Note: If you were expecting the article on how companies, vendors, and industry experts are offering certifications for passive income, look for it on Friday…
Since last summer, US gas prices have gone up by something like 50%. For those in Maryland, so did our power utility costs. No matter where you are you’ve likely felt/seen that groceries cost a bit more than they did 6 months ago.
I feel sure that 99.99% of us are affected by these increases, and there’s no doubt some of us are more critically affected than others. I’ve been more and more troubled about this since yesterday afternoon. Here’s what happened—
I met a friend for our monthly lunch. Halfway through her salad she said, “Girllll, I’m starting to feel the money squeeze. My car’s paid off and my mortgage is manageable, it’s the rest of it!”—
- The grocery trip that used to cost $65 now costs $75.
- Her electric bill (for lights, central air, and stovetop) was $150, now it’s $210.
- The estimate-based propane bill (for central heat, water heater, ovens) has been $220 monthly, but it’s time to settle up based on actual usage and they’ve billed her an additional $1400. Due, like, now.
- And since the propane bill’s estimate is based on the previous 12 months use…starting next month her monthly bill will be $330.
- In addition, the cost of propane is going up something like 15¢ a gallon, so she anticipates owing them another huge chunk this time next year.
She went on to say that because of these there’s no wiggle room in her budget for extra saving. Along with regular additions to her 401K, she’s saved a year’s salary so far. However, unless she changes jobs, gets a raise, or prices go down, there won’t be any more cash socked away in CDs and her IRA.
The thing is, she’s a well-educated person in a management position with a solid company. She has always handled her money well, with a solid savings, an affordable fixed-rate mortgage, and no other debt.
Barring a layoff, she’s pretty much immune to minor shifts in the economy—but she’s feeling it now.
This is what’s troubling me.
That and lunch was expensive. Not the food…the 60 minute round trip drive. Driving to and from lunch cost more than the lunch itself. My other monthly lunch date, Chris, has established a “You Drive, I’ll Buy” lunch policy to defray my meeting up expenses.
Admittedly, these are relatively luxurious frets of lower-middle to middle-middle class Americans: not saving enough, spending too much on gas, and who’s buying lunch.
What’s been troubling me is if we’re fretting, what’s everyone else doing?
What Everyone Else Is Doing
If I’m worried about affording gas for lunch dates twice a month, someone else out there is worried about affording gas to get to work every day.
If my girlfriend can’t save extra, then someone else out there can’t save at all.
Which means that someone who was just barely covering their credit card or student loan debt, now can’t afford to pay it.
Which means that someone who wasn’t covering their debt, now also isn’t covering their utilities.
Which means that someone who wasn’t covering debt or utilities now can’t afford their medical bills.
Someone else can’t afford their mortgage
Someone else is behind on their rent.
Which means someone else isn’t eating as well.
Which means someone else isn’t eating as much.
Which means someone else isn’t eating at all.
The Big Diff
It doesn’t take alotta money to make alotta difference. An additional $400 each month is a big help regardless of where you are socio-economically.
Think about it: The difference between saving and not saving, eating and not eating—or something in between—can be a $47 ebook that sells 2 or 3 copies each week.
But Why Passive Income?
If we earn our living as an hourly or salaried employee, or bill by the hour, we weren’t gifted with more time to cover these increased expenses. The days didn’t increase proportionally…they’re still only 24 hours long.
We can’t make time to earn more, we can only take time away from something else, so unless we got a comparable cost-of-living increase or successfully raise our rates, we’re going to continue coming up short.
At least, that’s true for those of us that don’t have something running in the background: A published book with a royalty payout. A useful and affordable ebook. A membership site. A directory site. A niche content site with some ad revenue.
For God’s sake, not a blog…too much hands-on time required.
We just need to create a little sumpin that will pay us back for a year or two…or twenty. Something that doesn’t need our hand in to continue making a buck or two…or four hundred.
That’s all I’m sayin’.
