Gallup, NM (PRWEB) May 25, 2006
ABC launched an entrepreneurial challenge on 20/20 to show that average people can create wealth. The best-selling financial authors consulted by 20/20 were David Bach, author of “The Automatic Millionaire” and Robert Kiyosaki, author of “Rich Dad, Poor Dad.” Robert Kiyosaki coached 3 average people through a 20-day entreprenurial royalty challenge.
Step one of Mr Bach’s wealth strategy is home ownership: “You can't get rich if you're a renter. The American dream of home ownership has really separated the rich from the poor in this country. The average renter in America today is worth less than $5,000. The average homeowner is worth over $172,000.”
Step one of Mr Kiyosaki’s wealth strategy is to start a part-time business: “If you want to be wealthy, start a part time business. That to me is very smart.”
Robert Kiyoski in his financial bestseller Rich Dad, Poor Dad describes passive income as the way to wealth for those seeking to leave the “rat race”. Kiyosaki, says, "If you work for money, you give the power to your employer. If your money works for you, you keep and control the power."
Financial books, teaching people how to become wealthy and create passive income abound. The front jacket for Robert Allen’s book asks, “Would You Like to Make $24, 000 dollars in just 24 hours? If you answered ‘yes!’ then you need to look no further than Robert G. Allen’s new book, Multiple Streams of Internet Income.
But exactly what is passive income?
Passive income, is income that does not require your direct involvement. Some familiar kinds of passive income include owning rental property, royalties on an invention or creative work, and network marketing. If you want to earn more, work less, and have a decent retirement, you're going to have to start creating income streams that do not require your direct involvement. Whether you're just starting your business, or you've been running it a while, the sooner you start thinking about how you are going to shift your business model to create more passive income, the sooner you can achieve personal and financial freedom.
According to Liane Bate who juggles a part time business and a full-time job, “While my career is providing me with financial independence, it is perhaps an internal desire to be even more financially independent and in control of my money, for not only the short term, but for my future as well. When I read financial books to get myself on track, I hear time and again how important it is to have multiple sources of income. When you work at a regular job like I do, it is called “earned income”, but there are many other sources of income. I have taken it upon myself to learn about how I can best set myself up for a financially healthy future. In addition to my 9-5 career, I have chosen to try and build my “residual income” by owning a web-based business.”
Passive income is of two types, residual and leveraged. Residual income is the on-going income received from doing an activity one time. An example is rental real estate, ongoing commissions from insurance sales, royalties from published works. Leveraged income uses the work of other people to create income for you. The quintessential example of this type of income is network marketing.
But is passive income truly passive meaning occurring without initial and ongoing effort?
Robert Allen goes on to explain, “before you get too excited (about creating $24,000 dollars in 24 hours), let me remind you that it had actually taken over nine months to set up this process. I had to launch the Web site. I had to draw traffic to my site. I had to gather the names of people for my Internet newsletter. But what if you could work for a full year with zero income and then, in one day, recoup all of your expenses and walk away with a net profit of $ 10, 000…$30,000…$50,000…maybe even $100,000? Moreover , what if you could repeat this process once a month for the rest of your life?!”
Scott Allen writes in his About.com article, Juggling Multiple Streams of Income, “There is no such thing as truly passive income. Maintenance work has to be done on a regular basis, usually weekly or monthly, and there are detrimental consequences if you don't get it done.”
Internet Marketers Joe Vitale and Pat O’bryan went one step further in defining what it truly takes to create passive income when they explored the “Myth of Passive Income” and collaborated on a book that highlights the passive income strategies of 22 internet professionals.
Joe Vitale: “I think the real insight here is that you still have to work to have passive income, but the work is more play and doesn’t seem like work if you love what you are doing.”
For more information about specific passive income strategies and how they can work for you, just like on 20/20 go to http://www.passiveincomesecretsonline.com/passiveincometoday/index.html