Passive Income Myths & Misconceptions

We would all love to attain a position where we have created an ongoing income that continues without us constantly having to work for it. 

Copious amounts of online ads take advantage of this by offering the promise of effortless ongoing income

The elementary step in developing a long-lasting passive income is to expel some of the myths concerned. 

Here are some of the most common myths about creating a passive online income:

One: Construct a Website, Sit Back & Watch the Cheques Roll in.

Valuable advice from those who have run internet businesses: 

Generating a good living on the Internet requires marketing, customer service and order fulfilment. Either you do it yourself or you need to hire somebody to do it. Whichever way, owning a website and selling your own merchandise is often a considerable contrast to the "lying on the beach while collecting your cheques" appearance.

Two: MLM- Networking Income is Residual Income.

Almost all of the time, a part of the sales pitch in networking is "creating residual income." Although it's possible with MLM, it's exceedingly difficult to maintain. This is why...   

MLM income is built on 3 basic factors: New purchases by retail consumers, the recruitment of new wholesale consumers and the continued purchasing by both groups. To have a continuing "residual" income, you must recruit, train and motivate a significant number of leaders who will then continue the procedure in expanding numbers.

However, often enough, this is not the case.

Instead, top leaders discovered it to be easier to compose a large list of MLM "junkies" who they then take into one program after another. If you stopped joining new programs, you would also diminish your income within just a few months.

Three: Simply Build Your Business & Hire People to Run it for you.

This could work, but often enough it is more of a nightmare than a dream.

Unless you have an adequate amount employees & profits to hire top quality managers, employees are an ongoing headache. If you do manage to build a large enough, profitable enough, business, and if you have the correct nature and personality, then building your business and hiring people to run it is a great idea.

Four: Developing a Passive Income is Simple.

Do not fall for this one, either.

Development of a passive income will take a great amount of stamina. The steps to getting it done aren't hard, but it requires one thing a lot of people won't apply - consistency. If someone does the right thing, day after day, they'll create an ongoing and growing income. If they try today, one day next week, then one day one month later, they will probably never succeed in getting there.

Development of a passive, ongoing, income is worth it. Avoid trusting in these 4 altered realities, be prepared to work and you can achieve an additional income in no time at all. Maintain it long enough and finally, you can retire.

I believe in the dignity of labor, whether with head or hand; that the world owes no man a living but that it owes every man an opportunity to make a living.

John D. Rockefeller

Massive Passive Income: Does Autoblogging Really Work?

 Autoblogging is quite a hot topic these days in t Internet Marketing social circles. In case you have not heard all of the recent buzz and are scratching your head about what autoblogging is, it's a method for creating blogs in a ?set it and forget it' kind of way that have plugins in place to automatically post content daily. This essentially takes much of the labor out of creating unique content and posting daily or even every few days. But, the question of the moment is, does autoblogging work? Can you really generate a ton of passive income just from setting up these little niche blogs and then leaving them to fend for themselves? Here are some things that you might hear about autoblogging:

Autoblogging is nothing but a scam Most likely written either by folks who have tried it and failed, or who simply dismiss the concept out-of-hand because they firmly believe that the only way to blog is by creating unique content daily.

Autoblogging is your gateway to untold Internet Marketing riches At the other end of the spectrum you might hear claims that autoblogging is your ticket to riches and fame. Those messages are most often promulgated by those who are selling an autoblogging product.
The truth about autoblogging lies somewhere in between the idea that autoblogging is a black hat scam, and the idea that you can auto-blog your way to untold wealth. 

With autoblogging you use automated plugins that grab content based on your keywords from RSS feeds, article directories, your own stash of PLR content, and videos. You aggregate all of this content and present it under your chosen category along with adverts that would appeal to the particular audience that you are targeting with your content.

You also need the tools and technology to make setting up and maintaining multiple blogs simple and straightforward. Wordpress is the perfect platform for your auto-blogs because it allows you to host multiple, individual blogs with their own domain names on a single installation of the Wordpress software on your server.

Autoblogging has many moving parts, so it's good to have a proven system to follow to help ensure your chances for success. Trying to patch together a solution and work through trial and error on your own can cost you valuable time and money.

