May 25, 2012

Passive Income Mechanics (How These Systems Work)

Alright entrepreneur men and women. Let's get our arms wrapped around this idea a little more so you can understand more about how to do it yourself. The reason passive income is so sought after is because it will allow you to maintain your current income levels (or earn you more) without you having to do near as much work. Anyone who has been in business for more than a few seconds knows that time is everything.

If you can't find a way to make your time give you the greatest return, passive income is the way to do go. It's not easy, but nothing that is good, is ever easy. It allows you to use your brain to make money. Some really like that idea, but some don't. An easy way to gauge weather you earn money on an active basis or passive one is to ask yourself if your income level would drop if you stopped working for a few weeks. If the answer is yes then you earn primarily active income.

For example, if I own an e-commerce site that makes many sales per day, work still has to be done. I would have to process orders, deal with customers, and keep everything else that goes along with running a site running smoothly. To make it more passive, what I would need to do is take some of these tasks off my plate and train others to do them. The key is to make sure that having them do your work is cost effective. The other thing you need to do is try to automate wherever possible. Try to put things in place once that give you returns over a long period of time.

An actual passive income system is going to be something that gives you answers to questions like: What is going to be delegated? How is it going to scale cost effectively? Hows is the delegation going to be implemented? Once you have a system for earning income, those questions will be answered by your system.

Since we're on the internet right now, lets talk about that for a second. Scaling things with technology is pretty easy and inexpensive for the potential benefits. You can buy more space/processing power at a fairly cheap price and still be able to do a lot. Things go fast on the internet. You are reading this article right now. In order for you to read it (and anyone around the world to), all I had to do was write it once and hit publish. After that, the server keeps it live for me and anyone can go to it whenever they want. Don't underestimate how powerful this is. Think about how I would have to distribute this value of ideas without computer technology. It would take much more effort and probably my own printing press and newspaper following. Instead, I just need a publish button and the ability to type. It's very cheap to distribute and scale.

You may or may not have heard of affiliate programs, such as the one for This is a prime example of how you can outsource all the active work to them through technology. If you deliver a sale through the tracking link, it might feel very passive to you because it's just money going to your bank. All the labor and processing is being done by Amazon so you just have to focus on generating sales and figure out passive ways to do that. Accomplish this and you are on your way real quick. Try to find something that everyone else is not promoting in a network and find programs that offer lifetime commissions and at least 1 year tracking codes.

How to Start

There are a few different options you have at your disposal to start making passive income.
  1. Start your own operation from the bottom up. (will take years and lots of stress, but worth it in the end)
  2. Study ways other successful people have done to earn passive income and copy their methods as best as you can.
  3. Use another system that someone else made (that will take some cash up front, but could pay off)
  4. Combine one or all of these ideas.
I have tried every single one of these methods in order to end up where I am at now. It took a ton of time and patience to work through each thing and I didn't really know what I was doing until I was able to look back on it. Different things will determine your ability to do these things. It might trip you up if you don't have any financing. Additionally, lack of experience or desire to put the time in will hurt your efforts. Finally, the last main trip up may be time. Sometimes there is just no time to start any of this. Again, that is all time efficiency and your current constraints from a job, family, or what have you.

Keep in mind that if you are new to the internet and building systems, that is alright. You don't have to know how to build it from nothing. It works the same way as when you use a computer It doesn't require the knowledge of how to code in order to use a computer because there are base systems put in place that allow a user to use the computer with ease.

What Should You Pay For

My first few months online, I decided that I had to spend money to make money. That is true to an extent, but you have to know what you are spending your money on and what the risk/reward is of doing something. I thought I could just through a few thousand dollars at this and it would work out great. I soon learned that there are a lot of systems out there that don't really help internet marketers much. I payed for clicks that led to generic affiliate pages, paid for advertising in other forms, even paid to sign up for affiliate programs (never pay to sign up to an affiliate program), and bought all kinds of marketing tools.

None of it paid off a penny so I got really stingy and decided to not spend money on anything. As a result of that I missed out on a few really good opportunities that would have helped me a lot back then. Eventually, I figured out what I actually had to spend money on in order to make things work. I had to spend money on tools that were essential to do anything. The first thing I spent money on that gave me a return was when I signed up for web hosting and built my first website.

This taught me a lot about what I needed to know for growing an online business and allowed me to leverage the web hosting system tools to make money. Generally, if you spend money on something, make sure the source that is providing you the system is really trying to help you and actually provides some sort of use that you know you need to have.

Right now you are learning about what is necessary and not necessary to pay for in order to get started. You may be interested in what I would pay for right now. Now-a-days my money goes to things that I think can really help me implement new streams of income and also teach me something new. Always be thinking about what you can learn from doing something new. Everything has a price, weather it is time or money, and some things are worth paying for, while others are not.

SiteGround Blog Hosting

This is a solution I have been promoting ever since I was enlightened to it. They use lots of new technology and always stay up to date with what website owners need in order to be successful. This is one company that you can use to help make your work turn into passive earnings rather than active ones. Another key benefit that do is offer education. No other website hosting provider and content management system will give you this sort of education. Knowledge is power in anything. The more you know, the less you can screw up. With them, you can create a blog through Wordpress, make an e-commerce website, or even get your own dedicated server for hosting.

Webmasters are always sharing new ideas and experiments that they have been working on, quite like I am doing with this series. The cool thing is you can get access to hundreds of different ideas to better help you find something of your own to work on and put them together into your own creation on a blog that you run. It is not very expensive to do and the rewards can be great. (Earnings of over $30,000 per month. It takes work and creativity though.

As far as start-up capital goes, they charge less a year than what I spend a month on hosting costs. That is a very good deal for new webmasters to take advantage of. This system also makes it very easy to scale your efforts. If you plan on eventually having multiple websites (most webmasters do), BlueHost gives you the ability to do this with ease. 

