Why Do You Need To Have a Passive Income Stream?
April 14.
In my previous posts have shared with you how financially blessed I am as early as the first week of April. It was more than I had expected actually. The amount was more than I was told. In fact, it already covered my income goal for April. To think, it was only the first two weeks of April.
Greetings again, my awesome readers and friends. Grateful as I am for the income. I worked for that. At the moment, I am wondering if I can earn as much in May. My goal for May is to increase my income. Also, after May, the school break will start. That means my main source of income as a part-time teacher will cease for at least a couple of months.
That's why it is necessary to have an additional source of income. More importantly, a passive source of income or sources of income for that matter. In this post, I will share with you why do you need to have passive income sources.
What is Passive Income?
I know some of you already know what passive income means. However, for those who don't, here is a definition of passive income from Wikipedia
"Passive income is income that can be earned automatically with minimal labor to earn or maintain. It is called progressive passive income when the earner expends little effort to grow the income. "
A lot of financial gurus would describe passive income as "A way of earning even while you sleep!"
Do you want one? Who doesn't want to earn while sleeping anyway?
Do you need to have a passive income source?
Some people might say,
"I am satisfied with my monthly salary."
or...
"I am running my own online store, and I am happy with my income."
"I earn online as a virtual assistant, and the pay is more than enough for me."
or something like that...
However, all of the above-mentioned sources of income fall under "active income". In an active income, you can only earn money in exchange for goods (selling) or your services (office work, skilled services, etc..). If you don't work, you don't earn.
Biggest Lesson From the Pandemic
Before the pandemic started, I had at least two sources of income. One is my part-time teaching job, and the other is as an independent IT consultant... I had a big network system project for a hospital.
When the pandemic hit, everything stopped. During the summer break, our planned summer programs were canceled. I had no income during that time. To make things worse, the summer break was extended for a couple more months. My emergency fund was depleted in less than three months.
The following year, I was a bit fortunate to join read.cash, and noise.cash. During the summer break, I was earning bitcoin cash. My earnings helped me sustain our needs during those months.
However, I was hospitalized just before the summer break started. I was weak for about a month and I can barely compose an article at that time. My income was way below what I have hoped for. Nevertheless, I was grateful for my income. It was way better than earning nothing.
The Problem?
I was relying on active income. Thus, if I stop working, if I stop writing, I earn nothing. That's the problem with active income. If something happens that inhibits you from working, you will stop earning.
Having a regular 9 to 5 job is not an assurance either. The pandemic has shown that already. A lot of small to medium businesses have closed. Even large corporations have to size down their number of employees.
That's why we all need a passive income stream.
Why is Passive Income Stream Necessary?
With passive income, you don't have to work in order to earn. However, setting up a passive income stream can take time to start. You need to work on it to begin with. But once, you have established it, you will be earning even when you are watching TV or even when sleeping.
How To Build A Passive Income Stream?
There are numerous ways to build a passive income stream. If you can set up more than one, the better. Here are some ideas that I plan to do.
Investment
Investing in the stock market, VUL insurance (insurance with investment), and mutual funds, are just some of the examples where you can invest your money. If you have no knowledge of investing in the stock market, you can invest in mutual funds or VUL insurance.
I have some money invested in the stock market but I'm just letting it sit there for now. Three weeks ago, I signed up for VUL insurance. It will take some time before I can really start earning passively. However, the main advantage of VUL insurance is, that it can cover both your present and future needs. I will share more information about this topic soon.
Content Creation
While writing here in read.cash and similar platforms can earn us money, they are for the short term only. Note that Rusty will give tips on an article no older than three days only. However, some members can give us tips anytime.
If you have your own blog or vlog and you have more than enough content, those content can give you income over the years.
Publishing ebooks can also be a good source of passive income.
Affiliate Marketing/referrals.
With affiliate marketing, you can get paid by referring new customers to buy certain products. Or in the case of writing sites like read.cash, you can earn a certain percentage from the income of members that joined through your referral link.
Rental
If you have a spare room or a house that you can rent out, it can be a good source of passive income.
Cryptocurrency Staking
I am not an expert on this one. But I sure want to learn more about this. Cryptocurrency staking is similar to savings accounts that earn interest.
(Check out: What is Staking? for more details)
These are just the various ways to earn passive income. If you want to know more, check out these sites:
Also if you want to know more about how to earn passive income from your Bitcoin Cash and SmartBCH, check out these writers.
There are a lot more authors who have written about earning BCH both actively and passively, check them out as well.
In Closing
Having passive income streams can give us true financial freedom. This means, we no longer have to work for money, rather we will be using money to earn more money. Thus, instead of working to earn money, we use the money to work for us to earn more money.
May you live a prosperous life.
Thanks for reading
Credits:
All images are from Unsplash
I have talked for many years about the importance of not only having passive income, but having multiple streams of it. I think you are on the right track and have the right attitude about it. Like you said, relying on a paycheck is almost a sure way to arrive at disaster at some point. Because of course there is no guarantee that it will always be available for a variety of reasons. Most of my passive income comes from investments.