You’ve probably heard (and followed) this absurd myth about how to become “successful” in life:
Go to school, get good grades, find a good job, buy a nice house, drive a nice car, have kids, save up, then retire.
That lie is so deeply rooted in our society that people follow it blindly, never stopping to think whether that path will allow them to live the kind of life they desire. If you’re like me, you’re looking for the kind of life that will bring you freedom. Freedom to travel, freedom to spend time with your loved ones, financial freedom, time freedom, and freedom to spend time doing what excites and interest you. Well, let me tell you, blindly following the beaten path is not going to give you the freedom you want.
One of the ingredients to the freedom lifestyle recipe is to have multiple assets that provide you with income.
Preferably, an asset that creates maximum possible return with minimal time and effort on your part. When you have constant sources of revenue, you have the ability to make investments and start businesses to make even more money (while still being able to pay your bills). When you have available time, you can use that time to create more assets, or choose to do other things that you enjoy. That’s the beauty of freedom.
I’m sure you’ve heard that overused phrase “multiple streams of income” but a “stream” can be anything—and it’s usually a stream of revenue that eats up a significant amount of your valuable time.
Time is, in my opinion, your most valuable resource.
You should set up sources of revenue that will, at least eventually, make money without your input (or with very little of it).
You’re probably thinking “oh, that’s passive income” but no income is truly passive. Every asset needs at least a bit of monitoring, maintenance or updating. What I’m talking about is creating true assets that put money in your pocket every month and take less time than you spend drinking your morning coffee.
The key to growing a self-sustaining asset is automation and outsourcing.
There is absolutely no need for you to handle every aspect of an asset or business. You probably think, “well, no one could possibly handle task X or email Y as well as me”. Here’s the truth: they can handle it well enough that it’s not worth your time. If you spend 10 hours answering customer emails each week, and you could pay a virtual assistant $10 an hour to do that for you, the $100 cost is worth that time you could spend with family or doing something you truly enjoy. Outsource whatever possible to make time for other opportunities.
Automation is easier now than ever before. With endless online platforms and integration options, setting up systems to work while you sleep is more achievable than you think—you just have to learn how (and honestly, you can learn anything on YouTube).
While I’m advocating for creating multiple assets, I do not recommend that you try to create multiple at once. Actually, I recommend that you focus on creating one asset at a time. Each asset will take a decent amount of effort to establish. Do the ground work yourself, and then set up systems (i.e., automation and outsourcing) to handle the workload. Once your asset is creating consistent income and your time is freed up, then focus on the next asset.
So, what kind of assets can you set up, automate or outsource to truly make money while you snooze? The list goes on.
Here are five of my favorite passive assets:
1) REAL ESTATE.
This is probably the most “traditional” passive income asset. People make passive income through real estate primarily by purchasing a property, renting it out, and paying a professional company to maintain the property and manage the lease. If you don’t pay for someone else to manage the rental, that ruins the “passive” part of this income asset. Rent costs cover the mortgage and other costs of owning a property. Even if the rent profit isn’t much, buying at the right time (i.e., buying low) gives you a nice ROI when you sell.
2) E-BOOKS (AND PRINT, TOO).
Ebooks—and books in general—are great because in the modern age of Amazon, they require no capital to publish (except perhaps online marketing). You might be thinking “oh, I don’t know anything to write about” or “no one would buy my book I’m no expert”. Everyone knows something they can write about. I suggest making a list of everything you’re interested in or you know how to do. Usually, when a person is good or natural at something they don’t realize that others struggle with it. And you don’t need to be an expert to teach or advise on a topic. You just need to know more than the reader!
3) ONLINE COURSES.
With growing sites like Udemy, Kajabi, and Skillshare, the online education industry is exploding. There is so much information spread across the internet that most people experience information overwhelm. They are looking for helpful, concise, and actionable courses to teach them about anything from YouTubing to oil painting to wedding make up and everything in between! Now is the perfect time to package what you know (for very little startup cost!) and sell to those longing to learn.
E-commerce includes everything from drop shipping goods from China to selling private-label goods through Amazon FBA. Sometimes this requires a little more upfront costs if you have to purchase the goods before you start selling. But with websites and integrations like Shopify and Printify, it’s easy to automate a store system and to purchase goods after an order is placed. You can even hire a virtual assistant to take care of customer service and order fulfillment. Great way to make a normally labor-intensive asset totally passive!
5) STOCK INVESTMENTS.
Stocks are just as “traditional” as real estate, but require much more upfront capital to begin. Wait until you’re making steady income from other assets to cover living costs and then use your extra “play money” to take on the stock market. The King of the stock market, Warren Buffet, has recommended that new investors put their money into a managed index fund.