Another really good reason to try out this web hosting provider is if you're full of ideas that you want to share. Instead of constantly posting different random things to your Facebook page or telling anyone who will listen to you, share it on a blog where you can get paid for sharing what you know. In order to best set up an online income money making system, make the most of what technology can provide for you. This is simply the best tool you can start with. 

Other Passive Income Systems

There are a million different other things I can push to you that might help you make a residual income online and could also benefit me financially. In the interest of fairness and my sincere care for whoever reads this, I won't cloud your mind with random crap. Instead I will give you some helpful hints and tools that can be used as you like for free. Remember to gain knowledge and the income will come if you are able to learn the right things. That's why you are here. The only things that actually works offline for the individual investor is what I talked about above and Real Estate. It is a slow and steady process that pays off in the long run.

So you have the real estate market and the internet marketing business. Buying properties at a low price and selling them for a higher one is what people with lots of money do. You can get involved with this if you have 20k - 30k to spend on your first property. If you have millions, it is much easier to get a really good deal.

One of the biggest things you need to know if you want to start collecting rental income is people. Build relationships with the people that deal in this market. Know the attorneys in your area and find out who the big players are in the market. When you make friends with these people and cultivate relationships, it can help you learn the business better as well as get great deals on properties. 

Finding the right connection and information fastest will allow you to get in and scoop up rentals for a good price that allows you a good return on investment. It's all about building. Eventually, you could own 10 properties and pay for those 10 properties with the income from 7 of them. that means the rent from the other 3 are pure profit and you have made a passive income system.

What Passive Income Systems Would You Like To Use?

The primary reason this post was written was for you to think about they type of system you want to use for yourself. Whatever you decide to do should be something that fits your strengths. That means you need to define what you are good at and figure out a method of delivery. To start creating your own passive income stream, think about how you want to do it. Are you going to create a website that generates income? Do you want to develop your own products and have others sell it on their website? Are you leaning toward doing a combination of these things? Do you want to invest in real estate? or Having you thought about something completely unique and different from anything mentioned?

Going back to your strengths, the best way to start a system is find out what you are really good at and make that what you base your work on. Then define your weaknesses and figure out how you can delegate those tasks/needs to people who are strong in your weaknesses. I think my strength is delivering valuable content in some form or another by means of the internet. Another strength I have is seeing the vision of what something can be in the future. Based on that, I have developed this blog and other websites that only rely on content creation (and a little leg work) to make passive income.

A weakness that I have would be writing code and building a website from nothing and designing templates. Since I can't do that, I rely on finding the right content management systems to fit what I need to do. I pay for those systems because they fill in what I am not good at so all that shows is strength with the system created.

The easiest way to get started is to borrow someone else's system that has already been created and see how you can implement it in the real world so it starts making money for you. Developing everything from scratch can take you years and lots of time where you can't really spend it making money on other things. Start snooping around the pages at the top of this site to see how you can make a start to your future income platform and see what you can learn. It might help to feel things out a bit so you get a better idea of what ways they can enhance your weaknesses. Their able to provide many new and innovated tools that will get you on the right track from the start. You will know what you have to spend money on and what things don't require any money at all.

Next Post in Series: Build Passive Income without Forcing It

Outdoor Wood Furniture

Alright people. This post is going to be a tiny break from the series that I have been writing for the past month. Like the title says, it's about high grade wood furniture. Over the past few weeks, one thing I have been researching and diving into is the high-end Eucalyptus wood products that are available. This stuff is really cool, but definitely expensive.

You may be wondering why I am writing about this. That's good because we will both figure that out when I am done writing. If you have been planning on upgrading your deck, patio, or pool side sitting area, wood is the way to go. One of the biggest things I was surprised by was that there are actually wooden hammocks. The frames are made of steel or wood, but the crazy part is that the actually hammock bedding is also made from wood.

They type of wood that I am talking about is very strong and the grain is tight. The cost comes in because of that, combined with the pretty grain colors that you get to see. Who knows that kinds of benefits you may see if you setup a really cool outdoor dining set or even just getting some cool looking wooden chairs. The modern and traditional stuff that is out on the market right now looks elegant and unique.

There is also something to say about the natural wood. It goes great with warm summer nights. Now you see what I am trying to get out. Don't underestimate the power of your resting and lounging time. This is highly essential for anyone. In order to assure you are giving your body enough down time, having a good outdoor patio setup is necessary. It gets you and the family outside more often, which is healthy.

Being outside more helps you breath in more pure air as well as giving you a chance to soak up the environment. One of the main places that I have found to be a good resource is this site about wooden chairs and hammocks. Some of these things look really cool and desirable to any person that loves wood furniture. If you have a lot of Adirondack chairs and various types of seating solutions that are plastic, they probably break a lot. By buying some type of natural high-end wood chairs, you are getting durability that lasts 5 times as long as plastic. Besides lasting much longer, it looks much better.

Obviously you can buy whatever type of furniture you want for you pool or patio, but the bottom line is that there are benefits for buying expensive stuff if you are getting the value with it. You get what you pay for. Either get quality, or don't bother.

Update: I have shut down chairosity and no long promote wood furniture.

May 23, 2012

Can Everyone Earn a Passive Income?

Here is a common idea that may come up when you are thinking about taking the plunge into earning income in a passive way. You might think: Can everyone earn passive income and society still function? Will there be people who make their money by doing jobs that society needs in order to function? Will anyone pick up trash, dig ditches, be a doctor, or work at tough/dirty jobs?

The simple answer is that everything is a market and there is supply and demand. When the demand for jobs goes down (hence a lot of people start making money by their own doing with having to work at a day job), that means that price companies and the public are willing to pay to have people do these jobs will go up. When jobs pay a lot more, more people will be willing to do them to get ahead faster.

