I’ve been following Steve Pavlina’s blog for some time and always learn something of value every time I hit his site. He has been writing about the subject of Passive Income lately and if you haven’t yet visited his site, this is a good time to check it out. Especially if you are interested in the concept of earning Passive Income.
Whether you have a job (active income) now or if you have already cultivated a passive income for yourself, he has something for you. Here’s a teaser and a link to his site for the rest of the discussion.
You Earn Passive Income by Being More Generous
Now that we’ve covered setting your passive income goal and a bit about the mindset of passive income — I hope you enjoyed the humor in the last post — let’s explore the details of how to actually create passive income streams. We’ll start out fairly high-level here and then drill down into the specifics in future posts.
Here are the 3 basic parts of an income generating method:
Notice that these same 3 aspects can be applied to any basic income generation method. When you work at a regular job, for instance, you’re probably going to create and deliver something of value to your employer, and then you receive payment for it.
So what’s different about passive income? The difference stems mainly from the second aspect: how value is delivered.
When you generate active income such as with a regular job, your value delivery is usually done just once. Whatever work output you’ve created gets handed over to your employer.
The same goes for contract work. You do some work for a client (value creation), hand over that work (value delivery), and get paid.
With a passive income strategy, however, the idea is to deliver this value multiple times. Then you get paid multiple times, once for each delivery.
So the heart of a passive income strategy is found mainly in the approach to delivering value.
Passive Value Delivery
The words “passive income” suggest that it’s the third aspect (payment) that defines the difference between passive and active income, but the main differences are usually found in the value delivery methods.
With an active income method, you hand over your work product once and get paid for it once. With a passive income method, your work product is delivered multiple times, and you get paid multiple times.
The passive element means that this value is being delivered without your direct personal effort. So you’re using a method to get your work output into the hands of multiple customers, but you don’t have to be the one personally delivering it. For example, when I publish a new article to my blog, it gets delivered to people all over the world automatically, but I don’t have to personally send it to everyone. The value delivery is automated.
Why Just One Customer?
Now here’s a good question to ask yourself: Why do you only have one customer?
A person with a job is just a business owner who sells to only one customer. If you take a passive income strategy and apply it to just one customer at a time, you have an active income strategy. One boss. One employer. One client at a time.
A person who generates passive income usually prefers to deliver value to multiple customers simultaneously. Another option is to repeatedly deliver value to the same customers over and over, but without having to create that value anew each time. A good example of this would be renting out property that you own. You can generate passive income this way even with a single customer since that customer can keep paying you rent every month.
When people shift from an active income to a passive income mindset, they usually start thinking about how to deliver value to more people. Instead of having just one customer for your work output, why not have 10 customers… or 100… or 1000? Why not have 1,000,000 customers?
How many people are you capable of helping?
Read the entire article here . . . You Earn Passive Income by Being More Generous