of having their own small businesses through network marketing. These are real people – people I’ve known for years, people I’ve gone on vacations with, and people I am in residency with.
Interestingly, if you had told me I’d be involved in something like this a few years ago. But after doing my research and due diligence, I am obviously glad I gave it a try.
If your interested in finding out more about how I build my business and what I do in my day to day life, then click here to find out more about working with me.
Here are resources I highly recommend for more reading on this topic…
The Business of the 21st Century by Robert T. Kiyosaki