It's all a cycle. In a world where many people earn passive income, it would just mean a lot of generosity. As the previous post explains, generosity allows you to make money easily. A lot of value would be provided and people would be thinking of very creative ideas about how to provide and deliver value in ways that allows them to make a passive income. Who knows what kinds of things would be created in the wake of more people earning residual income streams rather than active ones.

It would most likely result in better and different types of jobs for people to do that better align with their core beliefs, whatever they may be. The bottom line is that useful stuff and value would be getting created at an abundant level. Just like Google provides so much free information in an organized way, our society would be able to provide the same concept if the majority of people were earning passive incomes.

Another effect of this process could be a more healthy economy and lowering of prices. As we become able to produce value at more efficient costs, the savings should get spread down to the customer because companies know in the long run that is best to sustain their business. The money would be flowing like crazy in this situation.

Overall, if more people earned a passive income, I don't think society would crumble. The marketplace will always work itself out and a balance would hit. People may be getting paid $150/hour to be a school cafeteria cook or to work at a garbage pick up company. When the average folks are making that kind of money, it flows more easily and allows the overall economy to get into a more healthy state of being.

Next Post in Series: Passive Income Mechanics (How These Systems Work)

May 18, 2012

Being Generous Will Allow You to Earn Passive Income

The past few posts in this series have been about the mindset you have to have before setting out to make passive income and a lot about setting goals. Now we are finally getting into the specific ways to start doing this for yourself and what I will be using with the stream I am working on myself.

There are basically 3 main high-level concepts you should grasp and take hold of. They are:
  • Creating Value
  • Delivering the value
  • Payment
Those things should sound familiar to anyone who has tried to earn money at any point in their life doing anything. If you worked odd jobs when you were a teenager, how did you go about that? First, you had to do something that someone else needed you to do. That is providing the value. Then, if you did a good job, you got paid, or should be paid. The actual creation of the types of value that you offered when you were a teenager may have been limited and not unique. 

If you decided to get a full-time job at any point in your life, you know exactly how generating income works. You provide some sort of value to a company and they pay you for it. Chances are that 99% of the time they will make a lot more money off of you, compared to how much it costs them to pay you. If you were paid 100% of the value you provided, any company would go bankrupt. 

There is one key difference between passive income generation and working at a job for money. It has to do with how this value is delivered. At a job, the company you work for offers a product, service, or both. The company delivers that value by having their workers work. The delivery method would be you dealing with the customers or whoever is using up the value that the company provides. 

In a passive income situation, you yourself have to create some sort of value and then find a way to deliver it so that you reap all the benefits of the provided value. Instead of 70% of the benefits you provide going to company profits that you don't see, the profit generated from you providing direct value all goes to you. In this way, passive income can be much more lucrative then a job if you know how to deliver your value correctly. 

Delivering Passive Value

The first time you ever read about passive income, you probably thought it was mainly about the third factor "payment". The truth is that the main difference between active income and passive income is more about how you deliver value. Are you delivering the value straight to customers by yourself or are you delivering value through a company and giving all of your value to the company you work for so they can sell it/you and make more money?

Generally, when you create a passive income stream, you provide value once and can get paid for it many times over instead of just once as if you were making money on salary or hourly. To get on the right track, you want to automate the way you deliver value to others.

For example, when I write a post on this blog once, it gets seen around the world many times over for years and years to come. Maybe even centuries if we can keep generating electricity. I create something once and it has residual effects for as long as it is up. That is the essence of what you have to do. There are balances within that type of system, which mean you may develop something that is partly active and partly passive. For example, if I made an e-commerce store over the course of a few months, it would make sales for me over the course of years to come. While it is up, the work that I would have to do or pay someone to do is process orders, unless there is a way to automate that as well.

Do You Only Have One Client? (your boss)

If you think about it, a person with a job is basically just a business owner who provides services to only one customer (the company they are working for). You are selling your abilities to only one entity. What you need to do is find out how you can sell your value to more customers at the same time. 

If you own a house or rental property of some sort, this is a way you can make passive income from just 1 customer. They pay you the rent, you pay mortgage and bills. If there is money left, which there should be if you are smart, then you get to keep it. Again, you could scale this up and have many customers paying you rent each month. People that like to think about passive income opportunities rather than active income ones, will be focused on how to provide simultaneous value to many different customers/clients/people.

Think about how many people in this world you could help by using your skills?

How to Scale in Business

This is key because you have to learn the proper way to grow. This is how you make your first huge jump in income. Note that it is very hard to scale up your business if you only work for one employer and have one job. The only way to scale up is getting more jobs. At some point, you can't physically get any more jobs and you will have no way to make more money with your time.

When thinking about making a passive income, there are lots of options at your disposal. The trick is to leverage your value. The beauty of this is selling the same value multiple times to different people. Think about what you do for a living or what you are good at. Chances are that there are going to be ways to provide this value to more people and set up a situation where you get paid for more customers. 

Now you see how important the delivery factor is. You just need to figure out how to deliver the value in a way that allows you to reap all the benefits of the sale or profit. 

The Jump to Passive Work

Here is one example of a million that are possible: If you are a software writer, you could get a contract with a company (your employer) and build the software for them. They pay you a set amount and end of story. How do you transform this value deliver into passive income? Set up a site that sells your own software. That way you can sell the same software to potentially hundreds of thousands of companies. Instead of working once to get paid once, you work once and get paid for a long time monthly.

If you work as an accountant, you could sell your services to an employer for a yearly salary and be at their disposal, or you could write about the way to do accounting best and sell this in the form of a book, e-guide, or DVD series. Do the work once and get paid for what you know over the long hull. 

Here is how a smart employer does business. He/She takes your work that you have generated and learns to apply it to long-term passive income streams. The way an employer does it is by knowing what channels he/she can leverage the work you do into.

Sales are what drive any business. However you cut it, this is the food a business needs to stay alive. If you think of yourself as a separate business, that means you won't be able to eat well if you only have one customer you are selling to. Get lots of customers to use the value you are able to create and provide in order to get lots of food (sales). 

