Let’s talk about financial freedom because a lot of my students like to ask me questions around this.
One of the most important things to know is this:
Being rich doesn’t necessarily mean you’re financially free. In fact, 95% of people have this misconception.
So the biggest question on financial freedom is about advice on:
- How to create passive income streams,
- The fastest and easiest way to reduce working hours, and
- Still, earn the same amount or more money.
The bottom line is that passive income simply comes from earning money without having to work for it. Meaning you aren’t paid by the hours you put in. There is no direct correlation.
Here’s a simple formula to find out how much income you need to be earning from different passive income ideas in order to be financially free.
So how do you create passive income?
It comes in two ways:
- One is having your investments working for you, and
- Two, having a business working for you.
But the truth is… you want to have BOTH investments and business always working for you.
Want to know why?
Watch this sneak peek video of my free web class, Fastrack To Freedom, to find out:
Two Ways to Make Passive Income
1. Have Investments Work For You
This is one of the passive income ideas that require you to first save some money.
Without saving any money you cannot become financially free, especially on the investment-working-for-you side.
I recommend taking a minimum of 10% of your income and placing it into what I like to call a Financial Freedom Account.
After you save some of it the next thing is you have to use some of it. Take at least 10% from your FFA account and invest it. In other words, people are paying you for the use of your money.
There are all kinds of vehicles: stocks, options, currency exchange, real estate, and a host of other investments.
Pick up any investment book or magazine. Maybe it’s Forbes or Money Magazine. You’re going to see 100 investment opportunity situations there
Now Follow This 3-Step Guide:
- Go with an investment vehicle that resonates with you, what feels good for you and what you like.
- Make sure that vehicle has a decent chance of working well. Ask friends or professionals, do some research. The information is out there for those who really want it.
- If you’re going to do it yourself, you’d better be good at it or you’re going to throw your money away. If you’re going to invest yourself, choose a system that makes sense to you. Or maybe it’s time for a portfolio manager.
Should you go for the high investment returns or the low investment returns?
I would divide my 10% savings for investment.
With some you take manageable risks; the rest is money that cannot be lost at all, period.
If you’re younger, and we’re talking about $100, I would take $50 and put it away into something totally safe with a very small amount of return on it. It covers itself, covers taxes, and it makes five percent.
If you’re not getting a five-percent return on your safe investments, you need to take some of our programs because that’s the low end.
Either way, you choose the system, learn it, do it on paper first (if you can), and then invest that way. Otherwise, you’re going to have to find an investment manager who is doing well.
That’s money working for you. What about a business working for you?
2. Have A Business Work For You
There are passive-income-based businesses. And the key question here to make a business work for you is:
What can you do to your business or future business so you aren’t working in them for 10 hours a day forever?
The keyword is forever because when you first start a business it takes a lot of energy and effort. Ten hours will be your minimum but if you set it up correctly you will be able to spend less time working in the business as you systemize it.
Bottom line, a business system is a repeatable process that produces a profit.
You’re trying to create a system where you build something one time, and it works for you on an ongoing basis, even when you’re not there.
That’s why I love our online business, Harv Eker International. It can do that.
Writing a book and getting royalties, that’s an ongoing thing. If you create an intellectual property and license it to somebody else to use, you get a royalty from that. That goes on without you.
My book Secrets of the Millionaire Mind was published in 2005. A decade later, I’m still getting 5-6 figure checks on just royalties.
Talk about passive income!
You want to look for things that allow you to do something one time, or on one set up. It might take you a week, month, a year, or more, however, then you don’t need to do anything except for maintenance. You could be off on the beach or doing the things you love most and still make money!
Good or good?
Remember, if you can’t set your business up in three years to work without you, you don’t have a passive-income business.Remember, if you can’t set your business up in three years to work without you, you don’t have a passive-income business. Click To Tweet
Now that doesn’t mean you’re never involved at all. You still have to do some work on it, but a whole lot less than what you’re doing now!
What do you think about these passive income ideas? What have your concerns or experiences been with investing? Upsides? Pitfalls? What about experiences in passive-income businesses? Leave a comment below… We want to hear from you!
For Your Freedom,