Passive Income Generating Strategies
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The 4 primary ways of generating cash flow from passive income
When was the last time you got a check in the mail that wasn't from your current place of work? Chances are it was within the last year. We all, at one time or another, get a rebate check from a product pruchase; or perhaps a tax return from the IRS because we had over paid our personal tax obligation; or maybe it was a birthday check from your Grandmother. How was that for a piece of mail? Pretty awesome, huh?
Well, I'm not talking about those kind of checks. Not that those checks are bad, in fact they're awesome, but they are not the kind of checks that this lens is about. The checks I used in the above example are either, your money that is being returned due to over payment, or money recieved as a gift. The checks that arrive every month (or now-a-days are sometimes deposited right into your bank account), that this lens is focused on are checks generated from a money making asset you have created.
Well, I'm not talking about those kind of checks. Not that those checks are bad, in fact they're awesome, but they are not the kind of checks that this lens is about. The checks I used in the above example are either, your money that is being returned due to over payment, or money recieved as a gift. The checks that arrive every month (or now-a-days are sometimes deposited right into your bank account), that this lens is focused on are checks generated from a money making asset you have created.
My mission
My name is Chip Serkland and I teach, train, and mentor motivated individuals or groups in building their own income generating asset through education, personal growth, and support. My personal area of expertise is with network marketing and I have found this to be the most readily available and fun way of creating an income generating asset. I am also in the process of becoming an options trader in the stock markets, an author of science-fiction novels (I have a degree in creative writing), and will be, at sometime in the future, a real estate investor as well.So; although I am participating in, or gaining knowledge about, 4 different means of creating income generating assets, I can only help you with, and give advice about, building a network marketing business. For writing, trading, and investing all I can do is point you to the resources I personally use to gain knowledge and experience in those income generating endeavours.
The Wellness Entrepreneur's Blog
A journey to the passive accumulation of wealth
I love this blog. It is my most favorite in the world. Um, well okay; yes it is my own blog. (sheepish smile) It is a journal of sorts to share my experiences and knowledge gained as I move closer toward my goals. It is my hope that it entertains as much as it educates.
The latest from Google about the Global Economy
The times; they-are-a-changin'. It is becoming increasingly appearent that to have good financial health in the 21st century one must have some control over their work , i.e. the value, they bring to the marketplace. The global economy has become too fluid and volitile to reasonably expect to have your contributions to the marketplace compensated by an ever increasing amount of money over time.
Economic change now moves with the rapid pace of global commerce. Without some sort of control over our own finances we can easily be run over by market forces, and left to fend for ourselves financially, as these articles suggest.
Economic change now moves with the rapid pace of global commerce. Without some sort of control over our own finances we can easily be run over by market forces, and left to fend for ourselves financially, as these articles suggest.
- Q&A: World Bank's Zoellick on the Global Economy, Euro-Zone Crisis and US ...
- He spent much of that time trying to reorient the bank as the role of developing countries changed in the global economic landscape. Mr. Zoellick, who spent decades working in Republican administrations, is frequently mentioned as a potential Secretary ...
- Cattle Drop as Global Economic Woes May Curb Demand; Hogs Slide
- Cattle futures fell to the lowest in two weeks on speculation that a sluggish global economy will curb demand for commodities. Hog prices dropped for the first time in a week. The Standard & Poor's GSCI Spot Index of 24 raw materials tumbled to the ...
- Japanese Market Down Sharply On Global Economic Concerns
- (RTTNews) - The Japanese stock market got off to a weak start on Thursday with investors indulging in some heavy selling across the board following a weak lead from overseas markets amid mounting worries about the eurozone economy.
- New signs of global slowdown darken analyst's economic outlook
- Among them, China, the world's second-largest economy, registered its seventh straight drop in an important manufacturing index. A slew of data this week suggests that the global economy is slowing down. With the latest reports, a new economic threat ...
Residual Income
Building a business or a network can lead to long term residual income; otherwise known as cash-flow.
Building a business is the most direct and immediate way to begin to create a residual income. Most other ways of earning a residual income are based on investments that require a fair amount of capitol to enter into. Building a business, on the other hand, can be started with very little initial investment. This does not count purchasing an established franchise, such as a restaurant, retail store, or other service provider, because those more traditional brick and mortar businesses require hundreds of thousands of dollars just to get started.
