How to build a passive income
Updated: Nov 19, 2019
Building the mindset and foundations for your own passive income. Have your money work for you.
We're in the business of producing successful business owners and helping them work on foundations that are strong enough so that when they are no longer working on it, they can have significant income. Because ultimately that's what wealth is about, creating passive income. Income that comes to you irrespective to you working or not.
A lot of people would say you need to start with a lot of money to become rich, and that simply isn't the case. Sure it's easier if you start with a million pounds, but for most of us it's not our reality. The path to creating a passive income starts with understanding the difference between a liability and an asset.
One of the best books to help you get around this mindset and to truly understand how it all works is Robert T. Kiyosaki's Rich Dad Poor Dad. I encourage everyone who hasn't all ready read it to read it. He even has a board game out called Cashflow, designed to help educate kids and to help them understand how to build wealth. The mindset here is to put away some of your hard earned earnings each time you are paid or rewarded a bonus of some kind. It is said we should put away 20% each time and place it into a savers account. For those that can't afford to put away 20% of their hard earned earnings, I advice you to start with 5%, then 10%, just put it away, make yourself accountable. Before too long you will be in a routine of doing so and it will become easier to start putting away that sweet 20% mark. Then, with that money you have saved, invest it and allow your money work for you.
I am not saying this can be achieved over night, but with the right foundations and mindset, everyone can make money work for them, rather then the other way around.
Then when you are in a position to invest, go ahead and invest intelligently. And then repeat the process, only next time around your 20% will be larger and you will be able to save up quicker. Then when you are ready to invest in something new, you will have the funds to do so. Now you have two other levels of income streams coming in as well as your full-time day job. And who knows, maybe now your annual passive income is greater than your annual expenditures and you are at a point where your passive income is able to support your lifestyle and that of your loved ones around you?
If you haven't yet read Robert T. Kiyosaki's Rich Dad Poor Dad, then it really is a must read for you. You can find it here on amazon but is also available at all main bookstores.
Words by Ben Taylor - CEO of Keller Williams UK