Passive income in recent time has become a buzz word for people who want to enjoy a financial free lifestyle, not being a slave to your job nor slave to money.

But what does passive income really about?

Passive income in definition is to earn money without actively involve in the process of earning it. Some call residual income. What it means is that you need to work hard to get the process going and once it done, you can expect repeated passive income with minimum effort or no effort at all.

Is there such a thing as passive income?

As an employee you would never get to enjoy such privileges, because time is limited therefore have your earnings is limited by how much time you spend on the job, to get residual income you need to either start a business or invest in a product that could give you residual income.

One of the most common way to get residual income would be getting property and rent it out, however property prices could be very high and not everyone could afford, therefore not every could afford this form of passive income. There are other ways to earn passive income, however you would either need money or talent.

But in this new economy there are still ways for people to make money without spending that much money. You could start and blog, and get revenue from it. If you are able to drive traffic to your site, you would be able to sell advertisement space on your site.

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Are you suitable to earn passive income?

While it methods are there, but to earn residual income, you need to make the effort and acquire the knowledge. It is not a get quick rich scheme, so if you thinking of easy cash then you would need to re-access if you are suitable to earn passive income.

My New Year resolution for 2012
I have categorise my resolution into 3 main areas – Family, finances and health.

Family : I think family is the most improtant motivation for me to work, I would like to have one holiday with my family and perhaps some family time at pinic or chalet at least once or twice next year.

Finance : This is the part I think I am most lacking in the year 2011. I need to reduce my spending and increase my savings and earnings.

• Savings : I would put aside a part of my salary before I even start portion it for my spending or paying my bills.
• Earnings : I would divide this into three parts
  • Part 1 – I am going to get my upgrade this year so my salary would increase.
  • Part 2 – Acquire assets to help me secure my financial freedom.
  • Part 3 – Another way I am going to earn money is through my websites. I would need to work hard to get them on the first page of google so I would be able to get traffic to my sites

1. Passive Income Network which is a blog for people to discuss how to create passive income and residual income to gain financial freedom.

2. Fitness, Wellness and health which talk about fitness, wellness and health as the title suggest.

• Health : In my country, males are require to take IPPT- (Individual Psychical Proficiency test) I hope I would be able to achieve silver standard this year.

There it is my new year resolution for 2012, I hope to have good news to provide at the end of the end. Have you come of with your new year resolution yet?

Passive Income

Passive income consists of interest, dividends, gain or loss from stock sales and certain business entity income via a K-1. 

Interest is what you receive from investing in mutual funds.  Or from your savings account.  If you receive $10 form any one source, they are required to send a 1099INT to you for reporting it on your taxes.  Dividends are return on investment that owners receive from shares of stock.  It is reported to you via 1099DIV.  If you sell any investment (stock, piece of land, etc.), you will have a gain or a loss that is also passive income. 

Rental income is generally considered a passive activity.  The one exception is if you are a real estate professional or manage rental properties as your main source of income.  This example demonstrates that there is always an exception to almost every IRS rule. 

Likewise, income from a K-1 tax document may be passive or active (non passive).  If you have a brokerage account, part of it may be invested in shares of a partnership.  So you get a K-1.  You are just an investor, so this K-1 represents passive income.

To the contrary, you r only business that you operate and own 50% of is a partnership.  You run the day to day activities, while your only partner is just an investor and supplied the money.  Your K-1 represents active income, while your partner’s K-1 represents passive income.

Actively Passive – Who Cares?

If you have a ($50,000) loss via a K-1 in a year and it is active, you are permitted to deduct the entire amount against your other active income (W-2, 1099MISC as an independent contractor, etc).    If you have the same loss and it is passive, you can use it all any passive gains you have.  Let’s say you sold a piece of stock with a $10,000 gain.  So you have reduced the loss to ($40,000).  Your W-2 (active) income is $100,000.  You can only deduct ($3,000) of your loss against the $100,000.  There are passive loss deduction limitations against active income. 