The most successful online marketers are those that have been able to generate multiple income streams that simultaneous provide them with streams of money on a monthly basis. They have figured out how to leverage the value they can provide in a way that is cost effective to deliver to multiple customers. Start figuring out what you can provide and then scale it up like this.

Be Generous with Your Value

This is the title of this post. The main point is that you have to be willing to give a lot of your value away in order to see what people will pay for it. Someone with only one job could be labeled as selfish in this sense. They are only providing there value to one customer or client (the boss). Basically, in a world of billions, you are helping a few people with your value. At most 100, but probably not much more depending on your role in the company. Note that I mean the people you are working for as the people you provide value to. The customers you deal with are reaping the value of the company you are working for through you. There is a difference.

Don't think of yourself as being "loyal" by only helping out your employer with your value. This is just a limited mindset. It might be used against you because your employer could be using the work you do in passive income streams without you even knowing about it. Why not create those same delivery methods that your employer has been doing and earn the full amount of what you are worth.

People who concentrate on making passive income always want to share more. They want to share their value with as many people (potential customers) as possible. This is good for their streams and allows them to help a lot of people. 

The way this world works may sound harsh, but it is fair and balanced. People will only pay for what they are getting and you are worth what you can provide. This worth get dwindled if you work for an employer who sells your value in passive activities. All society wants from you is what you can provide of value. Figure out a good delivery method and you are all set. 

Don't worry, there will be more posts in this series coming up about how to actually find good delivery methods. The action you can do right now is start thinking about the specific value that your provide right now. It may not be what your actual job is and if you don't have a job, think about why people like to hang around you or what things really interest you. After you have done that, start to process ways that others may be able to use the value you are able to offer. 

Sharing your value and being generous with what you are able to provide will be the catalyst of your income growth going forward.

Next Post in Series: Can Everyone Earn Passive Income?

May 13, 2012

How to Make Sales

Alright, if you have been following this series on passive income, we are now getting to the heart of this information. Let's talk about how to make sales. This is key because one of the primary sources of your residual stream of money will be getting generated through sales. What you need to know first is how to make sales in general and then how to make sales online.

The first and most important thing is building a relationship with the customer. The first way to do this is develop a brand that people trust. This can take many months and usually years to do. If you can get to the trusted brand stage in any business model, that means you have the perception of good value. People will have an idea about what you sell or what you are all about and the word will spread very quickly.

A brand has to be established and planned from the very beginning. This is the essence of trying to get long term sales in any market you could ever go in. Become the best practices authority in your niche. People buy from places they trust. Nobody is going to trust something they have never heard of.

The next major factor in determining your ability to succeed with online passive income is going to be word of mouth. If you decide to start a website, it is going to have to be easily sharable with others on the internet. That is the backbone of growth in the online world. Being able to get others to want to share what you are about is very important.

For example, if you decide to build a site that has its primary monetization by way of ad revenue, you want to be writing posts that are interesting to read and give some type of value to whoever you want to read it. If they think it is worth sharing, your site will go very far. Over time it will get a perception of what it pours out to the public. You are in control of everything from the structure of posts to how the website actually looks and feels. To help you build a brand, make sure there are a lot of different aspects that all flow together in order to create the feeling you want people to have when they view the value you are offering.

This is true for anything at some level. I guess one exception could be day trading, but if you want to build your own investment firm that specializes in certain risk capital investments, it is necessary to build a perception about your firm's abilities to the public. If you are just trading by yourself, it doesn't require much work at making a brand. The one thing I would say though, is try to develop a feel for how you think of your own abilities and making these trading decisions. If you can truly get yourself to buy into what you are doing, it will lead to confidence and better results.

My Own Passive Income Venture Update

I have started a new venture in the online world for my new passive income stream that I will be talking about in the weeks to come. I am not ready to give out the name of it or much detail in how I started everything yet, but soon enough the details will be given. The reason why I shared that with you is because one thing that is being done currently is the brand strategy.

This means thinking about what the logos are going to be and what types of niche products the site is going to focus on selling. Hint: that means it is going to be an e-commerce site, which means no ad revenue. It is solely going to be about selling certain types of products. Everything about the site needs to flow and one thing that I have to do is get each aspect to gel together and feel like one thing. That one thing is the perceived value and trust factor of first landing on the website.

The reason why all that is important is because people who I get to land at the website for the first time need to immediately get a certain feeling that they have toward what the brand is and what types of products are offered. This is one of the first things anyone thinks about when shopping for stuff. To make sure you maximize your sales, it is necessary to make certain each visitor knows what types of things you offer. Being good at that means using certain colors and knowing how things make people feel.

Next Post In Series: Being Generous Will Allow You to Make Passive Income

May 10, 2012

Committing to The Passive Income Goal You Set

Alright, so at this point in the series, anyone still reading should have an idea of what their goal is as far as making a certain amount of passive income by a certain time. You should have been thinking about what your goal was in the Monthly Passive Income Goal post.

(Note, I have already listed one strategy I am doing to create a flow of income without barely any time at all by trading binary options contracts.)

But, let's get down to the important material of this post. It is going to help continue your growth into a person that knows how to make passive income and what to do first. This is all about making your connection to the goal that you set in the above post stronger. Once you are able to have a goal that you feel a real connection with, instead of thinking of it as imaginary or something that "might happen someday", things start to become more clear.

Get Your Goal Out in the Open

This just means put down the achievement you are seeking on a paper or on your computer desktop background. Write it out in a way that kind of tells the universe what you want and what you intend to do. The main thing is getting the ideas going that you actually intend to make into reality. The first step to making things into a reality is saying them out loud and writing them out. Try to have it somewhere where you can see it a lot. Once you say something enough in your mind, it helps you start thinking about ways of how to make it truth.