If you follow a proven system and if you are willing to invest some time, thought and strategy on the front end, you can set up an empire of auto-blogs that will generate a healthy stream of passive income for you. If you are serious about getting started building your own autoblogging empire, you must check out Massive Passive Profits, which is a mass deploy autoblogging format that completely automates the creation of Wordpress multi-user blog and feeds them with tons of content.

Author:  Thomas Varughese  courtesy of Amazines.com

http://Thomaskadakkethu.com.

The Path Most Often Taken to Passive Income

It seems that the most common path to generating large passive income streams is to work at a primary job and use your actively earned income to buy assets that generate passive income on a regular basis. The doctor or lawyer could use his income to invest in a medical start-up or buy shares of medical companies he understands such as Johnson & Johnson. Over time, the nature of compounding, dollar cost averaging, and reinvesting dividends will result in his portfolio generating substantial passive income. The downside is that it can take decades to achieve enough to truly improve your standard of living but it is still the surest way to wealth based on the historical performance of business ownership and stocks.

Taxes and Passive Income 
A major advantage of earning passive income in the United States is that it is often taxed more favorably than active income. That may seem unfair, but the idea is that it will give people an incentive to invest in assets that will grow the economy and create jobs. A business owner that works in his company, for instance, would have to pay an extra 15.3% in self-employment payroll taxes compare to someone who merely had a passive interest in the same limited liability company who would pay only income taxes. In other words, the same income earned actively would be taxed at a higher rate than if it were earned passively. f lower taxes and control over your time aren’t incentive to prefer passive income over active income, I don’t know what is.

The easiest way to gain financial independence is to reconfigure your life so that a substantial portion of your income is not actively earned by your labor. Instead, it must come from passive income. In fact, the idea of passive income is closely related to the Berkshire Hathaway model, which I explain in an earlier feature. The basic idea of passive income is that it is money received with little or no effort required to maintain the flow of income once the initial work has been done. Some common examples of passive income are:

    •    Rent from real estate properties
    •    Patent royalties for an invention
    •    Trademark licensing fees for characters or brands you’ve created
    •    Royalties from books, songs, publications, or other original works
    •    Profits from businesses in which you have little or no day-to-day role or responsibility
    •    Earnings from Internet advertisements in a blog or on a website you own
    •    Dividends from stocks, REITs, equity mutual funds, or other equity securities
    •    Interest from owning bonds, certificates of deposit, other other cash and cash equivalents
    •    Pensions
    •    Residual income for a sales person on accounts that are typically renewed automatically such as a sporting goods representative that earns a commission on his accounts, bringing in a few thousand dollars per store per year for servicing the customers once they have been opened

Why You Should Prefer Passive Income to Active Income.


Passive income is attractive because it frees you to spend your time on the things you actually enjoy. A highly successful doctor, lawyer, or publicist, for instance, cannot “inventory” their profits in the words of one well known author. If they want to earn the same amount of money and enjoy the same lifestyle next year  and the year after that, they must continue to work the same number of hours at the same pay rate. Although such a career can provide a fantastic life, it requires far too much sacrifice unless you truly enjoy the daily grind of your chosen profession. Even worse, once you desire to retire, or find yourself unable to work any longer, your income will cease to exist unless you have some form of passive income. In the past, this was accomplished by employee participation in company-sponsored pension plans.

The Two Broad Types of Passive Income 
There are two types of passive income and throughout your career, which ones you focus on will likely depend upon your current financial situation, talents, skills, and personality. The two categories of passive income are:

    1.    Passive income sources that require capital to start, maintain and grow
    2.    Passive income sources that do not require capital to start, maintain, and grow

Those who choose to focus on the first category of passive income will need either family money, funds from investors, or the nerve to borrow large sums by taking on debt to fund the purchase of assets. The easiest to understand is someone who takes out substantial bank loans to build an apartment building or buy rental houses. Although this can turn a very small amount of equity into a large cash flow stream, it is not without risk. When using borrowed money, the margin of safety is much smaller because you can’t absorb the same degree of setback before defaulting and finding your balance sheet obliterated.

Another example of the first category of passive income is someone who has an ownership stake in an operating business such as a factory or furniture store and allows the business to issue debt to fund expansion. The early store managers in Wal-Mart who were allowed to invest before the company went public were in this position.

