One of the common characteristics of self-made millionaires is that their income comes from multiple sources. In fact, 84% of the self-made millionaires in my Rich Habits study had three streams of income.
However, not all income is created equal.
One or more of these sources of income is what is known as passive income. Passive income is income that generates income without you having to work. This is automatic income.
Annuities are one example. An annuity is an investment you make at one point in time that grows over time and ultimately generates an income stream.
Other examples include: rental income, dividends, interest, capital gains, book royalties, advertising fees for your blog or website, income from mobile apps, licensing fees, franchise fees, income from the sale of a business, silent partner income, etc.
Think of passive income as any investment that generates income over many years.
This is a common source of income among self-made millionaires.
Investments that generate passive income always work for you.
It’s hard to become wealthy or even financially independent if you’re not making money while you’re sleeping, on weekends, or on vacation.
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