Based on what I personally said my passive goal was from the last post, a good statement that would fit for me would be:

Currently, I am making a successful passive income stream by October 31, 2012 that will create about $1,500 per month. This stream will last for at least 15 years and will result from doing things that help other people around the world and in my immediate circle of friends.

Now it's your turn. Make one of those statements for you and get it out in the open. I took that statement and pasted it into a word document. Then simply blew up the font and printed it out so I can have it sitting on my desk everyday. One way or the other, I will be reminded of it in my subconscious daily. The goal won't fade. Instead it will become more concrete and when I do things that align with it, I will feel a positive feeling.

One thing I did at the end of my own goal statement was add a little bit for how I would like to imprint the world with the goal. Everyone is different and you can add something unique to yours that fits your purpose in life or aligns with how you want to live. One thing you don't want to do is sacrifice your beliefs for making passive income. Instead, make the income in a way that follows what you believe. If you don't really know what that is right now, start figuring out what you truly believe for yourself.

Here is why the time has to be taken to commit to your goal. Most people drop their goals in a few days or weeks and let them fade. You don't want to lose the passion and fire you had when you first started thinking about making a passive income. Things come along in your life everyday that may distract you from what you decided you wanted. Doing the step above will help keep your attention on the end result and how to get their.Don't let things fizzle out. You have to give your goal daily acknowledgement just like you would give a person food to survive.

Keep Yourself In Check with Consequences

If you don't follow through on something that you knew would have to be done in order to get yourself closer to reaching your goal, have a consequence for yourself that you know will have an impact. If you really like to watch a certain television show, don't let yourself watch it if you know you have been slacking or didn't do something towards getting passive income. (LOL, I made myself read this and am editing it now before I go ball and play Magic tonight). This is something I do constantly. I don't let myself do fun stuff that I really enjoy like playing basketball or Magic the Gathering unless I have done the work I need to do. This was very important in the early going and still keeps me in check and in line.

I am currently blogging to all of you about my own goals for this and have a little bit of accountability already. This may make it a little easier for me to keep site of everything and have more of a consequence for giving up or failing at what I set out to do.

The key point here is to make sure there is some kind of control set up that impacts you negatively for failure or slacking. If there is nothing to keep you from quitting, it is a bad thing. If you put a lot of things in place to keep you from giving up, going forward will be easier.

Everyone has a different way of doing this because it is very personal. By refusing to do it, there is an extremely good chance that you are not committed. Not being committed makes it hurt less if you do fail. If you plan on making this work, it won't be a big deal to you to have some harsh consequences for not following through.

Think about how badly you don't want to suffer the consequences you set up for yourself. This alone is sometimes highly motivating to people, even more so then the benefits of feeling successful. Some people will enjoy avoiding this so much that it pushes them to succeed in order for them to avoid failure at all costs. By honing in your focus on success in this way, things may run more smoothly.

Also, don't you think that the positive drive for passive income would have been enough to allow you to achieve it by now or else you probably would have already. Ever since this site was created I have recommended using your own unique ideas as a method of getting money to come into your life.You could have been working on that years ago. Why didn't you? It all has to do with motivations and what you are willing to make happen. That is what I am trying to help you with as we speak because it is the most important thing when making a real attempt at this.

Let me ask you a question. Have you been interested in this goal for a long time? Now that you have finally said you are going to do it for sure and have a concrete path for what to do, why should anyone believe you are actually going to do it? Do you yourself believe you are going to do it? Maybe you are just being confident in order to convince yourself.

If the only consequence you allow yourself to suffer if you give up is going back to your old reality, that isn't much of a stopper. It is the path of least resistance and usually human beings will tend to go towards that path. Nobody wants to do the thing that is harder, will take more time, and might be a lot of resistance. This could even be resistance to yourself. So, you must make the path of resistance greater if you go back compared to what it will be if you go forward with your goal to make money from this.

Get some type of motivating thing behind you. Maybe you can find the person that doubts you the most. Make a bet with that person as to your ability to achieve the goal you set for yourself. I sort of did this and it ended up pushing me all the way through college. Whatever you do, make sure it is something that is far nastier then you going forward. Doing this can give you an upper hand in the amount of progress you make compared to what you have been able to make in the past.

Another good one is donating money to the politician that you hate the most. Everyone has some political party or figure that they hate a lot. If you fail, make yourself donate money to them, and make it a good amount of your current yearly income. If you don't make any money at all right now, make yourself work at a terrible job in order to donate money to something you hate as the consequence of giving up on passive income.

Individuals that are truly committed shouldn't have to worry about their consequence for failure or fizzling out because they know they will make it and it is not even a chance they will go backward. That is true confidence.

Get People Involved

Here is another strategic factor that will help you raise the level of commitment. When doing this, you don't want to completely focus on the competitive side. Instead, it can be more helpful and beneficial to focus on teamwork and a want for everyone involved with you to succeed as well as yourself. I am definitely doing this. It is more fun when you can see others succeed as you do and then everyone can push forward and benefit.

By doing this, you maximize the level of support and accountability for yourself to make sure you are working to complete your goal. By me writing this series, it is a good way to involved others around me and create an atmosphere of sharing and working together to achieve success. There are even residual effects of writing this series. Other people can benefit from it in different ways for years to come and if they stumble across it, it may spur them to do whatever they have always wanted to do but never could get the courage to jump in.

Another good benefit of creating this blog series is allowing myself to have the greatest chance for success. I already feel the benefits of it and it is making me feel better about achieving the goal I have in mind and following through. It makes it more fun when multiple people care about what happens with this rather then doing it completely by myself and not talking about how it goes.

This is going to be a lot of work to share each step along the way, but it is more fulfilling because it brings in the social aspect. That creates more fun for me and everyone involved. Another thing that it does is give me power and steam to keep going myself. Think about all this kind of pressure that I have created for myself. Some say that pressure creates diamonds. Let's hope that that is true. Have you yourself found some ways to do this in your own way that will keep you moving forward each week.

