In the previous post, I talked about why creating passive income streams are so important. Now that we’ve covered the benefits of this form of income, let’s start the conversation on ways it can be created.

What’s below is a list of different kinds of passive income streams. This list is by no means exhaustive, but it will work for starters. As you read the list, make a note of which ones catch your interest. Here they are in no particular order:

1. Information products (royalties from books, audio or training programs)
2. Creative works (royalties from music, photography, art)
3. Internet marketing (web sites, membership sites, blogs, e-mail lists, etc.)
4. Ideas and inventions (royalties from patent and trademark licensing)
5. Network marketing
6. Computer software
7. Interest-bearing accounts (savings, money markets, certificates of deposit)
8. Loans (such as those on prosper.com or virginmoney.com)
9. Incentive programs (such as cash back credit cards and online shopping malls)
10. Dividend-paying securities
11. Oil and gas royalties
12. Rental real estate (single family homes, apartment buildings, storage units, RV parks, strip malls)
13. Coin-operated businesses (vending machines, laundromats, arcades and car washes)
14. Any business you own that can be systematized to run without you (be sure to read Michael Gerber’s E Myth and T. Harv Eker’s Speed Wealth on this idea)

Not all of these streams are created equal however, as some are easier to get going than others. You should focus on those streams that naturally interest you and those that you have some knowledge in the subject matter already. Both factors are important, as they will serve to maintain your motivation and help protect you from being taken advantage of.

When I first started building passive income, I made the mistake of diving headlong into rental real estate. Investment real estate was something I knew absolutely nothing about, and to boot, wasn’t all that interested in. I only picked real estate at the time because it was something that had worked well for other people. Well, my results from real estate have been less-than-stellar so far. I invested a lot of time learning the ropes of a business that was boring and lots of hassle for me. Avoid making the same mistake I did. Focus on something you will know and like.In subsequent posts, we’ll be drilling down into each of the above in more detail. Out of those in this list, I’m particularly fond of internet marketing and information products. I will be focusing on these two areas first in the next posts of this series, as I believe they provide lots of opportunities to put your expertise and natural gifts to good use right away in creating a cash machine. As my wife (who’s also an internet marketing consultant) puts it, information products allow you to “use what you know to create cash flow.” This blog is a living example of that philosophy, but more on that in a future post.

Next Steps

As we go through this series, there are a few things you can do along the way to complement your wealth-building and passive income knowledge:

1. Sign up for e-mail updates to this blog. This will serve two purposes: keep you informed of future posts, and secondly, get you started on your first passive income machine that you can use as seed money for your other passive income investments.
2. Read up on wealth creation and passive income. Start out with Secrets of the Millionaire Mind, Rich Dad Poor Dad and The Millionaire Maker. These books are good overviews to the psychology and high-level mechanics of wealth and passive income creation. In a later post, I’ll provide a full list of books I recommend, but these three will give you a good foundation to build upon.
3. Go to T. Harv Eker’s Millionaire Mind Intensive. This 3-day event can be summed up in one word: wow. It is definitely intense, especially the exercises they put you through in the evenings of days 2 and 3. I don’t want to distract from the topic of this post by going into too much detail here, but if there’s any way you can go, you need to get there. It was a life-changer for my wife and I.

As I mentioned earlier, next on deck is the first deep dive from the list above: the opportunities in the area of internet marketing. Until then, happy reading those books!

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