The following post was contributed by the blog My Money Design, a website that is all about looking for ways to make more money and find financial freedom.
One of the questions I often get on my blog MyMoneyDesign.com is why I prefer to focus on online income as my way of building passive income rather than use other methods. Why not focus my energy on rental income, being a business owner, or going after different types of investment products?
While I have complete respect for those people who use their other opportunities and leverage them to build their fortune, I find myself more entranced with the prospects of making money online. Even though there are probably a million different really good passive income ideas out there in the world, nothing seems to mesh as well with my regular day job schedule as working online according to my own schedule.
Here’s a little bit deeper dive into why that is:
Why I Like Building Passive Income Online:
1) Always Seeing a Positive Increase:
This is my infatuation with online income: Every day I log into my Adsense account and see my balance go up.
That’s pretty incredible!
To see my balance always going upward is a lot different than when I check my stock portfolio. Over the years even though I’ve grown and matured in my stock picking abilities, a sour market can still take down the value of an otherwise good investment. As temporary as that drop in value may be, no one likes seeing their account balance go down.
2) The Possibilities are Endless:
Right now I have a small handful of websites that make around $500 per month. There is nothing in the rule-books that says I can’t duplicate this success over and over again and develop a larger pool of websites that generate $5,000 per month.
Yes, there would need to be some effort involved with setting things up and finding the right niches to target. But the good news is that once you do something right, you can use a virtual assistant (VA) or freelancers to replicate your good work for you. And they’re often ready and available to do it for a very low cost!
3) The Risks are Low:
The thing that scares me more than anything about owning a rental property is the liability. What if you get bad tenants? What if you get hit with a lot of repairs? What if you have to go to court and the judge sympathizes with the low-life tenants?
These may all sound extreme, but each of these are exactly what happened to my father-in-law when he owned a rental property. For him it was one problem after another. Ultimately the place ended up burning down!
Now compare that to the barriers of entry for starting a website. I’ve started almost all my websites for about $100 each. That includes the name, hosting, writing, and promotion.
Let’s say the website is a complete flop? If it is, so what! So I’m out $100. There are no legal problems. No tenants to deal with. No property to unload.
Though at some point I’m sure I’ll diversify my passive income streams more than I am now, for now I’m content to simply focus on one thing at a time and make sure I’m doing it right.
Focus is the Key:
Sure there are many other things I could be doing in addition to building my income in this manner. But would that really be the best thing to do?
It’s been documented that one of the pivotal turnaround points for Apple in the late 1990’s was when Steve Jobs killed all other (insignificant) projects and focused solely on just developing the iPod. As we all know, that was an invention that changed the world.
I don’t want my online efforts to be fleeting or forgettable. Just like a normal investment, I’d much rather have them generate reliable, stable streams of passive income than to fizzle out quickly.
Though multi-tasking is an admirable task, I want to exercise the same sort of laser focus by developing a quality product that will yield long-lasting passive income prospects for a long time to come. I believe that is the secret to putting out really good work and making something that is going to stand the test of time.
Readers – What do you focus on when it comes to building passive income? Do you try to exploit your online business ventures or do you pay more attention to other ways of making a dollar into two? What are some of your successes or failures?
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