Large investment portfolios also fall into this category of passive income. If you owned $10,000,000 worth of blue chip stocks, you could reasonably expect dividends of $500,000 per year. Whether or not you spend your days playing golf, painting, or writing the great American novel, you would collect checks as those businesses paid out a portion of their earnings. The problem, of course, is that it takes the ten million to be in that position.

The second category of passive income - that is, passive income sources that do not require capital to start, maintain, and grow - are far better choices for those who want to start out on their own and build a fortune from nothing. They include assets you can create, such as a book, song, patent, trademark, Internet site, recurring commissions, or businesses that earn nearly infinite returns on equity such as a drop-ship ecommerce retailer that has little or no money tied up in operations but still earns profits for the owner.

By Joshua Kennon, About.com Guide

Two Work-From-Home Danger Zones And How To Beat Them Back

True confessions. A few days a week, I go to work in my pajamas. Being a member of the estimated 30 million U.S. workers who ply their trade from home at least once a week, I'm just not required to don my business casual clothing on a daily basis.

However, lately I've begun to consider that, despite the obvious comfort and convenience of flannel, my robe as business-wear might not be the best for my productivity.
Pondering my pj situation got me wondering about what other non-productive work-from-home habits other small business owners might be struggling with.

To find out, I queried and got responses from over 150 small business proprietors, including CPAs, consultants, Web workers, marketing experts, writers, artists and others. While there were dozens of issues brought up, there were a few that stood out. Here are the two most common work-from-home danger zones and some best practices for beating them back.

#1 Danger Zone: Getting distracted by personal items during work time.
Stopping cold in the middle of writing a critical client proposal to meet with the plumber; cleaning out the kitchen cabinets instead of making marketing calls; surfing the net for the newest smartphone apps rather than following up with potential clients. The natural distractions of personal items are all around us when we work at home. While it may not be possible to ignore every home issue that arises, setting clear boundaries around work time is essential to being productive.

Best Practice: Time blocking. The night before, or first thing in the morning, sit down and do an estimated time plan for the day. The time plan should include times to work on key projects and deliverables as well as client work, marketing and social media. If there are personal errands or tasks that need to be done that day, don't do them spontaneously. Instead, set aside a defined time window during the day to get them done. By creating a time plan, you're more likely to follow it and avoid getting taken off course by an unexpected interruption.

"I set some major time goals for how I want to divide up my workday," says Shel Horowitz, author of Guerrilla Marketing Goes Green. Horowitz says he tries to spend set amounts of time each day on billable client hours, writing, email, social media, exercise and office and personal tasks. "Tracking my time has forced me to be much more conscious of what I do all day. I've had to look at the reality that email was swallowing three to four hours a day. Since, I've unsubscribed from about 60 newsletters."

#2 Danger Zone: Rolling out of bed and going straight into the office. I realized that I, like many of my self-employed brethren, had slipped into the bad habit of waking up and going straight onto email, then stopping at some point and eating breakfast, then maybe exercising -- maybe not. Almost all the respondents pointed out that having an inconsistent morning routine and, yes, going to work in pj's, was ultimately bad for their small business.

Best Practice: Institute a morning routine that includes putting on pants or any piece of clothing you haven't slept in. More than 90 percent of the small business owners I surveyed for this post mentioned that putting on real clothes was important to feeling their most productive when working from home.
"The biggest problem with wearing pajamas while working from home is a psychological one," says Andrew Schrage, editor at Money Crashers. "Most people associate pajamas with relaxing, watching TV, and sleep. Thus, pajamas can act as a never-ending temptation to stop working and just relax, which is one of the biggest challenges of working from home."

Schrage says that on the flip side, wearing real clothes puts you in more of an active, working mindset for getting things done.

The other factor mentioned by almost every small business owner who responded was the importance of establishing a consistent morning routine.
"The flexibility of working from home can sometimes alter your sense of urgency to get up and going by 9 a.m.," says Jaclyn Mullen. "But the more organized and structured you start off, the more likely you are to complete your projects on time and without errors."

