At some point in our working lives, for many of us, we ponder. “Is this it? Is this all there is to life? To worship the almighty dollar so we can survive another day?” What most will do in this modern economy on a daily basis, is exchange their time for money. The pay that they receive, becomes dependent on how many hours and how efficient of a job they do, or place into their assigned work.
Then at the end of the week or month, they get paid for their efforts and will then spend it however they like. This paycheck to paycheck living, is a reflection of the direct sweat equity that they put in.
For those who are wealthy, or are on the road to becoming wealthy, realize that this process of monetary exchange, is far different. What they’ll do instead, is get their money to work for them, instead of they working for the money.
The Need To Work For A Living
Ones paycheck, the money that they earn, is dependent on they showing up for work on time, and performing the prescribed task of their job. If a day of work is missed, then there’s usually no pay earned.
Another common form of pay, is the monthly salary. This is similar to getting paid hourly, except that the pay rate is set per month, regardless of how many hours are put in during that month.
So overtime pay usually isn’t available, but may be received in a form of a bonus at the end of the year. Most who are in management related positions, work on a salary basis. They will also routinely work more than the usual 40 hours per week, under this arrangement.
Everybody’s Working For The Paycheck
This working for a living, is the common mindset that we’re conditioned to do, to earn a living. It’s instilled into our mindsets when growing up. This is what we witnessed our parents doing, to make a living.
So we’re told to do well in school, get post secondary education, this to get a better paying job, to make a good living. Aptitude and education is beneficial, this to establish a career, that pays more.
Once we accomplish this, then the pressure is shifted to working as hard as we can, this so we can advance up the corporate ladder, to higher ranks within the company, which also increases in pay.
Then finally, we’re let off this “rat-race” treadmill, the handcuffs are taken off, allowing us to retire, and call it a productive career with great accomplishment. We then drift off into the sunset, hoping that our health is okay.
The Vanishing Workforce
In this instant micro-economy that we now live in, as technology is taking over, this concept of trading time for money that our parents once experienced, is no longer realistic.
Although the educational system remains similar, and we still prepare ourselves to get a well paying job, the hopes of lifetime employment with the same organization, no longer exists.
The majority of people, will now typically work for a number of companies during their working lives. There are now massive layoffs, downsizing, and outsourcing that are all too well documented.
The once ironclad “loyalty” from the employer or the company, is now practically nonexistent. As a result, workers are now getting their fingers caught in the spokes, and will experience financial hardship, this because of a shifting unsettled dysfunctional workplace.
Trying To Get Ahead
So how does one get ahead then, in this volatile economy. It’s becoming more difficult if not impossible, to gain any type of financial security let alone accumulate abundance, this when attempting to trade time for money.
The math no longer works. There’s just not enough hours in the work week, so that it can become profitable over the long term. Eventually, there’s a cap that’s placed on ones earning potential, this due to time limitations.
Then merge that with the constantly rising price of consumables, along with rising taxes, which takes a significant chunk of what’s earned. Then most begin to realize, that it’s a no-win situation.
The Need For Passive Income
The key and solution to all this, is the concept of earning passive income. Passive income is defined as earning additional income, without the need of directly working at it hands on.
Passive income, isn’t usually an exchange of your time for money. What’s required, it’s once you initially set up the passive stream of income, it will self generate money.
Methods Of Passive Income
There are several proven methods, to earn this passive income. The best ways include income that’s derived from a small preferably home based business, along with income that’s earned from investments.
Small business income, is money that’s generated from for instance, a website, which is set up once, and then it becomes hands free. It becomes self sufficient, or is operated by someone else.
Passive income earned from investments, is your money working for you, this instead of you working for the money. Depending on the exact type of investment, a rate of return becomes the passive income.
For instance, an example of this are dividends realized from blue chip stocks, interest derived from compound savings, or appreciation from real estate investments.
The Benefits Of Passive Income
The biggest advantage of passive income, is it’s money that’s self generating, regardless of ones efforts. If you don’t bother putting any further time into it, this passive income should still generate money.
You should still be earning the same amount or more, while choosing to set up additional forms of passive income if you want to. Or you can just go to the beach and relax.
Once your money is efficiently and diligently earning you income, while you focus on something else, you’re in effect getting paid twice for your time. You then realize, it’s possible to create more wealth using this strategy.
So it’s recommended, that you focus your attention towards developing and activating multiple streams of income. What doing so does, is it holds the key to your financial freedom.