The idea of passive income can be a tricky concept to grasp. The most important thing to realize is that passive income doesn’t just happen. It’s created! Passive income can be created from a number of different sources. The most common places include, but are not limited to, the stock market, business, real estate and intellectual properties.

Each of those sources varies in how much time, effort and money is needed to create passive income from them. In the stock market you can invest in securities that generate monthly dividend payments. You can create, purchase or invest in a business that is fully operated by employees. In real estate you can purchase a rental property in which the tenants pay rental income each month.

“The key to financial freedom and great wealth is a person’s ability or skill to convert earned income into passive income and/or portfolio income.” – Robert Kiyosaki

Intellectual properties are creations that can be protected by a copyright, patent, trademark, etc. such as music, books, e-books and branding for which royalties are paid for their use. Regardless of where or how the income is generated, the key is making a conscious decision to put in the effort to create it. The simplest way to start is by saving and investing the money earned from a primary job.

No matter how small or little the amount of money saved may seem, it will be the accumulation over time that will make the difference, like a snowball affect. Start with any amount, be disciplined, be consistent, be patient and one investment will lead to another. The creation of passive income is built over time, so the sooner you start to build it, the sooner you will achieve real financial freedom!

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