It is going to be interesting to share with you how my new adventure is going to turn out. There are already things starting to be put in motion that I will begin to share. The timeline looks good in my opinion for things to work out in the new stream I am working on.

Weird Thing About Stress

Too much stress is not good because it can have negative health impacts. If you have too little stress in your life, it can also be a bad thing. By finding a happy medium in your life where there is adequate amounts of stress that keep you motivated to do things, it creates something called eustress.

Start thinking about the things that will keep your commitment level high. What consequences are you going to make that keep you from going backward? How will you be able to make sure your goals to fizzle away? These questions should be answered in a timely manner. Doing this keeps you out of the dangerous stress levels where everything piles up at once and you basically can't do everything.

Be a little impulsive and get the ideas you have out on paper. Failure can happen so easily if you skip the process laid out in this post. By making it easy to lull back into your old life that doesn't include what you really want, it is going to be really easy to just go back to it with no real move towards the goal you have set.

So far in this series, we have done a lot of emotional building and getting a solid base. However, I bet you want to get into the how-to part. This is actually the start of the how-to part. You needed to take the action of putting up your goal in a place that you can see it and think of ideas to keep you motivated when things are tough or money is not coming in as fast as you thought it would. All of this information that has been included in the series so far is designed to get you into the habit of taking actions. That is the only real way to see results. Do something and see how it affects your goal.

This whole thing is not really designed to show people the steps to make a passive income. It has been talked about a million times. The main problem of why nobody can do it is because they don't have the right mindset or motivations. This series is all about getting people to a position where they can actually start a new passive income stream. It is not a "how-to" as much as it is a "do". My intention is for you to make money in a passive way. It is not to show you the steps.

It is alright if you just want to keep reading for fun, but don't drag down those who are doers. From here on out, you should be following this series with action steps in mind of what you can actually do. The magic trick or key to all of this is creating work for yourself that turns into results that last. The trick behind doing that is keeping yourself motivating. That is what these last few posts I have written are about, especially this one.

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May 4, 2012

First Strategy for New Income Stream

As you might have been reading, I have been building a passive income series and how you readers can create a new stream with me. Now let's get into the how-to part of this series. I will be explaining a new strategy to generate a new stream. This is something that anyone can do but will take a little bit of start up cash.

This is something that really doesn't take much effort so I would call it a semi-passive strategy. It is trading binary options. I spent about 20 hours online learning about this a few weeks ago and now am going to start doing it a little bit. First I will explain how it works or the mechanics of it and then I will try to show you how to increase your chances of making a good amount of money with little amounts of capital risk. Capital risk is just how much money an option contract cost to buy on a given date with a limited amount of time for the underlying asset that it represents to hit a certain strike price.

With options, you trade contracts that control your ability to buy or sell 100 shares of a stock at a certain price. There are different risk levels depending on how much you are willing to wager and what type of rewards you are willing to chase after. Some say this is rich mans betting. I agree with that to some extent, but if you put in some good research and keep a level head, investing in this tool can provide you crazy amounts of passive income.

Call Options

Options works in a fairly simple way. There are these things called expiration's. When an option comes do, it is the day of expiration. Let me back up for a second. There are calls and puts. A call is what you be on if you think a stock will go  up. When you actually do the transaction with your trade broker, you will do a "Buy to Open" That means you are buying a contract that someone else is selling. If you "buy to open" a call option, that means you are calling that a stock hits a certain price. The price that a given option contract is for is called the strike price.

For example, if a stock price is at $40 from some company, you can buy a call option that expires on the 3rd Friday of a given month (monthly expiration) with a strike price of $42/share. If the stock price goes up to $43/share then the option contract(s) that you bought will be worth $100/contract on the day of expiration. That is because a "call options contract" says that you have the right to buy 100 shares of the actual stock at the strike price. In this case, 1 contract would allow you to buy 100 shares of the given company at $42/share. The value in the cost of the contract is based on this value. The value goes down to 0 or worthless if the stock never goes up to a call options' strike price.

The market price for a call option depends on the time it has until the expiration date hits. The expiration date is the day that the option has to be exercises. If it is out of the money, then the option contracts would all be worth nothing. For example, in the above situation, if the stock price went down anywhere below $42/share that would mean that you have the right with that options contract to buy the stock at $42/share. Obviously you would rather just buy the lower priced market value of the stock at that point.

Put Options

Those are "calls". Now lets talk a little bit about "Puts". A Put contract basically allows you to make money when the stock market price of a company goes down. It works the same way as calls but is just the opposite. Let's talk about the same situation above. Say a company's stock price is at $40/share. If you have a feeling that this price is going to go down to say $35/share within a month, you would want to buy a Put contract that expires somewhere around the date that you think the price will be around that $35 dollar target.

You could "Buy to Open" a put options contract that expires at the end of the month that has a strike price of $38. If the stock price goes down below $38, that option you bought has real value and is worth 100 times that dollar value up or down from the strike price. That value is the contract cost. You can use around $1000 to buy and sell these contracts without having to exercise them, which would take a great deal more amount of money.

How To Make Passive Income with This Type of Investing

I would tell you to focus on long-term contracts. It is possible to buy and sell contracts that don't expire for 6 months out and even years out. The hardest thing about trading stock options is knowing what the stock price is going to do, just as you have to struggle when buying an actual stock. The added risk with options results because if a stock goes up or down in the wrong direction that you need it to go, an option's contract will be worth nothing, which means you lose your entire investment or the "premium" it cost to buy the contracts. Since there is this huge risk of loss, the risk for reward is much higher than if you were to buy regular stocks.

You should do some deep research and figure out a direction that some company is going in. If you have a good idea, go ahead and buy a long-term put or call option that have far out expiration dates. This makes your money much safer and still gives you a chance to get big gains over the course of a year. You can buy options with really far out of the money strike prices in the hopes that a stock price will greatly increase or decrease within the time frame of the options contract and get close to those strike prices.

