It’s gotten pretty popular lately to build up your passive income streams haven’t it?
Why isn’t everyone doing it though?
Chances are most people don’t know where to start, or they think that it’s risky.
If you’re interested in learning how to build up some passive income for yourself to help improve your financial situation, you’ve come to the right place.
I’ve compiled 5 simple, yet very doable tips right here so you can start taking action right now.
Tip #1 – Start Doing Some Accounting
No, you don’t have to hire an accountant, relax.
But what if I asked you these questions :
- How much are your expenses every month?
- How much money are you saving per month?
- How much money can you comfortably invest every month ?
Would you be able to answer them ?
You see, most financial books or gurus out there would tell you that you need to know these things, and for a good reason.
If you can’t even manage your finances, how do you expect to make good use of your money? For all you know you could be spending more than you can really afford.
Before you know it you’re in some serious debt. We want to avoid this.
Which is why I recommend you start getting yourself one of those apps that track your income and expenses. This way you can actually see how much you’re saving each month.
When things become crystal clear it will definitely be easier to cut out those unnecessary expenditures.
Tip #2 – Get Your Piggy Bank Ready
After you’ve done some preliminary budgeting, it’s time to look at how much you’re actually saving each month.
If you’re spending all of your salary without a dime in savings, things might go south when an emergency happens. Not to mention you won’t have any reserved cash for that golden investment opportunity when it arrives.
Before we even start talking about making money, you should aim to live below your means. Spend less than what you earn.
Otherwise whatever amount of income you get from your passive income streams will go straight back out the window anyway.
Tip #3 – Learn how to spend your money
Now that you’ve saved up a good amount of money, what do you do with it ?
Just a little fun fact, one of the key differences between the rich and middle class is in how they spend their money ( which is why I’ve asked you to do your accounting ).
See if you’re buying a new car when you don’t need it or can’t afford it, that’s poor money management right there.
However, if you can afford it, would it be better to spend it on something that will give you better returns instead ? Like maybe some rental property that can bring you passive rental income each month.
You really should think long and hard about what you do with your money. Spending it on your wants is good and all, but if you’re really serious about being financially free you should spend it more wisely.
Just to clarify, I’m not saying that real estate is the best investment. There are tons of ways to invest and make passive income, it’s just up to you to find what works for you.
Tip #4 – Invest in yourself
Okay, you’ve probably heard this advice a million times over, but now I’m repeating it again.
Too many self help/financial books out there preach this for a good reason.
Do your research before you start investing so you don’t end up making stupid mistakes.
Educate yourself not just in terms of financial knowledge, but even your attitude as well. I’d say that to start making more money, you probably have to change first.
Chances are that if you’re in a financially poor position your habits might have a role to play here. Start reading and learning more so that you can fix these bad habits.
Also, read up on what you plan to invest on. Like I said there are a million ways to make passive income. Each of them will require a different set of skills.
Don’t dive in head first and you’ll be way more likely to succeed.
Tip #5 – Acquire Assets ( This is how you get rich ! )
Quite literally, assets are what make you passive income. Basically an asset is anything that can bring in positive cash flow for you.
Got a piece of rental property? That’s an asset that brings you rental income right ?
Do you own some stocks that pays out dividends consistently? There’s your asset.
Got a blog that makes you some juicy affiliate commission every month ? Another asset right there. ( You can learn how to start your own blog here )
As a rule of thumb, all 5 of these tips are related to one another. If you aggressively acquire more assets, you’re spending your money wisely.
Eventually you’ve have enough passive income to quit your day job !
But it starts with you making some changes to your current lifestyle. Discipline is probably the hardest part of this change.
However the results will definitely be worth it.