Passive Income - Look at Your Passive Expenses First


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How to build and develope passive income streams on the internet and elsewhere.

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Passive Income - Look at Your Passive Expenses First

  1. 1. ==== ====Earning Passive Income Is Fabulous ... if I can you can. VISIT THE WEBSITE FOR GREATMONEY MAKING ====Do a search for the term second income online and you will be hit with a hundred and one articlesand stories about how someone makes $1000 a day in their spare time. More interestingly you willnotice that the buzzword that is thrown around a lot is Passive income. Passive income hasbecome the holy grail of the second income prophets. They talk about it in hushed tones. It almosthas a reverential quality. Create a passive income and become financially free is their tagline.If only it was as simple as some of these articles make out. Many times the authors of thesearticles are trying to sell you something. Some piece of software that will automate your selling orinvesting. Either way they are trying to make their Passive Income by selling the idea of PassiveIncome to you. In the end it resembles something like a pyramid. Person one at the top sells theidea of passive income to two people those two people sell the idea of passive income to anotherfour people. This continues until eventually you have a couple of thousand of people all trying tocreate passive income by selling passive income tools.I know about this because Ive tried to create passive income in the past but with limited success.Generally I end up working very hard for the so called passive income that I do generate. Passiveincome in itself is supposed to be self perpetuating by its very nature. Once you set up a passiveincome system it is suppose to carry on by itself using its own momentum.So where does that leave you? Youre in debt or maybe not but either way you want a piece of thisPassive Income. Well to begin with if you are truly going to go after passive income you are goingto need a lot of time. Time is the one of the key elements.Lets be honest most of us dont have the time or energy to create a second income. I know Ihadnt. I was so busy doing nothing (well nothing important) that I made excuses and couldnt getanything done. The few times I did get start passive income projects they invariably died a quietdeath never to be mentioned again.So whats the alternative? Its a lot closer to home than you think.Passive expenses - the mirror image of passive incomeNo one ever really talks about passive expenses. Or certainly no one talks about them in thecontext of your personal finances. To illustrate what I mean about passive expenses take theexample of gym membership. Say you have membership of the local gym that costs you $80 amonth and is paid by direct debt. This $80 will be taken from your account every single monthregardless of whether you are in the gym every day or whether you havent seen the inside of thegym since January 2nd. The point is that the expense is passive you dont have to physically go
  2. 2. out and buy anything for it to occur. You signed up once and now you pay via direct debt everymonth.Now as an alternative to generating a passive income a simple solution would be to eliminate asmuch of you passive expenses as possible. The net result is the same. If you manage to eliminate$100 worth of passive expenses each month then that is still $100 staying in your account and notgoing anywhere. It means that you dont have to invest time and energy into generating a passiveincome of $100.Here is a list of some of the typical passive expensesPhone billHave a look around for a cheaper provider. There are always better deals to be had.Electricity billLook for ways that you can permanently reduce your electricity bills. For example use energysaving bulbs. They may cost more initially but they will save you money in the long and there aremore environmentally friendly. Youll need to get creative while at the same time trying notcompromise your standard of living.Magazine subscriptionsDo you really need these subscriptions? Cant you just check the magazine out in the store, see ifthere is anything interesting in it and then buy it if there is but dont buy it if there is nothing thatinterests you in it.Gym membershipsBe honest, how many times have you gone to the gym in the last three months? Is there anythingthat you do in the gym that you cannot do outside the gym? Things like going for a run, cycling etc.InsuranceShop around for the best offer. Usually if you go with one company for your home and carinsurance then they will give you a discount. Keep looking!Website membershipsAs with magazine subscriptions - do you really need the membership? Most of the informationcontained in the website is probably available for free on the web somewhere else. It just takes abit of searching.Cable TVDo really need those 200 TV channels? When was the last time you really watched anything onchannels 50 to 200?
  3. 3. Rent/mortgageIf you have a mortgage, then shop around for a better deal. There are some good deals still onoffer but it will depend on your individual situation. With rent maybe it is possible to rent a place for$100 cheaper a little further away from your current place? It might be worth a look. That extra$100 would go a long way.Banking fees/credit card feesAgain shop around. Change banks if you have to. A lot of these fees can be reduced oreliminated.The list above is only a sample of the passive expenses that people incur every month. There areother things that you could probably identify in your own situation that could be classified as apassive expense.If you are determined to generate a second income then may I suggest that before you start thatyou tackle your passive expenses first. You are better off, initially at least, spending time andenergy reducing your passive expenses. That way you can be sure that any additional income youearn will be adding to your bottom line and not to go to pay passive expenses.It could be the case that in some situations if you reduce your passive expenses enough that theneed for a second income could be eliminated. You may not need to take a second job or start aside business in your spare time.Article by Mike Leonard. To read more articles by Mike please visit his website - this website contains articles on debt management, freefinancial calculators and a free ebook relating to Personal finance and particularly debtmanagement.Article Source: ====
  4. 4. Earning Passive Income Is Fabulous ... if I can you can. VISIT THE WEBSITE FOR GREATMONEY MAKING ====