{ 93 comments }
I finally decided to write a comment on your blog. I just wanted to say good job. I really enjoy reading your posts.
I read somewhere that most people could change their life completely with just a a 10% raise in income.
Once I worked that out passively, I saw that it was true. It took a while, but it was worth it.
Good article, Crystal. A nice follow up is Clay Collins “income snowball” article:
The Income Snowball & Funding Your Freedom: A Four-Part Guide
That is why I started my blog. With a focus on sales training and mentoring eventually I will have a book, e-books, we do online webinars, and continue to look for passive ways to monetize our IP.
Also, I have joined forces with a great mind and started http://messageslinger.com
Most important all of this is now managed from home, the 150 mile a day commute, gone.
That alone is saving me hundreds of dollars a month. We all need to find ways to get our talents to make us a little money while we sleep. Otherwise this recession is going to bite a bit.
Nice read. I am trying to get my blog to pay for my health insurance. Hope I don’t get sick soon.
The Masked Millionaire
Fantastic post! My sister said she had a panic attack while reading it. So did I, but it’s because you’re totally right, and I need to put in more effort and determination with regard to passive income. My hubby is all about this idea (I’m going to send him this post) is working on that now. You’ve touched on a very important subject, especially for freelancers like me who don’t make regular money to begin with!
Great food for thought. This certainly applies to most middle to upper class people. And its a great prelude to many enterprising ideas offered both online and in the franchise world.
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Crystal,
I agree. Especially the “not a blog” part, not because many people shouldn’t have one who don’t yet, but because it’s not passive!
The Big Diff is big in any times, but in squeeze times like these, the Big Diff is enormous.
Think think think…
Regards,
Kelly
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We need passive income in able for us to survive
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@Aaron, John, and Stephen—Welcome and thanks for your comments!
@Dave—I hadn’t heard that about the 10%, and when I do the math for my girlfriend, myself, and anyone else who’s numbers I know, it works out just right! Freaky that it could be that simple and such a small value.
And that Income Snowball thing of Clay’s was just terrific. We all know the Debt Snowball works a treat, so it’s fab to see the theory turned on it’s head. I made my own list yesterday and was surprised at what was on it!
Thanks again
@Karl—You brought up another important point with your commute: cutting back a bit on expenses. Making a bit more is important, but spending a bit less also helps widen the gap.
My girlfriend found that she was leaving lights on when she shouldn’t, and setting the A/C to 78 was just fine…still cooler than outside and saves a mint. If nothing else, the bit of belt-tightening is making us aware of the small changes that make a big diff.
Thanks!
@Masked Millionaire—Me too! Having that particular bill as a checked box every quarter will be wunnerful.
@Kelly—Howdy! And blogging really is the opposite of passive. Dangit *sigh*. Think think think!
@Steph—Oh dear! I don’t mean to scare anyone with it, but I was pretty scared when I wrote it and I guess that leaked out around the edges.
Big hugs to all of y’all over there…we’re getting to it and it will get us through it.
Dave Navarro, I am totally agreed what you said. I think nothing can compete these rising prices other than increasing our income. I am working 2-3 more hours to earn some extra money and that extra work enable me to cop with all that high increasing bills.
Recent blog post from John M: 1
In the classic personal economics book “The Overspent American” by Juliet B. Shor, she states that most people believe that a 10% increase in their income will change their life. The key point is ‘believe’ and that it holds true whether the person earns 15,000 or 150,000. Part of this is mindset, and part is the ‘life I have become accustomed to’. These little increases sure are cutting into my comfort zone.
I look forward to seeing your follow up with more passive income tips!
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@John—Welcome and thanks for your comment!
@Christy–_Welcome and wow
I so love knowing where the 10% increase idea came from. I’ll have to get my hands on it because I’m as guilty as anyone else of overspending.
And whether it is belief or fact or magic ;), that 10% changes a lot…for everyone, like you said.
