Folks, today I’m very happy to present a guest post by By Kristoph Matthews of SmashingEntrepreneur.com – A young entrepreneur’s guide to harnessing passion, ideas and business to live an epic lifestyle.
If you’re reading this you’re probably an investor of some sort. You’ve bought stocks and real estate and are constantly looking for ways to grow your money so that you have more freedom in life. But have you ever thought about how much control you actually have in your financial destiny? Yes, you can analyze an investment based on numbers, trends, and your opinion of the people involved, but in many cases, unless you have a significant share in the investment, your influence is limited. The best you can do is hope that your judgment was right and your investment’s value will increase.
What if instead of trying to predict the future, you took your hard earned cash and put it in your own cash producing vehicle? Something that combines the “set and forget” philosophy of stock investing with the ability to intervene when needed. I’m talking about passive income ideas. Passive income can come from your own business, your intellectual property, your cash-producing real estate, or other vehicles. Usually these things take some time to set up, but can become automated.
What type of passive income should you set up? The vehicle you choose should be based on your passions and talents. See which of the following examples fit:
- Start a business and systematize it. For creative types and problem solvers, this is a no brainer. Once you’ve discovered a product/service that can add value to people, the idea is to put a system in place such that the business doesn’t need you to run it. A good resource for figuring out how to set this up is Michael Gerber’s “The E-myth Revisited.”
- Invest in real estate and produce a positive cash flow. By real estate, I mean houses, buildings, storage units, highway-side billboards, or anything else that’s physical property that can be rented out.
- Build an online marketing machine. This is automation in its purest form. Even if you don’t have a product to sell on the internet, you can identify a hot niche, find “affiliate” products that are selling well, and create a website that markets those products and pays you commissions on those affiliate products.
- Create joint venture partnerships. If you like networking with people, this is for you. Any time you connect two or more people or businesses (who need each other to do business) together, you can take a commission off the value of the deal because you are the deal maker. People have made five- to six-figure monthly incomes just by facilitating one deal.
- Invent for big companies and earn royalties. Because most companies have now set up “open innovation” programs, it’s possible for individuals to approach large businesses and pitch their inventions (even if they’re just on paper) and get paid lifetime royalties. This is a numbers game and can require some patience, but the potential payoff is huge. Read “One Simple Idea” by Stephen Key to learn how to do this.
The message I’m trying to encourage here is to not invest in other people or stocks. Invest in YOU. When you invest in yourself, you’re not just investing in a future income stream—you’re investing in your passion and purpose. Furthermore, you become responsible for your actions. Although the “passive” part of passive income makes it sound like you’re not involved in the business, it’s your responsibility to educate yourself and do what it takes to maintain and grow that income.
With that, my next hot stock tip has the symbol, “YOU.” It’s got infinite potential and it’s going to skyrocket after its IPO. I suggest you get in NOW!.
I tell my students to invest in themselves , but I am suggesting they get an education. Applying my logic to your article, everyone should spend the time to learn about these investments. After learning about them, then invest in the ones they think are their best choices.
I agree krant. I think investing in one’s self is the most important. The better we prepare ourselves for life the more successful we will be.
This is exactly what I am trying to do. I have some investments in real estate which should eventually provide a steady stream of income. I am also starting to build some online revenue sources. This doesn’t take any capital but does take a lot of time.
Interesting post. The technology today makes a lot of this a lot easier. I am constantly amazed by the people who read my blog and order books I have mentioned that I receive a small amount on. I can see how this can turn into a decent passive income stream over time.
For the younger readers I would suggest starting early. Even if you start small it can build over the years. For example, start with one small piece of real estate and learn the ropes.
I’m trying to do the same as well! However, nothing is really passive until its on auto-pilot. Each of those things requires a lot of work, either before or even while the income is flowing.
I sorta agree. I don’t think we invest in us ENOUGH after the normal secondary and college education.
The more we know, the better. That said, there are tons of smarter, more savvy people out there, hence, it depends!
Thanks everyone for your comments. I appreciate you sharing how you’ve decided to invest in yourself. I wanted to echo Financial Samurai’s comment about education- studies have shown that the rich take most of their earned income and spend it on two things: investment and education.
Thanks to MoneyCone for allowing me to write my first guest post here. I’m honored.
Kristoph
Great stock tip, I mean advice! I initially thought this post would be on more education. Investing in setting your own passive income streams and passion, solid advice, thanks!
Totally agree. Improving ourselves such as through continuous education/learning, better health, good relationships with others, etc., always pay a lot of dividends down the road!
Inventing for big companies seems an interesting way to make the business.
These are some great ideas focused around taking initiative yourself towards working for an early retirement rather than waiting for paycheck savings to accumulate interest in a 401k policy. I think the personal satisfaction would be much higher as well given the chance to pursue something of interest to your own personal ideas and fascinations. If it were me and I found a steady income of royalties from a successful big business invention idea that I had, then I most certainly would work towards the second before kicking my shoes off and waiting for each months profit.
I really liked the focus of this article. It’s a wonderful way to take control and invest in something (one) you know. My dad always wanted to be in business for himself because he didn’t like answering to anyone else.
All great tips! I am definitely agreed that investing in one’s self pays constant dividends. Right now I am working on building up intellectual property. Net stop real estate!
No one can take your education away from you. That includes education outside of the classroom. When you have passion for something it’s amazing how much you can learn. Really good article!