This is what I am going to do. I have a few good insights on some companies. What I will do is take about $1,000 that I can afford to lose and buy some deep out of the money call and put options. If the stock I am watching goes up or down 35% to 40% within the next year, the value of the contracts I buy in a few weeks could go up from being worth $1000 to being worth $8000 when the date comes up. If I do this 5 or 6 times, which may take a total of 12 to 20 hours of work for the whole year, I could possibly earn $40,000. This would result in me risking a few grand and only a few days of work to make as much  money as someone would make during the course of a year working at a full-time job. You can do this if you make the right decisions.

Here is why this is not so risky. You have to realize that stock prices rise and fall over a given period. If you can buy the calls and puts when they cost the least and sell them when they are most valuable, depending on the stock price rising and falling, all it takes is a few trades a year with a few thousand dollars to make $30k - $40k per year. I am talking about doing this starting out with only $1,000 bucks. It is possible, but you have to get your money on the right side of the market. Try to get a really good feel for what a stock is going to do within the next year.

Something you should never do is buy an option contract just before earnings are released for a given quarter. That is too risky and you are just betting at that point. To hedge this risk, you could buy a put and call on the same strike price of an options contract that is going into earnings. That may result in you hitting big one way and making up all the losses that you incur with the valueless contract by collecting gains on the contract that went big.

If you want to test out option trading for yourself, I recommend the two option brokers found on my how to invest/trade post.. They offer a good binary option trading platform. If you have done any of this type of trading before, you know that it is all about the platform and how easily you can buy and sell the contracts speedily.

If you want to sign up with a trading broker, the only ones that I actively recommend and think are good for Forex Trading can be found on this page about Forex Investing. Note that you can buy and sell options contracts that are based on currency prices. The same concepts apply.

Next Post In Series: Committing to the Passive Income Goal You Set

May 1, 2012

Monthly Passive Income Goal

This is going to be very important to do. For anyone who has aspirations to generate this type of money, they need to figure out exactly how they are going to start out and a plan on how to continue working. As we move forward, the next logical step will be setting your goal for how much passive income you would like to have per month. By doing this, we are making a segway into the how-to part of all this.

Alright, so why are you reading this series still? Are you doing it for pure entertainment value or do you feel like it is something you are saving to do sometime later? Is this a task that you want to start soon and do you want to create at least one stream of passive income for yourself? Answer that right now.

If you want to know what to think from this point down, set a little goal. After you conclude reading this post, develop a goal or figure out what you wish to extract from reading this. If you are deciding to go through the rest of the content here, don't let yourself close the browser or move to another page. Set your goal.

Don't go weak sauce on me now. Keep yourself from saying "well, I just want to make more money". This is no time for wishy washy inconsistent and indecisive thinking. Don't say you will think about it later or you just don't know right now. By avoiding goal setting at this stage, you are going to waste a ton of time. Trust me, you will.

To help you out a little bit, if you have a goal that includes finding a passive income stream for yourself, be sure to include these three things:

1. Write down a number of the amount of passive income that you want to make from your new stream per month. Don't think it, write it down.

2. The length of time this stream will work for you.

3. Write down a date (deadline) for when you want to get your first payment from this stream.

Keep in mind what we are talking about is not the ultimate goal, so make sure you know what that will be. The three things just mentioned are more for getting you started, or if you have done this before, the goal should be to improve your next stream.

If you have thought of your goal of what you want to get out of this series and it doesn't involve the 3 metrics listed above, then maybe what you have thought of is best for you. At the end of this year, you can see how your goal is working for you and also watch all the other people that have started growing their own income streams. Decide for yourself what will be most fulfilling at the end of the day. Lazy will not be rewarded, but hard and self directed work will be highly rewarded.

The purpose and reasons for setting your first goal is for motivation and to get you thinking about how to start taking some actions. Make sure you have a believable goal and not something like, I want to make $10,000,000,000 in my first year.

Glad to see you are still reading. Here is a good piece of advice. Don't let yourself believe that you can't generate passive income. The truth of that matter is that you could take $200 and put it into a free interest bearing bank account and earn a small amount of residual income. It is not impossible to start out. Just set the goal.

One key factor to note is that setting goals for yourself takes practice and is a skill. You want to be able to set things up so they are not impossible. You want to feel some success instead of chasing impossible goals that you know will be as likely as traveling faster than the speed of light. It takes some trial and error to figure out what is a good goal to shoot for. Just calibrate yourself and figure out what will keep you working and feeling like you are getting somewhere.

The First Passive Income That I Made

When I was a little kid my mom had us children put money in a savings account and there was some interest gained there. It was very small, but it was something. From there, I didn't develop another residual income that was passive until I really got into the online world. Here is how it started for me. I did this search "residual income opportunity" on the Bing search engine. From there, it was about 10 months until I made my first commission. It was from an affiliate program that the company Trusted Health Products was running. I honestly can't remember why I joined them or how I had found them, but it was just something I had done along my quest for finding out how to make money online.

If you are reading this, you will be years ahead of where I was when I started. That time you save by gaining experiential knowledge from me is huge and can be the difference between failure or success.

Anyway, I signed up for their affiliate program, which is a deal where I promote their products and each sale I make, I get a commission for. This was not passive though. Here is where the kicker comes in (the passive part). Trusted Health Products also had a sub-affiliate tier based commission structure. What that meant was that I could refer someone to them and if that person joined the affiliate program and was able to sell their health products, I would make 5% on each sale that the person made that I had signed up for them.

It took that person 8 months to start making money for me. Once he started, he never stopped. The first 6 months after he made his first sale, I averaged $200/month off of his work. I did absolutely nothing to earn that money accept get him signed up, which was pure luck. It is still making me a monthly income every month for no work from me.