The numbers do work out, though. For my small family, and also my friend’s, 10% more each month would be like all the increases of the past year didn’t happen—even though her household earns…hmm… 3 or 4 times than we do. Weird, huh?
And I should have had a new post yesterday, but got so involved in other work that I didn’t finish it
So sorry about that, I’ll aim for Monday.
Thanks again for the book!
I’m really enjoying your posts about creating passive income. Everyone seems to be feeling the pinch these days. I’m looking forward to learning more!
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Thankz for the post.
Its really helped us.
@D Tenen and Kimberly—Glad I could help, thanks for your comments!
Your post is exactly right. People are experiencing a downward shift in their social/economic status. Everything is costly more but wages aren’t going up to compensate. Something has to give. Even an extra two hundred a month would help a lot of people, or at least cover the increase in fuel spending.
Recent blog post from Jacqui: How rising gas prices are effecting the real estate industry
Ah yeah, passive income is my holy grail. I have a few small projects that have trickled in income for many years, but this year I’m putting focus on 3 projects to generate passive income. Don’t know if they’ll work yet, but I’m counting on it.
Hope to read more about your journey towards passive income, and hopefully borrow lots of good ideas from you.
I believe that the world leaders do not understand what the people are going through, here in Syria all the president did was raise the salaries of the people 20%. Now the businesses are forced to raise the prices of there products and little business have started to suffer.
Absolutely true.
Filling up my car with a full tank costs me $80 instead of the $45 it used to cost me around a year ago…
Now when I go to the store I spend about 40% more than what I used to spend. What is wrong with this economy?? From gas, to food prices, to real estate, to daily life, everything has durastically changed all due to an uncalled for war. I can’t wait until we have a new president…Btw check out my new website,
http://www.businesscashadvanceloan.com
Great post!
Lurve the pic at the top
Andy
Creating passive income on the side is definitely a key to financial freedom. I have been generating passive income online for a couple of years now and does it ever help. I contribute all of my passive income into savings which further compounds the effect.
Spot on. I’ve felt the crunch lately as well. Finding ways to keep your bills down is part of it, but passive income is a great idea as well.
Would love some passive income tips on my website’s tips area.
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My passive income is what has been saving my butt this past month. With no new projects on the horizon, and finishing a BIG project taking way longer than expected - it’s been the passive income that’s put food on my table and gas in the car.
PLUS - just had a baby! So that passive income has just become even MORE important! Amazing what having a kid does to get my butt even MORE in gear.
Great Post Crystal. Long time no read - great one for me to come back to your site to!
oh how i wish i had a tree like that one
-Jerry
i wish i had a tree like that! @_@
Couldn’t agree more with this. blogs are far, far too much work for the possible financial returns.
blogging comes in handy, but it requires time and effort to earn big money.. theres a lot of various on earning in blogging though you can have google ads text link banners pay per post and so on.. that depends on how you manage your blog..
@Jaimie Anderson: I agree with you. However, it’s also true that blogging comes to most as a passion (at least for the more popular blogs), the money is a second hand accomplishment. Personally, I can’t stand blogs with adsense.
Nice..I enjoyed reading your article.Thanks for the post.
I would love to build up some passive income to pay for a vacation each year! Only time will tell if that is possible.
I’ve been working on a few different passive income streams. It sure helps during the slow times, and helps prevent the feast or famine that sometimes goes with being self employed.
Many salaried and hourly workers are getting squeezed by the ability of companies to shift production to countries where labor costs are lower. While that is good news for these countries it is a problem for the U.S. since human resources are now competing globally…increased supply of human resources and slowing demand results in a tough time for many households. Passive income, especially when it is derived from an endeavor that you enjoy and makes you feel fulfilled, is a really good thing…nothing wrong with some diversity in our income stream.
Whatever time is not spent as billable time to clients or marketing your services is spent trying to find another source of income. Sleep and football don’t even fit anymore.