Starting a business on a shoestring can be done if you, the individual, begins making (manufacturing) a product that fills a demand or need within the marketplace. A few examples are toys, clothes, shoes, bags, hats, or accessories of all kinds. Any item that can be hand made in a limited production can be the beginning of the next multi-million dollar business. The size of the business is only determined by the amount of units you can sell.
Starting a business in manufacturing does require a level of expertise, know how, and ambition that may seem out of reach for most people but thankfully there is now a business model that levels the playing field. That business model is direct selling.
Direct selling is just taking someone else's manufactured goods or services and selling them directly to the consumer. This can be very profitable because there is no middle man or system that these goods and services must pass through (each step taking a slice of the profits); all profits can be claimed by you, the seller. The best direct selling companies will also offer training and marketing tools to give anybody with the drive to become successful all the means to become so.
Of all the direct sellers, those that embrace the network marketing business model have some of the best opportunities in the direct selling industry. This is because your efforts are leveraged across a team of business partners that most often support one an other in pursuit of a common goal. Network marketers, it has been said, are in business for themselves but not by themselves. The most successful companies in history have been built around a team of people, each who bring to the table their own experience and expertise. This is the same idea that the network marketing industry operates with.
To create a residual income in the network marketing industry will take time and effort but is the most accessible for individuals when compared along side other business opportunities. It is based on win-win relationships and success only comes after you have helped and served others to attain success for themselves.
A common myth that is spread around the network marketing business model is that it is a pyramid scheme. When Robert Kiyosaki, a successful business builder and investor, is asked this question about pyramid schemes his reply is, "..."that corporations are really pyramid schemes. A corporation has only one person at the top, generally the CEO, and everyone else below. A true network marketing business is the exact opposite of a traditional business model. The network marketing business is designed to bring you to the top not keep you at the bottom. A true network marketing business does not succeed unless it brings people to the top."
Creating a residual income takes commitment and perseverance. Below are some links to give you some resources to look into when thinking of building a business of your own.
- Passive Income: How to Earn More and Work Less
- Do you want to continue working 50, 70, 100 hours a week the rest of your life? Good! Neither do I. Do you want to be able to take time off whenever you want to, without worrying about what's going to happen to your business? So do I! In order to do that, you're going to have to start creating income that is paid consistently over time whether you work or not.
- How to Start Your Own Business - wikiHow
- wikiHow article about How to Start Your Own Business. The simple bare bones basics on getting you own business started and links to many resources with ideas, tips, and tricks.
- For Small Business Grants Look to the States
- Small business grants are closer than you think. In fact, the small business grant you need to start or expand your business may be available right in your own home state. The beauty of living in a free country such as the United States of America is that our government encourages entrepreneurship and small business. State Governments offer many programs and trainings to aid in the growth and development of small business. PLEASE NOTE: if residual income is your goal you must have plans in the beginning to grow your business beyond a small business to that of a large business with over 500 employees.
- Direct Selling Association
- DSA is the national trade association of the leading firms that manufacture and distribute goods and services sold directly to consumers. The Association's mission is 'To protect, serve and promote the effectiveness of member companies and the independent business people they represent. This is a valuable resource to research direct selling and home based business opportunities with stable and ethical companies.
- An example of a network marketing opportunity
- I am creating my passive, or residual income, with a research and development company with proprietary product lines in nutrition, weight management, fitness, and skin care, that utilize the latest technologies and scientific research. There is a minimal start up cost in the form of a product purchase, with no inventory, no accounts payable or receivable, part time effort, and you will be your own boss.
Books on building your own business
Building a business doesn't have to be hard but you have to be commited.
Here is a collection of books that cover the gamut of what it takes to build a successful business. From developing a netwroked sales orginization with a direct seller, to the kinds of opportunities available through franchises, to how to write up a business plan for your idea, each of these books is worth looking into. PLEASE NOTE: if you choose to use an established franchise to create a source of passive income you must move beyond one store or location and build a network of stores across a region. You must employ store managers to run each location while you sit back and collect the checks. This is the most difficult way to achieve a residual inome.
Portfolio Income
How paper assets can bring you passive income through ownership and trades.
A portfolio is made up of various paper assets, like stocks, bonds, mutual funds, and retirement accounts, that are held for one of two reasons; or in some cases both. These assets are held to capture any appreciation in value or to collect dividends. Because these assets are invested in the stock markets, and are subject to the whim of everybody else in those markets, these investments can be the riskiest of all four ways of acquiring passive income.
