Passive income is an income received on a regular basis, with little effort required to maintain it.
It is that income from any source of sustained income that you earn without any additional work or an investment of money and time now to buy time later.
Have you noticed that some people have time to relax when the world economy is hurting and when others are sweating to work from morning to evening?
These people are wealthy and are making their money work hard for them instead of them working hard for money. Put simply they are profiting from the work of others.
Many business owners and wealthy individuals fall into this category and they actually get paid much more money to work very little. Anybody can create passive income despite of the circumstances.
There is not one or two ways to do it but many. Some people will have to try harder than others, but if you believe you can do it, and you are willing to pay the price, then you will do it.
The main key to financial freedom is through passive income. The more one generates passive income, the more one becomes less and less dependent on his job.
A time comes when the passive income becomes so much that we do not feel the requirement for going to a normal job.
However, it takes some time to develop passive income. One cannot just expect that he will start working right now and will get financial freedom the following year.
This happens only when one is extremely lucky. Hence the right time recommended to start is now. The earlier one put his efforts into earning passive income.
One wonders, how easy is it to create passive income? One way is through real estate. If you invested 50 million into a rental unit, it will take four years and two months to recover the full amount from a monthly rent of one million francs.
After that the house becomes a source of passive income. Perhaps that is a very long time and quite expensive.
Therefore, the importance of multiple streams of passive income. Network marketing is one simple way in which you with almost no initial investment can result into a lifelong source of passive income.
Another simple way is through investment in stocks. Currently one can buy stocks of KCB, a Kenyan bank that operates in many corners of Rwanda.
Soon national brewer and soft drinks maker BRALIRWA will sell part of this shares on the Rwanda Over the counter market giving opportunity to everyone to buy a piece.
This way, as long as the company makes profits and gives dividends, the shareholders keep earning dividends until when they decide to sell their shares which may have appreciated beyond their buying value.
This also calls for due diligence in selecting the right companies to buy into which have a bright future and not just to buy for the sake of it.
The trick however is to start small and focus on stability and with time your passive income will grow and deliver you to financial freedom.