Building Passive Income: How to grow your non-wage income
A small village does not have a water source, so residents often have to go to the river three kilometers away to fetch water. There are two workers whose daily job is to go to the river to bring two buckets of water and sell them to the residents. The daily output value of these two workers is two buckets of water, and they earn wages by selling water.
One of the workers thought, “I want to make more money. I’m so strong, so I have to carry more water!” So he carried two buckets of water during the day and another two buckets of water during the night. His income has doubled and he works overtime every day so he can double his income.
Another worker chose to carry two buckets of water during the day, but began building the water pipes at night. As one year, two years and three years passed, the strong worker suffered from physical problems due to long overtime and fatigue, and his productivity gradually decreased, causing him to suffer from diseases; the other however maintained the same The productivity of two barrels of water per day, and its water pipeline was completed, and the water pipeline was connected by the river to the whole village. From then on, all residents had to pay him for water, and the first worker lost his job.
In the above story of “Carrying the Bucket and the Water Pipe,” the active income earned by office workers by spending time at work every day is like the process of desperately holding onto a bucket to carry water every day. he can actually make more money and more overtime paid, but in the long run your body may not be able to take it and there will always be a day when you get older.
Passive income is like building plumbing, and you may not have a dime at first. Start-up income is very scarce, you have to work hard to build it up over a period of time before you can have income, but you may not have it, so passive income is often more difficult than active income. However, when you build a solid passive income, you can live the life you want.
What is financial freedom? First, understand passive income and active income
What is Financial Freedom? Most of us have heard the term “financial freedom” and it seems to be the antidote to work hell. My definition of financial freedom is: “Your monthly passive income is greater than your living expenses, and you don’t need to rely on your active income to survive.”
‧Passive income: non-wage income, usually from assets or system trading income, which is cumulative income.
‧Active Income: Employment-type income, which is usually earned by using time and labor, and cannot be accumulated for a long time.
After financial freedom, we don’t need to be tied to a fixed time and place, we can choose the life we want according to our personal needs, and even live in different countries. The first time I reached the six-figure threshold of passive income per month was the first time I realized what financial freedom was when I was 28, because the level of passive income at that time completely exceeded my earned income. overseas company.
As the past few years have passed, I have completed many things in my life dream list, including going to Japan to learn skiing, cycling around the island, deep diving in Green Island, learning fashion design, take a Level 2 wine tasting certificate, and live in Europe and America from time to time. The important thing is that I can be with my family at any time, so I am very happy to see that people around me can earn a passive income and achieve financial freedom.
However, there are too many scams out there Those with bad intentions, relying on your desire for early financial freedom, so they use the name of passive income to lure you. Whether it’s enticing you to invest in unknown virtual currencies or rat clubs trading funds, these are things I don’t want to see, because I too have made many wrong attempts.
The process of creating passive income is just like starting a business. You need to take stock of your assets, be familiar with the market’s business model, and establish your cash flow system. One of the most critical steps is to get yourself and build a “money making system,” which is the most important goal in the process of creating passive income.
Is there a time limit on passive income? Will it be permanent? Some people mistakenly think that passive income is fixed income, or that as long as they create passive income, it will be done once and for all and no more management will be needed. In fact, active income comes from money that we exchange over time, while passive income is income from assets that we create with time or money. Therefore, even with decent passive income, we still need to manage assets regularly to ensure stable cash flow.
Compared with active income, the time cost of passive income management activities is lower. It may only take one hour a month to manage activities to create a passive income of 100,000. Simply put, passive income is wealth management income.
This article is from “The Most Important Thing to Create Passive Income” by Fang Zhi Publishing House
Author: Rami
Investment and Wealth Management YouTuber. European and American travel fashion blogger. President of Taiwan We Media Industry Development Association.
An engineer girl from Taitung who occasionally lives in Europe, she graduated from the Institute of Electronics, National Taiwan University, lived and worked in Italy, and worked as an R&D engineer in a well-known American company. She went through the ESBI “Rich Dad, Poor Dad” process before she was 32:
‧Employee (E): At the age of 22, the salary was more than 20,000 yuan, and the monthly salary of foreign businessmen at the age of 26 tripled.
‧Self-Employed (S): Resigned at age 27, received home cases, and made 40% investing in stocks.
‧Entrepreneur (B): Started a digital marketing company at age 32.
‧Investor (I): At the age of 25, the monthly labor and investment income exceeds 100,000 yuan; at the age of 28, the monthly passive income is 100,000 yuan; at the age of 29 exceeds 300,000 yuan; at the age of 30, he bought his first house. At present, three rooms have been purchased and are running a homestay in Taitung.
After visiting the world, I found that I have an inseparable love for Taiwan. Through self-media content management, I aim to narrow the information gap at home and abroad, and share investment and financial management knowledge, hoping to help more readers achieve their life dreams.
Currently, he is the founder of Dongye Digital Marketing, dedicated to self-media worker training, financial planning consulting, corporate brand planning, Internet celebrity alliance marketing and other businesses; he is also president of the Taiwan We-Media Industry Development Association, providing training and talent services for the We-Media industry Supplier resource matching and other services.
