We gave you big list of legitimate passive income ideas, but what are some of the key success factors to build your passive income? The first thing you have to realize is that it is not easy, but there are key factors that will help you build successful passive income streams.
Why is it important to have passive income streams? Your job is not going to be there forever. You can’t work forever. And you can’t retire until you figure out a way to replace income from your job.
7 Key Factors to Build Successful Passive Income Streams
Do what you love. If you hate writing, don’t start a blog or try to write for money! When you are passionate about something, it is much easier to stick to it and become successful, because success takes time and effort, you want to enjoy what you do while you move toward your goal.
Find income ideas that are compatible with who you are and success will inevitably follows.
Focus on what you are good at, or take the time and effort to become proficient. You don’t want to jump into a passive income idea like investing in real estate or stock market investing, unless you have the necessary knowledge to avoid basic mistakes and do relatively well.
No, you don’t have to be the leading expert, but you need to arm yourself with the necessary knowledge and be proficient.
This is especially true when you are leveraging expertise to make extra income. For example, you can’t blog or write about a subject you don’t know, you cannot be a math tutor if you aren’t good at it, and you can’t sell food or recipe for money if you cannot cook!
Don’t expect to see the desired results right away — e.g., this blog was losing money for three months before I earned my first dollar. Building passive income streams take time and effort. For some income, you might see results right away, for others you might have to wait and work at it for a while. Time is your friend when it comes to building passive income streams — start as early as you can and stay in it as long as you can.
Some ideas take more effort than others. For example, investing my money in the stock market doesn’t take that much effort — just contribute the money, set up my asset allocation, research mutual funds and ETFs, invest, rebalance quarterly, and watch my money grow.
On the other hand, some income ideas take a lot of effort, especially initially. For example, this blog consumes about 3 hours a day. And other ideas like, writing a book could take a lot of initial effort before you end up with a marketable product.
Not everything you try will be successful — e.g., my little stint with the bulk candy vending business or real estate investing using the Carlton Sheets method. You may have to try dozens of ideas before you find the one that truly work for you. The important thing is you don’t give up and you keep trying.
Don’t stop at the first thing that works. The whole idea is to have as many passive income streams as you could. You never know when one would dry up — e.g., even the Niagara Falls stopped for a day!
Diversification is a great way to reduce risk, and it’s the best insurance against losing an income stream.
7. Little by Little
The nice thing about diversifying and having a lot of income streams is that little things do add up to a lot. Just like they said, “A dollar here, a dollar there. The savings add up” — in our case it’s the income that adds up.
I personally have several income streams working for me. You can find many of these in the passive income ideas list I shared. I can say with certainty that I have lived by these 7 key success factors in order to get where I am today. Building passive income streams is not something you can do overnight. It takes a lot of time, patience, effort, and the willingness to try again and again despite failures.
The way I see it is that I am planting seeds, or opening doors if you will. Not everything I try will come to fruition, and there won’t be a stampede through every door I open. But over time and across many income streams, the combined effect will snowballed and become increasingly significant.
Well, there you have it — my secret recipe for building successful passive income streams.
Pinyo is the owner of Moolanomy Personal Finance and a Realtor® licensed in Virginia and Maryland. Over the past 20 years, Pinyo has enjoyed a diverse career as an investor, entrepreneur, business executive, educator, financial literacy author, and Realtor®.