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I agree, we all should be generating passive income. I have site up a site tracking my monthly goal of $2599.95. I list “how” and “from where” I’m generating my passive income. The site is http://www.ysdata.com/passive.html
I think, as you wrote, days are not enough long for us to earn the income. Also people are tired of fighting for money all day long and try to find easier way to earn.
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Having a passive income is really important. Everyday, the price of our necessities go higher, thus our income should go higher too.
Good read.
If you start monitoring your income sources & your business expenses, You would be surprise to find out that some of your current projects doesn’t deserve all that time you used to give it while there are other projects that really pay very well but they need more work from your side.
this information is usefull to us
hello,i really enjoy reading your post. Eyery thing is costly and people find difficulty to make both ends meet i totally agreed with what you say . Great post.
Great post ! The information is very useful. Thanks a lot.
Passive income is the right way to go.
It’s just trying the find the most effective way to invest your time to get the best return.
The biggest thing to me is that passive income can easily be obtained.
Find something you are good at (or really enjoy), write an ebook about it (you can even write a real book and have it printed through Lulu.com), become a tutor to help other people interested in what you do learn more about it, or just become a consultant. Me? I’ve started a new business on my own to make some easy, passive income. I manage the business, my employees do the work, so it’s passive for me.
Any other ideas?
Passive income is a sort of thing everyone wants to have and everyone should have. The idea is commonly associated with the Internet related business, at least among the online community. However there are ways to have income not related with online activity. You just have to figure it out.
Ah, that is what a money tree looks like
yeah, not a blog… it requires too much hands-on time…
classic comment from you there… haha =)
I’ve got to agree after ten years of creating my own source of passive income, the money sure gives you extra choices…
I’m aiming for $2000 per month soon and it is in reach. It is simply the freedom not to have to rely on the economy, bosses and those others who try to control what you do wih your time..
so go out all and do it, it’s worth it
Sounds like everyone is a lot more interested in passive income these days, having exercised most of their money saving ideas.
I happen to have just a small amount of passive income ( $150/month ), but it’s really helped, as it the effort to get it is almost nil.
Great article.
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Great advice on not starting a blog, so true. We all have to get creative in tough times to be able to face rising prices, when there’s a will…
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Totally agree with you, any extra income always comes in handy, passive income like you mention especially. Perhaps it’s because it’s less expected, like getting bonuses at work instead of having them factored into your salary.
I just want to say that you write a very interesting. I have enjoyed reading this post. You really did a great job. I totally agreed with you that any extra income in your hand would make you happy. And now days it is very difficult to fulfill your desires with monthly income. You have some extra money to make the both ends meet. Thank you very much for the nice post.
Before you can really obtain the passive income of your dreams - make sure you build up your mental income first - through innovation, self-discipline and a PFA (Positive Financial Attitude).
Passive income is to be desired but it will never exceed your mental banking capacity.
Just something to think about people. GET WEALTHY!!
Good article. With the economy as it is today, every little bit counts. And yes, it probably won’t be from a blog.
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Its certainly a good idea to find a passive income. Ebay is a good place to start for anyone that has junk or items lying around the house which are no longer used - computer games, dvds, old toys, etc.
Very good article. Building a passive income is a long-term thing. If everyone help each others out it is possible. Sometimes people are too selfish and just put the others down. That is especially true in the internet domain I find.
Very very true. With the ever-so-rising living expenses, a passive income, no matter how less, is of great help. You have used very interesting analogies of comparative economic scales. But blogging is not a that bad option. Once you have the wheel turning, you do not have to spend a lot of time to generate income.
A very nice post. Thank you!
Yeah passive income is key IMO. It is what can make the difference between making it through the week and being wealthy.
Multiple streams of passive income is the biggest key, then it doesnt matter how big each stream is, especially if you have a high number of different ones.
http://www,justinpopovic.com
If I cant link here, please delete this, no lies here this is a link to an opt in page for a friend of mine who specializes in multiple sources of passive income. No strings attached here, no money asked for, he just wants to share his knowledge.