Just because these investments are the riskiest should not preclude you from investing in the financial markets. First of all there are ways to hedge yourself from the volatility of the markets if you know what you are doing, or if you have someone actively managing your portfolio for you. Secondly; it is the easiest way of investing large amounts of money in a vehicle (the stock markets), that has proven over time to increase in value 100% of the time as long as you are diversified and have a long enough window of time to reach your goals.
I say it is the easiest way of investing because there is no limit to how much money you can put into any one market, fund, or stock. Where as real estate has a finite limit to its quantity and therefore its investment opportunities. The stock markets, on the other hand, are based upon investors sentiment, or perceived value; perhaps we could even call it imagination. Since there is no limit to human perception there is no ceiling or limit to quantity of money we can invest into any one stock.
For the really astute and savvy investor there is also a way to buy insurance on the paper assets that are at the whim of the volatile markets. This so called insurance is made up of policies called options. Option trading was invented in agricultural China many thousands of years ago to protect the farmers by hedging against any catastrophic loss of crops due to unforeseen events out of their control; i.e. weather. Option trading has the perception of being very risky to the uneducated investor. The truth is anyone can learn to utilize options as a means of insuring their other investments in company stocks from catastrophic loss, and even make very good returns on their money while doing so. To properly invest in options one only needs to measure and find an acceptable loss before hand, and thus take away the risk.
The one requirement in using options in your portfolio is that you cannot buy and hold them like stocks or bonds; so you therefore have to manage your portfolio (or have someone manage it for you), every day. It doesn't have to take more than 30 to 60 minutes a day so long as you are consistent and diligent in using good exit strategies and searching for the next trade. It can also be quit fun.
Below are some resources you can use for your education into investing in paper assets such as stocks, bonds, mutual funds, and options.
- Investing for Beginners by Joshua Kennon at About.com
- The investing for beginners site includes articles, resources, lessons, guides, and other information on basic investment ideas such as stocks, bonds, mutual funds, real estate investment trusts, exchange traded funds, wealth management, financial statement analysis, and stock trading. A very comprehensive site on beginning to understand investing in paper assets.
- The Basics: ABC Stock Investing
- Learn the basics (ABC's) of mutual fund and stock market investing including how to do your own stock investment research. This is a good resource to learn the very basics without being sold any thing (well except the banner and google ads and such); without being sold on any particular brokerage, firm, or school.
- Better Trades: Options Made Simple & Education - BetterTrades
- A BetterTrades education is essential to making better trades in the stock market. BetterTrades teaches trading strategies for making better trades and profits. A wealth of information of the definitions, strategies, and tactics in investing.
- Online investment education specializing in options.
- Learn how to make money in an up or down market. Investools is an online educational resource that has some of the best teaching, training, and tools available on the internet for learning high probability option trading and portfolio management.
Books on Investing in Stocks, Bonds, and Options.
Read your way to becoming a successful investor and having a healthy attitude toward money.
The key to becoming a successful investor of paper assets is to begin thinking the way investors think. Where as most people think investing in paper assets is risky, investing is one of the most basic things that the wealthy do that seprerates them from the rest of us. It all starts with the way we think, and we must have a healthy attitude toward money. Jim Rohn put it best when he said, "If you win a million dollars, it's best that you become a millionaire." What he meant by that is a million dollars doesn't make a milionaire; a sound mind, a healthy attitude about money, and positive empowering habits make a millionaire. Here is a selection of recommended reading from Amazon that will help you grow in your knowledge of investing and the attitudes that help grow wealth.
Real Estate Income
Investing in rental properties, commercial or residential, can lead to abundant cash flow if you know what you are doing.
Real Estate investing has been a way of growing wealth for generations. It is a tried and true strategy over time because of two known quantities: the first is the appreciation in value of property, and the second is the cash flow that owned property can generate from renting it for use.
Appreciation of property can be misleading at times due to demand, supply, and perceived market value. We are witnessing now, in our current economy, a devaluation of property due to the inflated market values of the past decade. Just like paper assets in the stock market, property values are at the whim of investors perception (among other reasons as well), and when this sentiment begins to move in the opposite direction it can move quickly and with exaggeration. So over time, with all things being equal, property will appreciate in value but can be volatile in the short term. Please note that appreciation of value does not lead to passive income but it can lead to a source of credit to use toward the purchase of other properties.
The rental income of a property is a source of passive income that can remain steady and keep you in the black as long as it is managed carefully and the goal is to grow and maintain an asset over time. Real estate is a great investment but should not be used as a means of getting rich quick if long term gain is your objective.