Now you have a ($37,000) loss to carry forward to the next year.  Same rules.  Net the loss 100% against all passive gains, which you have none.  Then you may deduct another whopping ($3,000) against your active income.   And so on. 

The good news is that when you die, the entire loss becomes deductible that year against active income.  Bottom line is that generally large active losses are more valuable than large passive losses.

Here are two types of Income, Going Income and Resistless Income. Although some group are not awake around them, so let me lot you a bit of aggregation near both the types of income.

Progressive Income is the income in which few operation of care has been performed by the mortal who is exploit the income. It is dolabriform equivalent you are doing a product and someone is paid you for that play. Thusly all identify of salaries, wages, execution payment, and income from mercantilism, sales commissioning etc. victory into this collection.  This also includes the realise from any concern in which some touchable dealing has been performed.

All income from few assets dance also water in the category of about income.

On the new assemblage, passive income mainly comes from letting activities, suchlike you score a property and you are renting it to someone added, thus this income testament fall into the category of voice income. Along with this if you are deed income from any sector or trade in which you are not involved directly, gift also expire into the synoptic aggregation.

In systemic you can say that the income for which you are flat participating give sinning into alive income unit patch in which you are not at all participating gift go into the nonviolent income unit.

For example, a writer tends to contract with a publisher to have a book published. In most cases the writer receives a cash advance for granting the publisher the right to publish the book. The rest of the money raised in the book royalties, a percentage of the profits from each book sold. Sometimes this percentage is high, and sometimes relatively low. Sometimes the money up front is low, but the copyrights are higher.

Also, if the book became a movie, the rights to the benefits of film can be negotiated as well as a fixed fee and royalties. So a person can sell their absolute idea of ​​a film director, and receive an upfront payment. Alternatively, the author could license their ideas to a film director and receives a percentage of the profits from the film, as royalties.

Even after a movie has left a cinema, the author may still continue to make money in royalties from the sale of DVDs, or licensing to show the film on television. Often, the repetitions of the licenses mean fewer rights over time.

An actor in a movie may also be entitled to royalties from DVD sales or licensing to show a movie on TV. Also on television actors often make royalties when rerun TV shows. Sometimes when the TV goes into syndication, royalties continue to be made for a long time after the show is over. Again, royalties tend to decrease as the program is shown more often.

In some cases, people can go to court to sue for copyright when a patent or copyright is being violated. Therefore, the illegal use of a song, for example, could mean being sued for a portion of your benefit. Some musicians are declared free of labor rights, allowing them to get more airplay. This was the case of the surprise 2006 hit band, OK Go.

Instead of hiring copyright, the band decided to publish his first and second video site, YouTube. This gave him access to all the videos of the band, and free downloads. The result was extreme popularity of the band and the increase in record sales. Sometimes the decision to produce something without copyright can actually result in more economic benefits.  

So what is passive income? According to Investopedia, passive income does not include earnings from wages or active business participation, nor does it include income from dividends, interest or capital gains. To enjoy such income, it takes time to build. There are numerous methods and you may get familiar with some of them already. Examples include rental income from property, royalties of publishing a book, advertising income from website, etc. Personally, for a business or an investment which does not involve using much own labor while it generates income and cash flow is a good way for me to earn passive income.  Some of them take cost while all of them require knowledge and time. And it is not definitely the get-rich-quick trick and all of them cannot happen overnight. All you need to make that happen is hard work and perseverance.

Passive income which requires capital

For this category, you can enjoy the sweet success after bitter work. First of all, work hard to earn income for saving and accumulate the sum to be your first pot of gold. Make use of your financial knowledge to invest in stocks or bonds to generate substantial dividends and interest with power of compounding interest. For example, when you invest $10,000, given that there is 5% of interest income annually, there will be $265,000 in sum after 20 years. To be able to earn rental income, similarly, you need to save a sum to buy a property which may be a flat or a parking space beforehand.

