3 Phases of Creating Passive Income
There are many different definitions of passive income that are released by various experts. In general, creating passive income means that once you have spent your time developing and creating a source of income, you should never go back and worry about it again. In theory, that passive stream of income that you have worked so hard for will earn you money in overtime with little or no work on your part. Instead of spending a lot of time maintaining this stream of income, you can devote your valuable hours to creating a new passive source of income or maybe just spending it relaxing and enjoying life.
Anyone who is interested in generating passive income streams must understand the 3 phases that are needed to establish a successful source of income. Here are the 3 high level phases involved.
- Research – One of the most important steps to create passive income is to conduct an appropriate investigation before beginning. This is especially important if you have to spend money to create a source of income. For example, a newcomer may think that he can buy a cheap domain name and a hosting service for a few dollars and in a very short time generate income from a website or blog. An adequate investigation would indicate that generating income from a website or blog of less than a year is extremely difficult but not impossible. Even if the initial costs are $ 0, you must still do your research before you devote your time to a project that may not work.
- Build – Once you have produced your due diligence and are comfortable with creating a particular revenue stream, it is time to build it. This phase could take from a few minutes to several years, depending on the type of passive income opportunity. Writing an affiliate article and publishing it can take 15 minutes of your time when starting a business that you once delivered to a manager could take years. The key here is that you finished phase 1 and trust your choice.
- Maintain – The maintenance phase is where many do not agree with the definition of passive income. Regardless of the passive income streams that you have created, there is some maintenance effort involved in maintaining that opportunity to earn money for you. Even the investment in a certificate of deposit requires you to review new rates and transfer an expired CD to a new one. While the time may be minimal, you must still maintain and nurture your hard work!
Creating passive income streams can be very challenging at times. One should know that not all income streams created will be successful. The key is to recognize what works and what is wrong and use that information advancing for your benefit. Following the 3 phases listed above is a way to put you on the right path to success!