Start earning a full time income

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Start earning a full time income at home working from home


  • 1.==== ====Start Earning a Full-Time Income Working at Home ====One of the keys to getting rich and creating wealth is to understand the different ways in whichincome can be generated. Its often said that the lower and middle-class work for money whilst therich have money work for them. The key to wealth creation lies within this simple statement.Imagine, rather than you working for money that you instead made every dollar work for you 40hrsa week. Better still, imagine each and every dollar working for you 24/7 i.e. 168hrs/week. Figuringout the best ways you can make money work for you is an important step on the road to wealthcreation.In the US, the Internal Revenue Service (IRS) government agency responsible for tax collectionand enforcement, categorizes income into three broad types: active (earned) income, passiveincome, and portfolio income. Any money you ever make (other than maybe winning the lottery orreceiving an inheritance) will fall into one of these income categories. In order to understand howto become rich and create wealth its vital that you know how to generate multiple streams ofpassive income.Crossing the ChasmPassive income is income generated from a trade or business, which does not require the earnerto participate. It is often investment income (i.e. income that is not obtained through working) butnot exclusively. The central tenet of this type of income is that it can expect to continue whetheryou continue working or not. As you near retirement you are most definitely seeking to replaceearned income with passive, unearned income. The secret to wealth creation earlier on in life ispassive income; positive cash-flow generated by assets that you control or own.One of the reasons people find it difficult to make the leap from earned income to more passivesources of income is that the entire education system is actually pretty much designed to teach usto do a job and hence rely largely on earned income. This works for governments as this kind ofincome generates large volumes of tax but will not work for you if youre focus is on how tobecome rich and wealth building. However, to become rich and create wealth you will be requiredto cross the chasm from relying on earned income only.Real Estate & Business - Sources of Passive IncomeThe passive type of income is not dependent on your time. It is dependent on the asset and themanagement of that asset. Passive income requires leveraging of other peoples time and money.For example, you could purchase a rental property for $100,000 using a 30% down-payment andborrow 70% from the bank. Assuming this property generates a 6% Net Yield (Gross Yield minusall Operational Costs such as insurance, maintenance, property taxes, management fees etc) you

2. would generate a net rental yield of $6,000/annum or $500/month. Now, subtract the cost of themortgage repayments of say $300/month from this and we arrive at a net rental income of $200from this. This is $200 passive income you didnt have to trade your time for.Business can be a source of passive income. Many entrepreneurs start out in business with theidea of starting a business so as to sell their stake for some millions in say 5 years time. Thisdream will only become a reality if you, the entrepreneur, can make yourself replaceable so thatthe businesss future income generation is not dependent on you. If you can do this than in a wayyou have created a source of passive income. For a business, to become a true source of passiveincome it requires the right kind of systems and the right kind of people (other than you) operatingthose systems.Finally, since passive income generating assets are usually actively controlled by you the owner(e.g. a rental property or a business), you have a say in the day-to-day operations of the assetwhich can positively impact the level of income generated.Passive Income - A Misnomer?In some way, passive income is a misnomer as there is nothing truly passive about beingresponsible for a group of assets generating income. Whether its a property portfolio or abusiness you own and control, it is rarely if ever truly passive. It will require you to be involved atsome level in the management of the asset. However, its passive in the sense that it does notrequire your day-to-day direct involvement (or at least it shouldnt anyway!)To become wealthy, consider building leveraged/passive income by growing the size and level ofyour network instead of simply growing your skills/expertise. So-called smart folks may spend theirtime collecting diplomas and certificates but wealthy folk spend their time collecting business cardsand building relationships!Residual Income = A Form of Passive IncomeResidual Incomeis a form of passive income. The terms Passive Income and Residual Income areoften used interchangeably; however, there is a subtle yet important difference between the two. Itis income that is generated from time to time from work done once i.e. recurring payments that youreceive long after the initial product/sale is made. Residual income is usually in specific amountsand paid at regular intervals. Some example of residual income include:-- Royalties/earnings from the publishing of a book.- Renewal commissions on financial products paid to a financial advisor.- Rentals from a property letting.- Revenue generated in multi level marketing networks.Use of Other Peoples Resources and Other Peoples MoneyUse of Other Peoples Resources and Other Peoples Money are key ingredient required to 3. generate passive income. Other Peoples Money buys you time (a key limiting factor of earnedincome in wealth creation). In a sense, use of other peoples resources gives you back your time.When it comes to raising capital, businesses that generate passive income usually attracts thelargest amount of Other Peoples Money. This is because it is generally possible to closelyapproximate the return (or at least the risk) you can expect from passive investments and sobanks etc., will often fund passive investment opportunities. A good business plan backed bystrong management will usually attract angel investors or venture capital money. And real estatecan often be acquired with a small down payment (20% or less in some cases) with the majority ofthe money borrowed from a bank typically.Tax Benefits of Passive IncomePassive income investments often allow for the most favorable tax treatment if structured correctly.For example, corporations can use their profits to invest in other passive investments (real estate,for example), and avail of tax deductions in the process. And real estate can be "traded" for largerreal estate, with taxes deferred indefinitely. The tax paid on passive income will vary based on theindividuals personal tax bracket and corporate structures utilized. However, for the purposes ofillustration we could say that an average of 20% effective tax on passive investments would be areasonable assumption.In summary:For good reason, passive income is often considered to be the holy grail of investing, and the keyto long-term wealth creation and wealth protection. The major benefit of passive income is that it isrecurring income, typically generated month after month without a great deal of effort by you.Building wealth and becoming rich shouldnt be about extracting every last bit of your own energy,your own resources and your own money as there is always a limit to the extent you can do this.Tapping into the effective generation and use of passive income is a critical step on the road towealth creation. Begin this part of you wealth creation journey as early as is humanly possible!P.S. Visit and sign-up for FREE insights, tips and exclusives onPassive Income Streams - utilizing our powerful income and wealth creation strategies can fast-track your wealth building so that you get rich for life and build wealth that lasts.P.P.S. Why not signup NOW for more insider secrets on Passive Income Streams for FREE & download for free the "The 7 Secrets of WealthCreation" e-book.Article Source: 4. ==== ====Start Earning a Full-Time Income Working at Home ====