Passive income which does not require much capital

There are many examples. To name a few, the ways to generate passive income include an automated online business, a profitable blog which can generate advertising income, writing a book and getting it published to earn royalties, and writing online articles to earn advertising income.

To make it a success, it requires the knowledge and effort to build. For instance, for a profitable blog, you need to put good content into the blog so that it can attract audience as well as advertising companies. For the online writing to earn residual income, there are many websites, to name a few, such as Triond, Squidoo, infobarrel, xomba at which you can write articles and your earning will depend on the advertising income the website receives.

For you to have a brief idea on how long we can generate passive income from online writing which earns residual income, let’s me give you an example with calculation. Basically, a good article can earn you US$1 per month per approximately 100 clicks, so you need to write 100 quality articles which enable you to earn US$100 per month. So when can you quit your full-time job? It all depends how much you need to spend monthly. For instance, if US$1000 is already a good residual income for you, then you need to write at least 1000 good articles. That may require around 18 months to do so if you can write around 2-3 articles per day. For me, I need to take around 1 hour or more to write a good article, depending on how much research work is required. You may write at a faster pace than me.

Seeking financial freedom is always my goal. Let’s work hard together and make it happen.

Some good articles for you to learn and enjoy:

Automate Your Income to Simplify Your Life

How to Make Money on The Internet

Passive Income Resources

The meaning of “richness” for many people could have been different. Similar to the way how people see the “success”.

Very little or almost no one wants to live in poverty and misery. All want to live rich, happy, and prosperous. But in reality, the number of poor people far more than the number of rich people.

Is it hard to become rich? Is it necessary to achieve high academic title such us professor? Or should we visit the medicine man request prescription to be rich? Cannot we become rich in honest way? Should we corrupt and do crimes like stealing or robbery? We need tips on how to become rich in simple and easily understood ways. Please check five points below:

1. Do not ever dream of getting rich quickly or instantly. Being rich takes time, the process of being rich takes time, which only be conducted in the high discipline and commitment.

2. Being rich is not the end of the achievement, but the point to be kept moving. For example, the measurement standard that you have been rich at this moment is having money of $ 1 million.  Once you have $ 1 million, then your standard will increase again become $ 5 millions or even more. So, the standard of your wealth will continue to change along with your recent achievement.

3. Define your own definition about rich.
What is your definition of wealth? Does having a size of 1,000 square meters mansion in Beverly Hills and the latest Mercedez Benz already rich? Or must you have a cash amount  of $ 25 billion? Or do you think if you have a size of 200 meters of a modest house in a cool city and small savings of $ 5,000 is already enough, and you have felt rich with these things?

4. I believe your definition of ‘richness’ is not same with your friend or relative’s definition. The definition of ‘richness’ or wealth is very relative and has very long range, perhaps starting with a $ 10 million to U.S. $ 2,500 million. Perhaps $ 4,000 per month is enough for your living costs, but the other person may need $ 25,000 per month. All back to the ways and lifestyle of each person.

5, According to Webster and the Oxford Dictionary, the meaning of the ‘rich’ is to have a lot of money or property, but according to Robert T. Kiyosaki, ‘rich’ is having passive income (income that you get without working) which value is greater than the cost of living. So, without a job, a person or family can live with the same (proper) standards.

6. So before you step and reach the property, please look for meaning and determine definition of your richness. What does the meaning of richness for you? Do you feel rich now? What size (standard) of your ‘richness’? Remember, the standard of someone else may not always right for you!

Wealthy people see things differently. Wealthy people aren’t necessarily afraid of or unwilling to work hard. Wealthy people generate passive income by working hard one time and continuing to be paid for that work over and over again. In the beginning they may not earn a lot of money and people cannot see that they are accumulating wealth. After doing the same simple things over and over they eventually develop enough passive income that they not only have a high income, but also free time to enjoy it.