Try creating a regular routine that includes the time you will get up, the time you will be at your desk and what you plan to do in between (eat breakfast, exercise, shower) and follow it for a week. Make adjustments as needed, but commit yourself to a path of morning rituals that will set you up for the most productive day possible.

What are your work-from-home danger zones? We would love to hear your comments.
This article originally appeared at Xero.com, online accounting software for small business.
Karen Leland is a freelance journalist, best-selling author and president of Sterling Marketing Group where she helps businesses negotiate the wired world of today's media landscape -- social and otherwise. For questions or comments, please contact her at kleland@scgtraining.com.

Passive Income How to Earn More and Work Less

Do you want to continue working 50, 70, 100 hours a week the rest of your life?

Good! Neither do I.

Do you want to be able to take time off whenever you want to, without worrying about what's going to happen to your business?

So do I!

There's a saying in the corporate world: "Don't make yourself irreplaceable. If you can't be replaced, you can't be promoted." As an entrepreneur, this is still true in its own way. Let's think of "being promoted" as earning more and working less. You can raise your prices, but until you can remove yourself from being directly involved in doing the work that generates the income, there's always going to be a limit to how much you can earn, and it can only increase very slowly.

Passive income, on the other hand, is income that does not require your direct involvement. Some kinds of passive income you may be familiar with include owning rental property, royalties on an invention or creative work, and network marketing. If you want to earn more, work less, and have a decent retirement, you're going to have to start creating income streams that do not require your direct involvement. Whether you're just starting your business, or you've been running it a while, the sooner you start thinking about how you are going to shift your business model to create more passive income, the sooner you can achieve personal and financial freedom.

Let's look at two basic types of passive income, and a third type of income that, while technically not passive, is a key strategy for earning more and working less.

Residual Income

Residual income is revenue that occurs over time from work done one time. Some examples include:

• An insurance agent who gets commission every year when a customer renews his policy
• A network marketing or direct sales rep's income from her direct customers when they reorder product every month
• An aerobics instructor who produces a video and sells it at the gyms where she teaches
• A marketing consultant who creates a workbook and sells it in e-book format on the Internet
• A photographer who makes his photos available through a stock photography clearinghouse and gets paid a royalty whenever someone buys one of his images
• A restaurant or retail owner who has grown to the point of hiring a trustworthy manager

As you can see, there are many different ways to generate residual income across a wide variety of businesses. It may be recurring income from the same customers, or the sales of a product to new customers. It may require no personal involvement whatsoever, such as an e-book sold on a web site, or it may require some personal interaction, such as the insurance agent calling the customer to remind them about their renewal and ask them if they want to change any of their coverage. Often, it's something that you can delegate to an assistant.

Note that this is different from merely recurring income. Recurring income may still require your involvement to earn the income, e.g., a coach or consultant on a monthly retainer, or a caterer who delivers lunch every Monday to the local school board. While this "active recurring income" offers welcome stability, it also tends to tie you down, and you still have limits on your earning capacity based on your own personal production capacity.

Leveraged Income

Leveraged income leverages the work of other people to create income for you. Some examples of leveraged income include:

• An e-book author selling her e-book through affiliates who promote the product
• A network marketer who builds a downline and receives commissions on the sales made by people in his downline
• A general contractor who makes a profit margin on the work done by sub-contractors
• Franchising your business model to other entrepreneurs (the ultimate leveraged income)
•  

Again, there are many different models in many different businesses. The key is that you are making money off of other people's labor, rather than primarily your own. Note that leveraged income may or may not also be residual income. When you combine them, that's even better.

Active Leveraged Income

This is a term I use to describe income that requires your direct participation, but that you can make more money by having more people involved. This generally involves a one-time event, such as:

• A seminar or class
• A conference or convention
• Concerts and dance recitals
• Raves and other parties

Although these require your direct participation, your earning potential is much higher than if someone were just paying you a direct hourly rate. Fill a room with 1,000 people paying $50 each and you can cover your facility cost, promotional cost, and staffing fees and still have a nice chunk of change left over.

Applying It

Now is the time to think about how to apply this in your business. Can you create a product that people will buy over and over again? Can you engage others to sell your product? How could you make money off the work of others?

The sooner you answer these questions, the sooner you'll have financial and personal freedom.

From Scott Allen, former About.com Guide