How to Begin Building Passive Income Streams

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It's very easy to get caught up in the idea of passive income. Blackout USA The simple formula of build passive income streams, generate wealth, retire- seems an easy solution to financial distress that everyone is eager to try. With all the wealth literature and gurus- Kiyosaki, Clason, and others, thousands of people have the right mindset and are eager to start building wealth. They spend years building up their knowledge and study thousands of different ways to say the same thing- residual income equals financial freedom. Then they begin to ask the inevitable question- now what?

It's not enough to know about passive income and be able to explain why it's freeing. The concept doesn't mean anything if it's not enough to pay your bills. Until your residual income meets and exceeds all of your bills not only are you not financially independent, but you're also still under an obligation to hold a job. Although this type of income is more valuable than a paycheck in the eyes of the wealth building community, first and foremost you need money to survive. So until you reach your goal of having enough passive income to maintain your lifestyle without a corporate paycheck- keep your job.

There are many reasons for this. Perhaps the most important is the old adage "It takes money to make money." Even the most inexpensive passive investments cost money to start up. Without more money coming in than out, how can you save money to invest with? When starting to build passive income streams, deal with your debt first. Then begin saving 10% of your income for a cash reserve used exclusively for investing. You may need to work a few more years before this grows large enough to work for you. As you build your passive income streams, and have more and more money coming in you will be less dependent on your job.

If your paycheck is already enough for you to pay your bills then anything you get from passive investments is all profit. You can use this extra income to save for retirement or build your cash reserve even faster.

Another important reason to keep your job is for credit. When investing in real estate and other things that you will need funding for, it helps to be able to prove your income. Many investors have difficulty getting conventional financing because they don't have typical jobs. If you still have yours, you can benefit from the lower interest rates banks and other traditional financial institutions have to offer.

That said, never lose sight of your end goal- to eventually become financially independent and be able to retire from corporate America. To do this you may need to spend nights and weekends searching for ways to build wealth, as opposed to relaxing and contributing to 401ks. You may think at first that this wasn't the lifestyle you signed up for- isn't the whole point of building passive income streams to have time freedom? Again you must refocus, and think about the long term. The actions you take now will go along way to retiring you earlier than you could have ever imagined.

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