Many friends and family of mine, see my passive income investments as a waste of time. I know people who think $15 an hour is a great income, but think the $100 a month profit I get from a rental property is a waste of time. The difference between the two is that they have to get up and go to work every day to continue earning that $15 and hour. I have already done the work on my rental property. They must spend their money on gas, vehicle maintenance, etc. commuting to and from work. My renters mail or bring payments to me or my property manager. My friend can only physically work so many hours a week. Even if he could work more, his employer typically will not let him work more than 40 hours. I can buy as many rental properties as I want. I bought a mobile home for $1000. My actual investment was $150. A partner put in $300. The remainder of the balance was financed and was paid from the rent collected. Now my partner and I each receive $100 a month just by being alive. If we were to cease being alive, our heirs would receive the $100 a month. We can and do continue to acquire more properties. The more we buy, the more income we receive and the less we actually have to work for money.

This is how people become wealthy. Instead of looking for the one big score (i.e. lottery), waiting for that higher paying job or that sure thing investment of a lifetime just do simple things that pay you over and over again for work done one time. Continue to do those same simple things over and over again and one day you’ll wake up with an above average income and the free time to enjoy it.

Step 2: Open up a Roth IRA and/or contribute to your 401K at your job. Try to put as much money in these accounts as possible. Don’t put all of your money in them, but put a good amount in them. You are going to use most of your money for other investments that will bring you more return on your money.

Step 3: Invest in real estate. This is one of the fastest ways to retire when you want to and retire with wealth and comfort. Read as many books as you can on investing in real estate, attend seminars, talk to agents or people you know who are in real estate, and just take that plunge and get into real estate. It is the best way to retire early and become wealthy.

Step 4: Start planning your exit from your job now!!! You need to decide how much you will need in retirement and set out to start preparing for retirement and funding it. Make sure you are putting away enough money to ensure you have a comfortable retirement and don’t run out of money. There is nothing worst than running out of money in retirement.

Step 5: Think of ways to create as many streams of passive income as possible. Passive income is the least taxed by the government, and you don’t have to work hard for it. Consider investing in stocks that pay good dividends, or writing a book or copywriting something, or even starting your own business. Whatever it is to get you more passive income and make your income more residual, you have to do it!

In conclusion, never stop learning. You have to be willing to be disciplined and smart with money in order to retire whenever you want to. To get rich, all you have to do is know the difference between an asset and a liability and buy assets that put money in your pockets. Thats it! Work hard and Good luck!

5 Work At Home Myths That Likely Stop You From Success

If you are one of the struggling work at home moms or dads then this article may help you in your quest for financial and emotional freedom from home. You’ll learn about a few of the myths that steal your precious time away from you and why passive income will change everything fast!

Here are the 5 myths:

Myth #1: It’s hard to make money online..

It’s absolutely dreadful to think that it’s hard to make money online. How come some can earn thousands easily and some can’t? Knowledge. I can’t believe how people can spend 10-12 years in medical school in order to put a roof on their income when they can be earning just as much online in just 12 months and NEVER have a roof on their income.

Myth #2: It’s super easy to make money online..

This is the flip-side of the coin! It’s easy to make money, but you will need a lot of training and experience before you’ll start seeing results. It’s virtually impossible to come online and start making money overnight without a system, a plan or any help.

Myth #3: You need to be a tech-geek to make money…

Just another limiting belief. If everyone thought you needed technical skills to make money we’d have 10-20 people who were successful. There are MILLIONS. It’s better to have some techie know-how, but it’s definitely not required. Usually, what works online is simple and doesn’t require much technical knowledge at all.

Myth #4: It’s expensive to earn money online…

Many people have a strong belief that you need a lot of money to start and become successful online. You can start for free and start earning a good living from the internet. Then when you are comfortable you can move onto advertising.

Myth #5: I need to know something about what I’m talking about…

Another limiting belief is that you need to be an expert or know something 500 times better than the best in the biz. This again is limiting. You do not need to be a guru or expert. You can set up a site that compares products as an outside “reviewer” without any knowledge at all and start earning profits tomorrow!