Passive Incomes-What is it and how to achieve it.

All right, this is just some random entry for me to explain the concept of passive income, but i hope you will find the insights useful.

Passive income means money that comes even when you do not work for it. It is income for what you have done. Passive income pay for your initial investment of time and not for the period of time you spend. Which is good or bad, depending on how you perceive it. To be rich, the only way is to gather streams of passive income. Just look at any rich guy and what he does. Examples are property magnates like Donald Trump or stocks guru like Warren Buffett.

All sources of Passive Income can be categorised into 4 main areas:

1. Investments
2. Intellectual Property
3. Real Estate
4. Business

Investments refer to money that you put with people or company or exchanges (say stocks, warrants, forex) and try to make it grow.

Intellectual Property refer to money royalties that comes from products you have created and there is a market demand for it (for example books, songs, even blogs that are paid to post)

Real Estate refers to property or land that you have bought and rented out to people thus earning a rental income

Business refers to the act of selling products (that may or may not be yours) and earning a profit from it (say a florist, shopkeeper, amazon.com and ebay.com)

For our purposes, passive income can be further classified into

1. high capital-intensive entry level
2.low capital-intensive entry level

This means that some opportunities require the person interested in doing it to put in a large amount of money first (say a shopkeeper renting a large shop space costing $10 000 a month). Whereas some are low, (for example blogs like ours that come free, courtesy of great and kind people or websites that buy hosting for $20 a year)

More often than not, it is the higher capital entry level opportunities that make more money ( say a house bought for 1 million and is rented out at $8000 a month).

Hence, it is the higher capital-intensive entry levels stuffs you hear of like real estate, blue chips stocks, forex managed accounts that you want to get into if you want to be really rich. However, and i emphasise, this does not mean low capital entry levels stuff cant make you comfortably rich (just look at bloggers who earn six figures a year like whateverlife.com).

And at the end of the day, you must ask yourself why you are purusing passive income and not be blinded by greed (which may result in bad investment decisions). For example, wanting to be rich to have a happy comfortable life but slogging out and making unhappy decisions in the pursuit of passive income may not be worth it on some people's barometer.

Now on to some ideas and opportunities for passive income with a low capital entry level (which is more realistic to our needs and helps us get the capital required to enter the 'better' high capital entry level stuffs)!!