How many streams of passive income should you have and why?
The article’s name question is especially relevant for those who want to create extra income and enjoy a good life. So today, we’re going to deal with this question and tell you what additional revenue is in general, as well as why it’s great to think about such an earning option. So let’s get to the point.
Difference between active and passive income
People receive an active revenue when they work here and now. In other words, with the help of their effort.
So proactive earnings are when you work and eat.
As for additional income, the situation is the following: you build up value once, with the help of which you then get paid constantly. The value can be tangible or intellectual. We can give you an example: you spent seven months writing a popular book, and you are continually getting royalties from the sale of the publication.
Besides, supplemental revenue can be defined as a streamlet of money that comes into your bank account, no matter what you do, or maybe you do nothing at all.
Thus, passive earnings are when you work and eat today, tomorrow, the day after, etc.
Why should you create a passive income?
The more your extra proceeds cover your needs, the less you depend on proactive earnings, and the closer you are to financial freedom.
However, if you look at extra proceeds from a practical point of view, you still have to make some effort. It’s vital to control your streams of passive money and be aware of everything. You can’t leave anything on its own, even if, in your opinion, the system is perfectly lined up.
So you will spend 10-20 percent of your working hours on supplemental income. And the rest of the time should ideally be spent creating new sources.
Best passive income streams and why it’s better to have some of them
All sources of supplemental proceeds can be divided into several types:
- bank deposits,
- real estate and valuable property,
- securities and participation in mutual funds,
- creation of intellectual property,
- design and optimization of your own business.
There are thousands of options and ideas for creating a source of supplemental profit in each of these items. So every time you get an offer or come up with a scheme yourself, pay attention to the following: it’s clear and legal.
The more streams of extra money you will have, the more financial freedom you will provide yourself. However, there is one crucial moment you shouldn’t forget: don’t run after easy money and quick profits. Most likely, crooks are operating there. So just be attentive and do everything wisely.