What’s going on everybody?
In this video, I wanted to break down passive income for a lot of the new entrepreneurs out here. Now passive income as you probably know, it is the act of making money in your sleep, which sounds like the greatest thing ever, but how realistic is passive income and is passive income truly passive. If you watch till the end of this video, at the very end, I’m gonna give you my five top forms of passive income and how to break into each one. But the moral of this video is that passive income is not truly passive at all, but instead exists on a spectrum and follows a set of laws that I like to call Jay’s laws of passive income that I’m going to teach you. So if you’re starting out as an entrepreneur, get the thought of passive income out of your head. Passive income is where you put the money that you make, so that it becomes an investment that eventually makes money while you sleep. You put your money to work making you money, however, you need money to invest in any form of passive income we’re going to talk about, that’s actually going to move the needle for Are you so if you’re a beginning entrepreneur, you need to figure out how to make money not passively first.
So some big misconceptions about passive income.
One is that it’s passive, you put money into a box and watch it grow while you sleep. It’s not really how it works.
Two is that this is safe money that this is going to continue for the rest of your life without you having to do anything. That’s also very untrue.
The third is this image of yourself sitting on a beach collecting money, making millions of dollars passive income does not generally work like that. But the big rule to follow in all of my videos, and probably every piece of content that you consume is there are exceptions to everything. I see people who supposedly are making millions of dollars while they sleep with various different modes of passive income that we’re going to talk about in a few minutes. But in general, passive income is not a dream, you’re gonna have to work for it. It does follow these very specific set of laws that you’re going to have to keep in mind when choosing which form of passive income is right for you.
So let’s start off with Jay’s laws of passive income. There are two laws The first is that the harder you work to set up that form of passive income, and the harder you work to maintain it, the more that form of passive income is going to pay to remember, they exist on a spectrum, the forms of passive income and these investments that take the least amount of work to set up and the least amount of work to maintain are also probably going to pay you the least now vice versa, forms of passive income that you take a lot of time to set up take years to really put the love and the effort into building them and maintaining them. Those are the pieces of passive income that are going to actually generate you a lot of money. And the law number two of passive income is that the riskier than that for a passive income is, the more that it can potentially pay. Now, there are some forms of passive income such as real estate and dividends that are extremely safe, but won’t pay nearly as much as some other forms, which we’re going to talk about later in this video.
So with that being said, let’s get into five forms of passive income that I put together and I ranked each one of these forms of passive income on three different categories. One the risk to the return and three how much work it’s going to take to set up and maintain. So the first form of passive income is one that I made sure you guys are all probably very familiar with. And that’s real estate. Real Estate essentially, is when you buy a piece of property, usually with a mortgage, or you take a loan from the bank, you buy this piece of property, and then you fill it with tenants who pay off your mortgage and rent usually, there’s a little bit leftover at the end after you pay your property managers and your taxes and whatnot. So real estate usually ends up paying a couple of hundred dollars per month at the end of all of that there is some risk involved but in general, the work to purchase this property, get the tenants in there and maintain it is all very low. Granted, it only pays a couple of hundred dollars a month per piece of real estate that you have to need to generate a pretty substantial real estate portfolio in order to actually be comfortable on real estate alone. The next source of passive income that we can talk about is dividends. So there are certain stocks that you can buy that will pay you a dividend which is basically a payment to shareholders every sacred or even the annually, or monthly dividend that they pay you is so passive as they come, you put money into a stock and every quarter you get a check back in return in general, unless you’re buying a stock that is relatively risky with super high dividends is a pretty safe form of investment. And you can make a check pretty much every quarter without having to do anything. So the work is very low, but usually the return is also fairly low.
