Tag: passive income

Depending on different stages of your life, becoming a millionaire can be a very different story.

For example, the path to be a millionaire for a 18 year old would be entirely different for a 40 year old.

When you are a 18 year old, you don’t have any liabilities or any “life burdens”. But for a 40 year old, you have children and parents to take care of.

For 18 year old, you don’t have much capital to start a business, but for a 40 year old, you’ll probably have some savings to invest or start a business.

Whether or not how old you are, some of the paths are fixed – For instance, you would need to build passive income. And there are not too many types of passive income you can create.

Before we go into the details what to do at different age, let us first talk about what kind of income are there?

If you look at Wikipedia, US define income into 3 types…

1) Active income

2) Portfolio income

3) Passive income

Portfolio and passive income are quite similar in terms of both kinds of income are passive and doesn’t require you much time to work on it.

But there’s a difference in what you can work on when you talk about these 2 kinds of income.

For portfolio income, the paths to become a millionaire is largely dependable on how much you save and how much are you making.

If you have a great education and work in a high position, then your active income would be large and if you know don’t spend much and put into investment, you can become a millionaire very fast (Largely because of the returns through the stock market but you would need to understand some knowledge behind investing).

However, that doesn’t mean that people who doesn’t have a very good education can’t be a millionaire too.

You would then need to work on other kinds of passive income like

1) Building a business
2) Write a book
3) Residual income – through certain sales job like insurance, real estate (rental), network marketing etc..
4) Online Marketing

We will go through each of them.

Building a business may sound scary to you but if you learn the ropes of a business, it’ll be fulfilling and profitable. You may need some capital of at least $10, 000 (depending what kind of business you go into).

You can sell anything from food, all the way to B2B like setting up a outsourcing services for other companies. The ideas are unlimited.

The key here behind building a business is ultimately getting sales – you would need tons of sales to growth your business.

Writing a book – This may be daunting for some of you because writing a book is a long process and how do you get it publish? Do you know that it’ll take a long time for you to make money from royalties from your book? It ultimately depends on the sales of your books in the local bookstores.

You would also need a publisher who is willing to publish your book or you can publish the book yourself.

Residual income – Residual income from insurance is a good source of how you can actually become a millionaire. This is a sales job and you may need to do a lot of cold calls, presentation as well as selling before you can make a lot of money in the insurance line.

Online Marketing – Due to the fact that in today’s fast pace technology, internet has become a “real world” where people can connect with each other, you are able to tap onto this entire marketplace at the lowest cost ever. There are many ways where you can make money online and the thing is many people have become millionaire within a short period of 2-3 years online.

In fact, this is the best way where you can start a business. The cost is low and there are many ways for you to brand and market your website.

Now after you have read these 4 ways to build your passive income, what do you think they have in common?

If you read closely and think for a moment,

it’s all about making SALES passively…

And it is the kind of passive income you want to learn and want to build. We are going to hold a survey soon and if you can participate in the survey at the right of this sidebar. This is to help us to find out which kind of passive income would you like to find out about.

Your assignment for you to become a millionaire is think about what kind of passive income you want to build.

Next, do you have the millionaire mindset? Click here to read more about millionaire mindset.

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Becoming a millionaire at the age of 26 is my goal which I’ve set when I was at the age of 19.

In fact, I was so determined to reach my goal that I’ve decided that the only way to do that is to build a business.

Is that the only way to be a millionaire?

Now at the age of 24, as I’ve looked back at it, I’ve a complete different mindset to become a millionaire. I’m still far from my goal but I think I have the means and capabilities to reach it soon.

The first step to become a millionaire is by understand this concept:

The difference between active and passive income.

Active income – When we talk about active income, it’s all about exchanging our time for money. Most people that have a job and getting a paycheck for the time spent is considered an active income.

If you are capable, you can probably make 10k, 20k or even 50k every month, depending on what kind of job you have and what you are responsible for.

Unfortunately, not many people can make this kind of money because there are just too many capable people who can accept a job with a lesser pay. This is essentially a supply and demand game.

Most people averaged around $2, 000-$5, 000 every month. If you do the calculations, assuming you can save around $3, 000 every month, you can only have $36, 000 at the end of a year.

And it would take you 27 years for you to save $1, 000, 000. What a long journey…

Most people don’t become a millionaire simply because it’s a tough journey. Why do you want to save so much after working so hard everyday? You want to enjoy too right?

So they usually spend a lot too!

For those who make 10k, 20k, or even 50k a month, they may spend and enjoy themselves so much that they don’t save that much every month.

You can see that if you are going to follow this path of working for someone and getting a job, then your only way to become a millionaire is by saving.

The more you can save, the more likely you’ll become a millionaire…

And it usually takes a long long time…

Passive income – According to Wikipedia, it is an income received on a regular basis, with little effort required to maintain it.

Passive income is completely different from active income in the sense that it doesn’t exchange your time with the money you make. Instead, you are building an ‘asset’ that exchanges with money.

Some people think that passive income is derived from a source which requires no work to generate your income, but this can be misleading and the only passive income that falls under this definition would only be investing.

In order to have some meaningful purpose behind passive income, I would define working on passive income is like building an asset that can generate income automatically in the future.

For example, you build a business that can bring in automated income in the future. It may require you to work 24/7 to get your business running, but once it is automated, you don’t have to care too much about it.

Even you build a poor business that can bring you $1, 000 a month later on (passive and automated), it still can make a lot of difference to your income later on. To make $1, 000, maybe you would need to spend 3 months to do so. But after the 3 months, you don’t have to touch the business at all.

So you simply have $1, 000 residual income every month to add to your savings without the need to spend your time on it.

You can then spend your time working on another business which is going to make you another $1, 000 every month.

After one year, you will have 4 business that will bring you a total of $4, 000 of passive income every month.

And you don’t have to spend much time on it. How good is that?

If you truly understand this concept, you will move towards the direction of creating passive income instead of sticking to your job and working on your active income.

And that’s what we are going to talk about in the next section!

Click here to read How To Become A Millionaire – Step 2

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