Building Passive Income: How to Grow Your Non-Salary Income
A small village has no 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 carry 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 at night. His income has doubled, and he works overtime every day so that he can double his income.
Another worker chose to carry two buckets of water during the day, but at night he began to build the water pipes. As one year, two years, and three years passed, the strong worker suffered from physical problems due to long-term overtime and fatigue, and his productivity gradually decreased, causing him to suffer from illnesses; on the contrary, the other worker maintained the same The productivity of two barrels of water per day, and his water pipe was completed, and the water pipe was connected from 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 a bucket to carry water every day. In the short term, they can indeed earn more money and more Overtime pay, but in the long run, your body may not be able to bear it, and there will always be a day when you get old.
Passive income is like building plumbing, and you may not have a dime at first. The initial income is very meager. You have to work hard to accumulate it for a period of time before you may 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 like it’s the antidote to working hell. My definition of financial freedom is: “The monthly passive income is greater than the necessary expenses of life, and there is no need to rely on active income to survive.”
‧Passive income: non-wage income, usually from assets or system exchange income, which is a cumulative income.
‧Active income: labor-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 years old, because the level of passive income at that time completely exceeded my income from working in a foreign 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, taking a second-level wine tasting certificate, and living 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 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 attract you. Whether it’s attracting you to invest in unknown virtual currencies or fund-trading rat clubs, these are things I don’t want to see, because I have made many bad attempts myself.
The process of creating passive income is just like starting a business. You must take stock of your own resources, be familiar with the business model of the market, and establish your own cash flow system. One of the most critical steps is to get yourself out and build a “Money-making system, which is the most important goal in the process of creating passive income.
Is there a time limit for 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 management is needed anymore. In fact, active income comes from the money we exchange for time, while passive income is the income from assets that we create with time or money. Therefore, even with a decent passive income, we still need to manage assets regularly to ensure a stable cash flow.
Compared with active income, the time cost of passive income management assets is lower. It may only take one hour a month to manage assets to create a passive income of 100,000. Simply put, passive income is asset management income.
This article is excerpted 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. Chairman of Taiwan We Media Industry Development Association.
An engineer girl from Taitung who lives in Europe from time to time, graduated from the Institute of Electronics, National Taiwan University, lived and worked in Italy, and worked as a R&D engineer in a well-known American company. She went through the ESBI process of “Rich Dad, Poor Dad” before she was 32 years old:
‧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 the age of 27, received cases at home, and earned 40% from investing in stocks.
‧Entrepreneur (B): Started a digital marketing company at the age of 32.
‧Investor (I): At the age of 25, the monthly income from work and investment exceeds 100,000 yuan; at the age of 28, the monthly passive income is 100,000 yuan; at the age of 29, it exceeds 300,000 yuan; at the age of 30, he bought his first house. At present, three rooms have been purchased and they are operating a homestay in Taitung.
After visiting the world, I found that I have an inseparable love for Taiwan. Through the management of self-media content, I aim to reduce the information gap at home and abroad, and share knowledge about investment and financial management, hoping to help more readers realize 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 the chairman of the Taiwan We-Media Industry Development Association, providing talent training and services for the We-Media industry Vendor resource matching and other services.