Investing in real estate is not the same as "flipping". Investing is putting time and money into a vehicle that will continue to pay you a return for as long as you hold that investment. Flipping is taking a property, putting and/or sub-contracting work in that property, and then selling it for a profit. Flipping does not result in long term passive income, it is just another way to work for a paycheck.
Today, in this down economy, is the perfect time to begin to invest in real estate. Unfortunately the ticket into this game requires large amounts of capitol. I wouldn't recommend this income generating strategy if you need to enter in through zero down, or low money down methods, if you do not already have the means to purchase the same property at the historically accepted 20% down levels. As well, the amount of experience and expertise is much higher with real estate investing than some of these other income generating strategies.
In my view real estate is a safe place to invest your wealth once you have accumulated that wealth. It is a good way to diversify your investment portfolio and earn consistent income through renting out the use of those properties.
- National Real Estate Investor - commercial real estate investing and development
- National Real Estate Investor, NREI, covers commercial real estate news, trends and research pertaining to the office, industrial, retail, hotel and multifamily markets.
- Real Estate Investing Education and Networking at Real Estate Investor .com
- Real estate investing guide to education and networking. Real Estate Investor is FREE! Learn how to invest in real estate investment properties and make money in real estate. This is a content rich site that is based on user content. Network with other real estate investors and learn from their experience.
- Learn How To Invest in Real Estate
- Rate and review real estate investing courses, books, tapes and software, plus free forms and articles. Begin you real estate investing education here.
Books on investing in real estate
Begin your education in real estate investment now so you are ready to grab the opportunity when it presents itself.
So you find your wealth growing and you don't want to sink all of it into the stock markets. Suggested reading for diversifying your wealth while establishing a good source of passive income.
Royalty Income
Intellectual, copyrighted, and resourceful property can be a gold mine but you must first create it, or find it, and then protect it.
Royalty income is the best and safest forms of all passive income because at its heart it is just a vote of confidence or appreciation. For example if you happen to write the next timeless classic country balled that is loved and adored by hundreds of millions of people through out the world....you are set for life! If you create, invent, or find something of value, you can make money on that commodity for as long as people attach a value to it. The value of a created or found commodity is not necessarily affected by the markets, real estate prices, businesses, or networks; it holds worth and value for as long as people want it.
Some of the best examples of royalty income come from music and film. How do you think Elvis, the Beatles, Micheal Jackson, George Lucas, and Steven Spielberg became billionaires? They have a fan base that continues to buy or rent their intellectual creative property again and again and again. Authors of best selling books are also a great example of people who have achieved great wealth through royalty income. Need I say J.K. Rowlings. She was an unemployed mother who began to write a story of magic and muggles, and turned that into a multi-billion dollar empire.
So what is the trick to using royalties as a means of amassing great wealth? 2 things: you must create or find something that people will want (this can sometimes be artificially inflated through advertisements), and you must protect your participation in the creation or finding of it from anyone who may want to capitalize on your efforts.
It is not necessary to be talented or smart to create a commodity that the masses will pay for but you do have to be business savvy. You must recognize earning potential before anyone else. You must also know how to legally protect your property, either intellectual or physical, from infringement and counterfeiting.
A few examples or sources of royalty income are: music, songs, stories, novels, poems, writings, books, guides, jokes, plays, screen plays, films, videos, documentaries, character or acting portrayals, inventions, games; methods, systems, or processes (such as found in software), geographic property that may hold valuable resources such as oil, gas, or minerals, and much, much, more.
There may be a ton of ways to earn royalty income but most hinge on the finicky whims of the public. It is my belief that if you make the decision to excel at one of these methods, and put all your effort in learning everything you may need to know about doing it well; then I believe you can do it. The human mind has extraordinary potential when one makes a commitment to achieve something, but I would not count solely on royalty income if the goal is to retire or become rich. It is most certainly an avenue but an avenue that is paved by the whims and wants of the public.
Buy at AllPosters.com
- Royalties - Wikipedia, the free encyclopedia
- What are royalties? What are they worth? How can you get them? This wiki article does a good job explaining the basics. In a nut shell it is a contract between the distributor and the holder of a valued product (be it intellectual property, creative property, or the licensing of oil or mineral rights), that agrees to pay the provider a percentage of profits for the life of the contract. Are royalties a good source of income? How do you think a southern hillbilly guitarist (no offense meant - I love him), like Elvis become a billion dollar brand?
