Before I even reached my 20s, I was racking up debt. My parents taught me little about money – they said “don’t use credit cards”, but I never really understood why. When I was 19, I graduated from a technical school and was living on my own. I was a small business owner straight out of the gate and struggled to make ends meet at first. I was not good with my money and found myself using my credit card to buy gas or groceries while I waited for more jobs to come in. This was not what I had dreamed life would be like once I graduated! I was working so hard, up to 60 hours a week some weeks – yet I was struggling to pay bills, overtired, and I had no time to do the things I wanted to do.
I knew there had to be a better way.
In my early 20s, I came across terms like “passive income” and “residual income”. Passive income is income that continues to be generated after the initial effort has been expended. Most people have jobs that produce linear income, which is “one-shot” compensation in the form of a fee, wage, commission or salary.
With linear income, you are most likely investing a certain number of hours per week and in return you get paid for those hours. With passive income, once you have built your business and things are running, you continue making money from your initial efforts but you have time to devote to other things.
There are 3 reasons you should be adding passive streams of income to your life!
- Flexibility! This can mean being able to see your kids more during the day, being able to take more vacations as a family, or take a random day off…for me as a mom, I am able to stay home with my son, take him to all of his medical therapies, and I have the flexibility to travel or take days off when I need to without worrying about losing income.
- It can help achieve your goals! I have goals of being debt free, having a robust retirement account, and being able to send my son to college, should he want to go. I also have goals to build a home one day and traveling the world. Passive income can help achieve this!
- Time & money freedom! When you have passive streams of income, you now have more money AND time to invest in other areas. Since it is passive, you are not actively spending your time bringing in that money stream. Can you imagine how you could spend that time to grow your business?? Extra time could also be dedicated to family – bringing in money while spending the afternoon with the kids at the park?? Yes please!!
There are SO many choices when it comes to passive income. Everything from affiliate marketing, to blogging, to creating and selling valuable content, and network marketing. There is something for everyone!
Do you have passive streams of income in your life? What could passive income mean for you?
Latest posts by Jess Foster (see all)
- 3 Reasons to Add Passive Streams of Income to Build Wealth - June 11, 2017