As noted by the title, every Friday I will share valuable information, tips, tricks, techniques and suggestions on how to change and empower your finances. I know, I know..."Money ain't everything!" Well in the words of Rita Davenport, "It's right up there with air!"
Let's face it, you simply can not survive in the world today if you aren't financially secure. My Friday posts won't be about being "Stinkin' Filthy Rich" -- they will be about being "Stinkin Filthy Secure!"
How do you become financially secure when you have month left over at the end of your money, you're already working two jobs, and/or you don't have the money or knowledge to start your own business?
There are numerous options. But the single most important thing to embrace is that in order to be financially secure, you MUST have some sort of "passive" income producing for you. According to Wikipedia:
"Passive income is an income received on a regular basis, with little effort required to maintain it. It is closely related to the concept of "unearned income".
The American Internal Revenue Service categorizes income into three broad types, active (earned) income, passive (unearned) income, and portfolio income. It defines passive income as only coming from two sources: rental activity or 'trade or business activities in which you do not materially participate.' Other financial and government institutions also recognize it as an income obtained as a result of capital growth or in relation to negative gearing. Passive income is usually taxable."
Wikipedia goes on to state that some examples of passive income are:
- Any type of property income (Real Estate)
- Earnings from a business that does not require direct involvement from the owner or merchant (Examples: Car Wash; Laundromat; Network Marketing; etc.)
- Rent from property;
- Interest from a bank account (Savings Accounts, etc.)
- Royalties from publishing a book or from licensing a patent or other form of intellectual property, such as computer software product;
- Earnings from internet advertisements on websites;
- Dividend and interest income from owning securities, such as stocks and bonds, is usually referred to as portfolio income, which may or may not be considered a form of passive income. In the United States, portfolio income is considered a different type of income than passive income;
- Pensions
As you can see there are numerous ways to create passive income. Depending on where you are in your life, some of these might work better, or be more accessible than others.
The second most important thing to remember about financial security is, establish multiple streams of income! This means, don't put all your financial eggs in one basket. As I write this article, I earn my income as a Corporate Trainer and Motivational Speaker. In addition, however, I have recorded training videos and am writing a book to create royalty income, I have investments with my financial broker, and I am involved with a business that does not require my immediate daily involvement.
In my Friday posts, I will be highlighting and discussing these options. This week, I would like to start by addressing the pink elephant that seems to trip people up from time to time...Network Marketing. Although it's been a viable option for decades, there have been some "bad apples" that have left a bad taste in the industry (not unlike Corporate America I might add!). In years past, I personally utilized Network Marketing to provide a great product in my Modeling Agency AND to build a 4-5 figure per month income. So my experience with the industry has been very positive
In a recent FORBES article the industry was examined and explained from an objective writer. If you've never been sure if Network Marekting was for you, you will want to read this article.
Here is the link to the FORBES article:
FORBES ARTICLE
Next week, we will examine investments and I will interview my financial planner to provide sound information in the industry.