- How to write a novel in 100 days or less
- Very simplified but full of very good advice, hints, and tips. If you are dedicated and unwavering in your desire to earn royalty income from writing a novel I would suggest you start here.
- How to Write a Song
- Learn how to write a song. From finding the title to a finished lyric and melody. Use hit songs as patterns to write sell-able songs of your own. This site was put together by a talent and legend, Robin Frederick: she is the author of 'Shortcuts to Hit Songwriting: 126 Proven Techniques for Writing Songs That Sell." She has written over 500 songs for TV, record albums, theater and audio products. She is a former Director of A&R for Rhino Records and currently heads the A&R Team at Taxi, the world's leading independent A&R company.
- SoYouWanna make a low-budget movie? | SoYouWanna.com
- SoYouWanna make a low-budget movie? You've got a movie to make. You're busy! So before we waste any of your time, let us tell you whether or not we can help you produce the next Blair Witch Project. For aspiring film makers only: let me say from experience, movie making is one of the most strenuous endeavours ever! Look at it this way - you have to incorporate every form of art known to man. If this does not sway you than good luck and best wishes because a major hit will change your life forever. Just make sure your ready for that change and have a millionaire mindset before your bank account affirms that.
- How to Become an Inventor - Sell Your Inventions - License Your Inventions
- You can become an inventor. In the FabJob Guide to Become an Inventor you will get expert advice to help you become an inventor, patent your inventions, sell your inventions, license your inventions, or manufacture and market your inventions.
Books on creating your own intellectual property.
The most rewarding source of passive income (in my humble opinion).
These books can only scrape off the top of the knowledge iceberg that becomes intellectual property. Creativity and imagination is an asset that can be taught to a class but only cultivated by the individual. You must practice at it. The best thing about being creative and adding value to the creative marketplace is the support one can receive. If you have an idea but currently suck at the development of it, reach out for help. Creative people are very giving and supportive. Set your goal and begin in earnest.
P.S. If you take away just one thing
Please understand that our individual financial health and well being is a concern for all of us (as well as those at the top of the socio-economic ladder - even though most act like it isn't). When people are not well off or financially sound, society as a whole is negatively affected.
It is each of our responsibilities to take a proactive role in our own financial destiny. Whether that is achieved by living below our economic means and saving or investing; or by building an income generating asset to help us through adverse economic situations that are outside our control. We must each build our own financial cushion so that we have the means to add to the value of our society rather than take away. If it is your goal to live a life without financial stress you must make choices that are congruous with that goal and I hope I have given you, my readers, some tools and insight to accomplish just that.
It is each of our responsibilities to take a proactive role in our own financial destiny. Whether that is achieved by living below our economic means and saving or investing; or by building an income generating asset to help us through adverse economic situations that are outside our control. We must each build our own financial cushion so that we have the means to add to the value of our society rather than take away. If it is your goal to live a life without financial stress you must make choices that are congruous with that goal and I hope I have given you, my readers, some tools and insight to accomplish just that.
P.P.S. Here's the link to my site
Do you have a plan to get you through tough economic times? I was laid-off in the fall of 2008 and found an awesome vehicle to attach my dreams and goals to. Visit my site to see what it is that I am doing to ensure my economic success. If you like our plan I'd love to help you achieve your dreams and goals. Once you have an established flow of passive income it will become easier to take advantage of the other strategies I have highlighted in this lens.
It is the start that stops most people, don't let the start stop you!
It is the start that stops most people, don't let the start stop you!
- Global Wellness Opportunity & Storefront
- This is a link to my economic stimulus plan. It will also direct you to my internet store front where you can purchase the best nutritional supplements, targeted fat loss products, and skin care, that utilizes the latest advances in nutritional science and technologies. You can also look into the specific details about the company I represent, the people I work with, and the systems that we use to grow our own income generating assets.
Living a higher and more generous quality of life is nothing more than a decision to do so. Make that decision for yourself, put your goals to paper, and begin with earnest. One step in the right direction is worth 100 years of thinking about it.
Reader Feedback
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Hypersapien
Jan 17, 2012 @ 1:26 pm | delete
- Thanks for the info. I have a lens on generating passive income, and much of what you have here complements the information on my lens. Good work.
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by chipserkland
I'm a Wellness Entrepreneur interested in educating, inspiring, and empowering people to reach for a higher quality of life. This includes physical w... more »
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