it is Create passive income One of your resolutions for this year? If you answered yes and are new to this type of business, you may not know where to start or what it means to earn this type of income.
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GOBankingRates spoke to a number of passive income experts to learn about the key things you should know before you get started. Follow these tips to earn your first passive income stream in 2023.
Keep the main source of income
Julian Huff The 22-year-old is the founder of Huff Management and has several active and passive income streams. At the age of 18, Huff began investing in the stock market. He said he was very happy when a dividend was paid – even if it was only five cents. Five cents was a new revenue stream for Huff, who says he’s now starting to see dividends paying $20 or more.
Passive income aside, Huff works a full-time corporate job.
“I think it’s important [to understand that] When we talk about different income streams, we don’t mean multiplying your top income stream,” Huff said. “Many people my age want to earn a certain amount of money from their main income and the same amount from a side income, which is possible but not always reasonable at first.”
While earning passive income is different for everyone, this type of income generally doesn’t make you super rich overnight. Some people who plan to create passive income this year may decide to stick with their primary source of income as their passive income increases.
Huff said his initial investments started small, but that didn’t discourage him. Instead, Huff remains consistent as an investor, and that has allowed him to see those dividends start to pay off.
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Start with a strategy
Don’t feel like you need a lot of money to earn passive income. Many passive income streams – like investing, starting a blog or selling an online course – cost very little to get started.
The same can be said for investing in real estate. Teresa Todd, Real Estate Investment Expert and Founder Women’s Real Estate Investors NetworkInvesting in real estate may seem intimidating, but using the right strategy can be a big help, he said.
Todd uses the example of someone who wants to invest in real estate without much initial cash. She said she used the whole process — like handling the process of finding a buyer in a stressful situation — and finding the home at the right price. Part of the wholesaling process involves finding another investor and assigning that person a wholesaling contract and closing the deal at the proprietary company.
Think about what you want to do as a source of passive income. Then think about the strategy you want to use to earn this income. Remember: passive income should require less care and effort than its active income counterpart.
Monetize your skill set
What if you don’t know which type of passive income works best for you and your situation? When in doubt, Huff recommends monetizing your skill set.
“Monetizing your skills is a great way to earn income that doesn’t come directly from your day job,” Huff said.
For example, digital natives can create accounts on platforms like Fiverr and help clients who need help creating social copy or other assets.
Start now
Todd has one regret about making passive income: not starting earlier. If she had known then what she knows now, she would have created many sources of income much sooner in her life.
As a Gen Z, Huff said, it’s important to start building a passive income stream in your twenties.
“Being young gives you a chance to fail and start over without taking a huge loss, because you have time,” Huff said.
Having the advantage of time, energy and youth on your side also allows passive income earners to lead a less stressful life.
“As Gen Xers, we need to empower ourselves by making sure we’re not relying on one source of income,” Huff said. Since 2017, I have seen and read headlines in many publications stating that one source of income is not enough to achieve financial freedom.
Passive income, for many, can be the key to setting yourself on the right path to financial freedom. And Great financial health. If you have questions about starting next month or the next six months, why not make the schedule start this week?
“I have a sense of security every day knowing that if I lose my corporate job because I’m young, I have multiple sources of income and I’m financially literate, so I can wake up and not worry too much,” Huff said.
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This article appeared first GOBankingRates.com: How to make passive income for the first time in 2023