Passive Income? - Look at Your Passive Expenses First
Do a search for the term 'second income online' and you will be hit with a hundred and one articles and stories about how someone makes $1000 a day in their spare time. More interestingly you will notice that the buzzword that is thrown around a lot is 'Passive income'. Passive income has become the holy grail of the second income prophets. They talk about it in hushed tones. It almost has 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 these articles are trying to sell you something. Some piece of software that will automate your selling or investing. Either way they are trying to make their 'Passive Income' by selling the idea of 'Passive Income' to you. In the end it resembles something like a pyramid. Person one at the top sells the idea of passive income to two people those two people sell the idea of passive income to another four people. This continues until eventually you have a couple of thousand of people all trying to create passive income by selling passive income tools.
I know about this because I've 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. Passive income in itself is supposed to be self perpetuating by its very nature. Once you set up a passive income system it is suppose to carry on by itself using its own momentum.
So where does that leave you? You're in debt or maybe not but either way you want a piece of this 'Passive Income'. Well to begin with if you are truly going to go after passive income you are going to need a lot of time. Time is the one of the key elements.
Lets be honest most of us don't have the time or energy to create a second income. I know I hadn't. I was so busy doing nothing (well nothing important) that I made excuses and couldn't get anything done. The few times I did get start passive income projects they invariably died a quiet death never to be mentioned again.
So what's the alternative? It's a lot closer to home than you think.
Passive expenses - the mirror image of passive income
No one ever really talks about passive expenses. Or certainly no one talks about them in the context of your personal finances. To illustrate what I mean about passive expenses take the example of gym membership. Say you have membership of the local gym that costs you $80 a month and is paid by direct debt. This $80 will be taken from your account every single month regardless of whether you are in the gym every day or whether you haven't seen the inside of the gym since January 2nd. The point is that the expense is passive you don't have to physically go out and buy anything for it to occur. You signed up once and now you pay via direct debt every month.
Now as an alternative to generating a passive income a simple solution would be to eliminate as much 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 not going anywhere. It means that you don't have to invest time and energy into generating a passive income of $100.
Here is a list of some of the typical passive expenses
Phone bill
Have a look around for a cheaper provider. There are always better deals to be had.
Electricity bill
Look for ways that you can permanently reduce your electricity bills. For example use energy saving bulbs. They may cost more initially but they will save you money in the long and there are more environmentally friendly. You'll need to get creative while at the same time trying not compromise your standard of living.
Magazine subscriptions
Do you really need these subscriptions? Can't you just check the magazine out in the store, see if there is anything interesting in it and then buy it if there is but don't buy it if there is nothing that interests you in it.
Gym memberships
Be honest, how many times have you gone to the gym in the last three months? Is there anything that you do in the gym that you cannot do outside the gym? Things like going for a run, cycling etc.
Insurance
Shop around for the best offer. Usually if you go with one company for your home and car insurance then they will give you a discount. Keep looking!
Website memberships
As with magazine subscriptions - do you really need the membership? Most of the information contained in the website is probably available for free on the web somewhere else. It just takes a bit of searching.
Cable TV
Do really need those 200 TV channels? When was the last time you really watched anything on channels 50 to 200?
Rent/mortgage
If you have a mortgage, then shop around for a better deal. There are some good deals still on offer 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 fees
Again shop around. Change banks if you have to. A lot of these fees can be reduced or eliminated.
The list above is only a sample of the passive expenses that people incur every month. There are other things that you could probably identify in your own situation that could be classified as a passive expense.
If you are determined to generate a second income then may I suggest that before you start that you tackle your passive expenses first. You are better off, initially at least, spending time and energy reducing your passive expenses. That way you can be sure that any additional income you earn 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 the need for a second income could be eliminated. You may not need to take a second job or start a side business in your spare time. Find out more info by visiting this site: https://passiveincomeing.com/builderall-affiliate-program-review/