There are 3 main types of passive income
The first 2 MUST be part of your financial life plan.
What is Passive Income?
passive income can be defined as income received on a regular basis, with little effort required to maintain it.
1
Passive Income for Your Loved Ones
If there are people in your life who depend on your income – then it is absolutely mandatory that you have a replacement for your income in place (in case you die first). Be sure to leave clear instructions for your loved ones so they know how to access the money and what to do with it.
For most people, your income replacement will come in the form of inexpensive term life insurance.
2
Passive Income for Retirement
Whatever ‘retirement’ looks like for you – you need to have a plan in place that results in monthly passive income to cover your living expenses. More passive income in retirement is better than less, so plan accordingly.
For most people, retirement income can be a combination of retirement savings (like a 401k), a pension, and some sort of government safety net (like Social Security).
3
Passive Income for an Abundant Lifestyle
Extra passive income flowing into your bank account each month is what it’s all about! This type of passive income is optional. If you choose to pursue it – you’ll be in for the ride of your life.
There are countless ways to create or obtain these various streams of passive income. Pick something that appeals to you and work relentlessly at making it your reality.