Let’s change gears and talk about a high-risk form of passive income and that is a business now business is one of the ultimate forms of passive income if it runs itself. Remember, if you’re operating this business every day nine to five, or even longer than it’s no longer a form of passive income, you’re actively working to maintain it and it doesn’t count. However, if you set up the business so that it is managed, growing, and does everything without you being present, then it is a form of passive income. Obviously, businesses take a long time to set up and get to this level and some examples of businesses are dropshipping. A lot of people are huge people. Opponents of dropshipping but it takes quite a bit of time and skill to set up a dropshipping store that’s actually effective, especially with the marketing,
I had a passive income business which I still have, it doesn’t perform nearly as well as it used to. And that was a social media automation company that took me about a year to get it to the point where it’s passive income and it was growing and running without me having to be there. However, businesses are a riskier form of passive income times change social media changes, whatever your business is doing, I guarantee the landscape is going to be different in five years, so you’re gonna have to be able to maneuver differently in order to keep that business alive. And these things can take quite a bit of work to maintain growth, but the returns are usually the highest some other forms are e-commerce on Amazon, social media, automation, drop shipping, these are just some forms of passive income that you can apply to your business getting these things self-sufficient can sometimes take years but the payoff is high.
Okay, the next more passive income we can talk about is affiliate marketing. Affiliate Marketing is when you sell other people’s online Products digital course software’s and you get paid a commission to do so there’s a lot of different ways to sell them. There are websites such as Clickbank, which makes it really easy where you can go on. And basically pick a product or software to sell, see what they pay you in return, and then start promoting that online product. You can do this through your YouTube channel, your blog, your social media, a lot of people make a lot of money doing affiliate marketing, the return is actually pretty good. And the work to set it up is really going to be the difficult part. You need to figure out how you’re going to market this get people to sign up using your affiliate link. A lot of times YouTube tutorials and different software’s a good way to go. If you have a blog, that’s another good way to go. But affiliate marketing can be very effective. And there are other websites other than Clickbank that make this very easy to actually do fifth and last one that I want to talk to you about is ad revenue. So if you’re fortunate enough to be able to create an online pub, such as a blog, or a YouTube channel or somewhere where a lot of people traffic, you can almost always get paid for the traffic to those sites. YouTube makes it very easy. There’s a lot of times plugins for WordPress, they make this very easy to display people’s ads and get paid for them, this can actually generate a lot of money people make hundreds of thousands of dollars a month on YouTube ads and things of that nature. But setting these things up can be a lot of work. If you can generate traffic to a channel, you’re gonna be okay, so generating traffic to a blog page or a YouTube channel, or even an Instagram channel where you have someone doing your stories, your paid posts for you, all of those are really good forms of passive income.
Okay, so that’s five methods of passive income that we just spoke about. Remember, a lot of these take quite a bit of work to set up and a lot of these take quite a bit of an investment to actually get the ball rolling and start collecting some money and like I said, this exists on a spectrum and I’m gonna put the spectrum up here for you to look at but in general, the harder you have to work to set up your from a passive income, the more that form of passive income is going to pay. If you want to sit back and collect money doing absolutely no work look into something like buying stocks and dividends. So you can just sit back and every quarter collected the check, however, if you want to take your heart money and put it to work where it’s actually generating you a lot of money look into something like e-commerce or something that pays you based on how much work that you’re putting in. I personally other than the social media automation company, which I run, it still generates me some passive income, me and my partner is always working to create new forms of passive income, such as an e-commerce brand where we actually work pretty hard upfront to set these things up. And then the goal is these pay you more and more for your entire lifetime. But again, a lot of these terms of passive income can be risky, we don’t know what the landscapes are going to look like five to 10 years from now, it used to work hard to maintain these forms of passive income, but they are real, they’re out there. There’s a lot of misconceptions about them. And I’ve probably missed 20 to 25 other forms of passive income that a lot of people are taking advantage of to make a lot of money. If you go online and start looking at some of the pros. There’s a lot of really good information out there but work hard on your main business, take all of that money and figure out where you’re going to put it so that that money again then ends up going to work to make you more money and that’s what it’s really all about. Okay, thank you for watching this episode. I really hope you found something useful here. If you did, drop a comment or drop a comment asking me any question, I always answer my comments. And with that being said, Have a great rest of your day. And I’ll see you next time. Thank you so much for watching this episode of the mentors collective. This is Dr. Jay Feldman. And I just wanted to take a moment to thank you so much for your support, and also asked you for a little bit more than you can take the next 10 seconds and write us a review on iTunes, Google Play or Spotify. Just let me know your feedback. It means the world to me. Again, thank you for watching. If you love this episode, please share it with your friends. Share it with your family. Until next time!