Frankly, Scarlett, I've never been passive about anything in my life. Why start now? Hold on a second. That's not exactly what I meant.
Enough of the theater allusions, let's nail down what we mean by passive income, bust some myths related to it, and uncover some examples you may want to pursue.
Passive income is any income in which you are not actively involved; a cash stream that requires little daily effort; extra income to supplement or additional security for the future. Sometimes known as "mailbox money", it is systems put in place to produce money so you can frequently step away. And now to address those myths...
5 MYTHS ABOUT PASSIVE INCOME
MYTH #1 Passive income is not taxable.
Though treated differently by the IRS, passive income is most always taxable (depending on your material and active participation).
MYTH #2 As passive income, you can invest in a business but you cannot receive any earnings from that business.
If you do not participate in the operation of the business in which you have invested, the owners can agree to pay you a percentage of the earnings.
MYTH #3 Passive income means getting something for nothing.
Ultimately, passive income involves work-just giving that work upfront (and a little updating and maintenance to keep the passive dollars flowing.)
MYTH #4 Crypto currency exchanges are considered passive income.
They may be exciting, but these exchanges are still taxable and are not considered passive income.
MYTH #5 You must have a business degree (or close to it) to produce more than one income.
All investments of your time and resources require careful scrutiny but even a pre-grad, post-grad, or no-grad can attain a passive income stream.
Here are examples of just a few of the ways you could earn passive income (and trust us when we say, this list just scratches the surface):
- Create a course
- Write an e-book
- Rent out your home (or one room, or a parking space) short-term
- Sell photography on-line
- Lend money to a peer
- Create an App
- Sponsor posts on social media
- Advertise on your car
- Create a blog or U-tube channel
- Rent out useful household items
- Sell designs on-line
- Store people's stuff
- Sell digital products
- Take surveys
- Narrate audio books
- Rate businesses or experiences
- Create a job board
Any of those ideas make your heart beat faster? Does any opportunity sound like it might be worth it to stick your toes in the water and give it a try? Are you closer than you imagined to taking your first steps? Let us know so we can cheer you on as you launch ahead.
If you're already maintaining a successful passive income steam, what did you find to be most beneficial tool in your trek through the process? What advice would you give in the innovation and implementation toward passive income? We'd love to hear from you and, in tandem, applaud you from our desktops!
As always, with this, as in any new endeavor, do your research, seek professional guidance in all tax-related matters, and then enjoy the potential flexibility and freedom of your passive income journey.
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