Passive
Money
Key to Security
The difference between owning a job and owning a business is
passive money. When income for your business is based solely on
your efforts, you own a job. When income continues into the
business, even when you have taken time off, you own a
business.
Why is a
Passive Income Important?When you own a job, it might be
more accurately said that the business owns you. You know that
if you don't work you don't get paid. Taking time off is not
done lightly. If you take too much time off you not only lose
income but you could potentially also lose customers.
A lengthy illness could wipe you and your family out
financially. With an illness you not only suffer the loss
of income, you can also incur some catastrophic medical bills -
insurance often does not cover all the treatment.
Creating
Passive Money
Having employees is
one way of creating some passive money for yourself. For a home
based business that can be difficult to do and it opens you up
to a wide range of liabilities and burdensome expenses.
With employees you generally need at least 10 before you
can easily take time away from the business. Zoning laws will
normally limit you to the number that you may have working on
from your home.
Finding Independent
Contractors and farming work out to them can be an
effective way of leveraging your time and creating passive
income for yourself. Here the customer pays you and you
pay the independent contractor.
Rental income from
real estate can be a good source of passive money. Each month
you collect your rent from the one time activity of renting the
property. A property management firm can free you from any of
the day to day responsibilities of maintaining the real
estate.
Royalties is still
another source. Most often one thinks of royalties in
terms of books and music. It can be applied to other
products. Software for example.
An Internet business
can also provide you with passive income. Product sales
can be set up on an automated system where the product can be
delivered automatically as in the case of informational
products or by a fulfillment house for physical products.
Network Marketing is
well know for creating passive income. They do so by having
systems that allow you to put your customers on autoship so
that each month their order goes out without your having to do
anything. They also allow you to build an organization that you
can earn overrides on their sales.
Securing
Your Future
By thinking in terms of Passive Money you can build a home
based business that will not only provide you with an income,
but also with security and freedom. A business built with
passive income is also easier to sell. The buyer knows that the
income is not as dependent upon the relationship of the owner
and customer.
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