Sometimes when you start working online, it is best to try different things and make sure you work hard. If you do this, you may get lucky like I did and get this type of deal and even something much better. The harder you work, the better your chances are. All I did to sign him up was just put up a free site and put up a few links of affiliate programs that anyone could join. I promoted that free site on some link network that I can't remember the name of. (I know you all want to know what it was called). The guy just happened to see my site and he clicked through my affiliate link and started selling those health products under me via my affiliate link. The rest is history.

This income sustained me while I searched for jobs, had no jobs, and developed my much larger income streams from and Now those are my two main projects that make me plenty of free cash flow and cost very little to maintain and manage. I will say that it took over a few years to get everything up and running. I can't tell you how many hours I had to put in without a single paycheck. What I learned was that if you keep working the right way and can gain traction in what you are doing so that growth is possible over time, it can become highly rewarding financially and emotionally.

Having the Right Time Scale Perspective

Would it be worth it to you to work for 6 months straight in order to get paid $10,000 over the next 10 years. The answer to that is no. You can get way more out of 6 months of work if you know how to work. Only making $10,000 over a 10 year period from that amount of work could easily be dwarfed by a million other activities. Now, if you had 100 different streams that were all producing that income, it may be more worth it to you. That's $1,000,000 bucks, which far and away pays for a decent size house and could sustain a family for that amount of time. The name of the game is reward over time for a set amount of work.

Have this long-term perspective, but know where you are at and what is possible for you at the start. You should not expect to get a huge sum of money at the start. Instead, spend your first 8 months developing and learning how to create the streams in an effective way that is sustainable for you.

I feel like the ease that I can develop new streams is amazing compared to what it was like when I first started or what it would have been like trying to do this 15 years ago. There are so many tools and options that are at your disposal. It is only a matter of you getting yourself into position to use them. The position that I worked myself into took a lot of hard work over years and it was necessary to get here. If you want to speed that up, just learn as much as you can and start experimenting with different things and seeing what you like the best and what works the best.

By the end of this year, if you have $75 a month coming in, I feel like that would be a really good start. Another benefit you have that I didn't is someone to help and explain things along the way *me*. That value is worth more than you can know. The power of your cellular phone has probably got 50 times the power of a computer had back in the day. All it takes is work. Everything is available at your finger tips. Teach yourself how to make meaningful work for yourself to do that has tangible results over time and accomplishes something.

For the most part, everyone around me said I have to get a job and there is no way to survive doing what you want to do for a living. Those people are now living paycheck to paycheck still and not saying the same things that they used to. Think of me as an emotional support and also someone who knows how to make passive income happen for anyone. I will encourage these activities that the masses say can't work because I know the potential.

While your goals mature, be patient. You won't take over the world in a week. It is going to take time and effort on your part to learn and do. It doesn't just all come to you at once and sometimes as you learn more and more, it may cloud your overall vision. Don't be afraid to step back and evaluate what you have done so far. It is good to plan out what you want to do and have exit strategies as well. There is a lot to learn in this field. You could not learn everything within a lifetime, but you can learn the things that are essential to get off the ground.

My Goal For New Passive Income Stream

If you read the first few posts of this series, you will see that I have said I want to create a new stream along with anyone else who is reading this. It helps re-affirm the possibilities and can create some more joy for myself as well as something to work on. I like building things. My plan is already started, I have a partner, and we are slowly getting into the swing of things. It should start producing results within a few months if we can get a few things done that are still up in the air. I won't share what this stream is yet, but I will soon.

So you know I told you a bunch of stuff about how important it is to set a goal. Now I will do that same process for myself. Here is mine:

My goal is to make a brand new income stream that generates at least $2500/month by October 31, 2012 and lasts for at least 7 years.

Multiply that out and it means earning about $210,000 in the next 7 years on top of what I am already doing.

Here is why I picked that goal. I have been doing this for years now and I feel confident that for me it is possible and achievable. Since I already have made a few strong income streams, it is not out of the question that the next one I have under construction will be able to get where my goal is.

It is really good to have a specific type of goal for what you want to do. By doing it, the thought process switches from "how do I start" to "what do I start doing first". You just need to get your mind reeling and see what comes to you, but have a little bit of pressure to end up doing something that can make your goal possible.

The balance between letting your mind work and actually doing something is tough to master, but will help you get to where you want to be in the future. If I don't make the deadline I set in the goal, that is fine. The next step would be to set up a new deadline and go from there. This is going to be a slow process that I want to share in depth with you people out there so you see everything that goes into making this work and so you can do it along with me.

While I work to set up this potential passive income stream, it will not be all I work on. It is just going to be the only one I talk about. Others will be in the works as well that are completely separate from it.

Go Now and Do It

Alright fellow entrepreneurs, you have not finished reading this freeken post until you have set a goal. Get it written down and have it where you can easily access it daily. If you still have not done so write it out. Don't read anymore until you do this.

Here is the kicker. Once you have a good working goal to go off of, try to put it where your fellow peers or the random public can see it. That is good to get you talking about what you are doing with others and it may spur some ideas to help you. Try and get it in front of people that will encourage you rather than put you down.

Today, in this post I shared my goal. That is concrete and whoever reads this will more then likely want to see me accomplish it for the educational purposes and for their own benefit. If people read how I just did it from scratch, maybe they can go and try it. By reaching the goal, it will give much more excitement to this series and help others greatly. Making $2500 extra bucks a month is going to impact 95% of anyone in the world positively. It is even more significant because I will show you how to work for it. No tricks, easy ways out, or that type of B.S. You will see how it's done and then can use it to your own advantage.

Make sure you fully commit to your goal. Know that you will succeed. Know how you will do it and stick to your strategy as much as you stick to breathing in each breath. It will help you achieve your goal if you take all the things in your life that you know are holding you back and toss them away. Become the person that will make it work and then you will be that person.

Next Post in Series: First Strategy for New Income Stream