Passive income is incredibly important for serial entrepreneurs because so much of what we do is high-risk, high-return. Having that steady-while-you-sleep paycheck can help you weather the storm when things just don’t go too well. However, it is easier said than done. The easiest way is just to blog, of course
Too many people nowadays depend on a single income through a full time job. The stress for people whose life depends on maintaining that one source of income is immense.
I think having passive income is not only a good idea, but a gateway to relieving that stress that too many people know very well. After implementing enough forms of passive income (through multiple streams), you can relax knowing that even if one source goes away, you’ll survive.
I’ve been doing this for years, not just with web stuff but with my consulting business too. I start every month with about $3,000 coming in by itself. Not enough to live on, but a heck of a kickstart.
Yes, yes, yes! If you have the skill set to create an eBook that will sell…do it! Otherwise, there is always affiliate marketing.
It is not too hard to find a second source of income if you have a skill that is in demand. Something I recommend reading up on: HTML and CSS. A lot of people are building up small-medium sized websites and try to get some minimal ad revenue. It’s simple, work from home, and no need to search for small jobs.
In today’s economy passive income can be the best thing going for you. It allows for flexibility and innovation.
We are really feeling the pinch here in the Uk, especially the price of enerygy, through the roof!
It is a little bit hard to get passive income. Some people already doing it for 5 years without having good income..
Creating passive streams of income can be a lot of work but is well worth the effort. I started off slow and add to my streams a little each month. Hopefully by the end of this year, I will be paying my mortgage from this passive income.
The key is to start somewhere and to start NOW!
There’s nothing like having that quiet “mint in the backroom” printing up money when you’re not doing anything.
It’s true that passive income can help insulate you from economic ups and downs–but that’s contingent on using the money wisely, of course.
And you have to get it before you use it. On the front-end that does require some effort, but in the long run it really pays huge dividends.
its tricky to acquire, but is well worth it, especially if one you have it started, it requires little maintenance, such as a successful blog.
-jack
This is a good article and I completely agree passive income is the way forward, but any help on some ideas? I have found selling online is quite time consuming and with the cost of hosting and promotion it doesnt give much profit. Is renting out property classed as passive income?
I am not against passive income blogs, but it should be noted that the amount of effort that goes into creating a blog that generates more than $2-$4/day is somewhat massive. If it’s a subject you have passion for, go for it. Otherwise, I think you are better off creating a website that sells something.
Attaining passive income will surely take a while to be realized but as long as one is determined to pursue it, then achieving it is surely rewarding. It takes patience. As an entrepreneur, I myself have to wait for that time. It will take a while, but I will get there.
My best piece of advice for those looking for passive income… make sure it’s in a field you enjoy. While I don’t believe the majority of new bloggers will be earning $1,000.00/monthly, there are still plenty of opportunities for people to write about something they enjoy… and make a little extra cash on the side. The key to blogging is adding UNIQUE content constantly. If you aren’t into the subject you’re blogging on, adding a 400-word entry everyday can be a nightmare!
That’s right.
even if you setup 25 adsense sites and put some affiliate on it and drive some traffic you can easily get regular income of $300+
I agree about passive income! I got laid off from my job recently and had to see about finding a way to make some money myself. I ran across a blog that actually helped me. It’s a guy who posts his progress using the Google Money System.
Check it out… http://www.googlemoneysystem.net
I’m glad to I found it, I’m doing pretty well with the system!
Passive income is key in today’s economy but not very many people know how to go about creating one. Affiliate marketing is a perfect way to create passive income as long as you have a bit of patience.
Passive income is not easy at all for sure. It is not a overnight, “oh I got passive income now.” It obviously takes hard work, but I think anyone can reach it.
I think that spurle comment is right , not for everyone , but for a few people yes.
I’ll try to do it
There is nothing I want more than to live off my passive income. Who does not want to make money without much effort right?
