3 Ways to Establish a Passive Income

Asset Protection Group | Aug 5, 2020

The average millionaire has three or more sources of income. You probably aren’t surprised to learn that working a single job for several decades often does not result in this kind of wealth. Most of those who are successful in accumulating a sizable nest egg have spent years leveraging their primary income, credit, or some other resource to establish second or third streams of revenue.

Those who establish alternative streams of income, or passive income, can be better prepared for a secure retirement. As the old saying goes, don’t put all of your eggs into one basket. Multiple streams of income mean a lower chance of disaster in the event that one doesn’t work out. But how do you do it?

Start off by saving. Living within your means is a good goal but living below your means will equal money left over each month. Aim to save 10 to 20 percent of your income, or more if you can.

Evaluate your options. Work with a skilled financial planner to evaluate your options and research your own interests such as real estate or a side business. Weigh economic factors along with your own tolerance for risk to decide how to establish a passive income that fits your lifestyle and abilities.

Invest and reinvest. Growing a nest egg is about more than simply saving money; put that money to work for you, so that you establish a stream of income that continually produces. Then, reinvest some of your earnings so that you build upon your own success.

That sounds simple enough, but are there drawbacks to establishing a passive income? Well, yes. While the income may be “passive” one day, your efforts are anything but. Establishing another stream of income can mean hard work, especially in the early years. And yes, there are risks inherent in any financial activity.

We can help you decide how to save for the future and establish income for retirement, while protecting yourself from undue risk. The discussions we have today can start you on the road to independence and security in the future.

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