Very relevant post and so true. I really love the idea of passive income. I am more than happy to work damn hard to get that income, but the idea that it then just carries on ticking over is what I think is fantastic (like book royalties, as you say).
As from my point of view, passive income is needed by every individual for his basic needs. It is a kind of part time income, but sometimes it is difficult to attain.
But without efforts, we cant make any bucks..right ??
Good one man… i enjoyed reading this article… there is a lot to learn from this…
Thanks for sharing… with this kind of a recessionary situation every tit and bit count… Anything thats get added to you income is excellent.
I usually spend some time to generate some passive income for myself.
Having a blog is definitely not a form of passive income. With all the work you have to put through posting and advertising, promoting so that you would get visited is the same with having a 9 to 5 job. Passive income is supposed to be, well, passive.
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I enjoyed reading this as well — it seems that the key to getting by in today’s economy is to just DO IT. Action, action, action. All good salespeople know that it’s a numbers game. 100 rejections = 1 sale. If you know your ratios, and keep doing something every day, progression will follow. Nice read.
@Jared Exactly! Not that anybody talks about the time investment when they’re trying to sell you something that will make you millions blogging, of course
All that you listed would be true for passive income too, but manually only at the start…hopefully it would be automated, delegated, or have its own momentum later one.
It’s not easy and it’s the dream or a lot of people to live like a old style European Lord , hunting the fox , really to do money we need hard work , skill , an a little bit of fortune.
I know a lot of people who are worried about how to support their families on what they make and I also know a lot of people who are worried about supporting their drug habit on what they make. Both of these situations need to be handled. Unless those worried about supporting their habit are rehabilitated, there will be no family to support and they will not be a positive influence on society.
First of all, I want to say I love your blog layout, its so refreshing and different! Anyway I really like this post, the reasons you supplied are just great, the hard part is setting it up, but once its done, you’ll reap the benefits! Thanks!
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Great blog entry - new reader here, and glad I found it!
Passive income is ones key to freedom, that’s for sure. I just recently started working with a program I found online to do with Google and even my very first month was a success; with no computer skills.
I’m now making upwards of $300-500+/day depending on how much work I put in and can work from the comfort of my own home with NO boss. My life has changed for the better.
More info on my blog, should you be interested.
http://www.trygooglecash.com
While some forms of income are more passive then others there are no true forms of passive income as they all require some form a management (even if only for a few minutes every now and then.
But semi-passive income is good enough for me. Something that runs like clockwork that I just have to check up on every now is a dream come true.
Passive income is definately a must in this day and age. I thought I was going to loose it all , then I found some passive income streams……Now i’m making $300+ A day.
Let’s be honest, who doesn’t want passive income? Everyone wants it but only few persons really believe that they can obtain it. Obtaining passive income is far from easy and most of the time it takes many failures before succeeding. It takes lots of patience and motivation to get the ball rolling.
Very relevant post and so true. I really love the idea of passive income. I am more than happy to work damn hard to get that income, but the idea that it then just carries on ticking over is what I think is fantastic It is a kind of part time income, but sometimes it is difficult to attain.Passive income is ones key to freedom, that’s for sure.I would like to thank you for the efforts you have made in writing this article. I am hoping the same best work from you in the future as well. In fact your creative writing abilities has inspired me.
Hi, I’ve been lurking for a while now and I’m a regular reader of your stuff.
I’m UK based, and I can tell you that the situation there is very similar to that of the US. ON the bright side, I’ve made my own luck now using a work at home system. Its been hard, but I no longer feel so worried. I’ve put a few Q&A’s about it here: Google Money System - Frequently Asked Questions.
I couldn’t agree more. Having a little something on the side certainly helps when the economy decides to act up. Saving what you can, where you can does too.
I have gone to using a lot more electronic grocery coupons, and buying things that don’t matter so much at the dollar store lately. As always watch you prices, but ther ear good deals out there if you look.
Aside from a little income here and there, knowing where your other money saving resources are when thing get tight really helps.
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