Categories: Business, Career, Money

How would you like to earn money while you sleep? Sound a bit too hard to believe? The fact is, millions of people earn a good proportion of their income in their sleeping hours.

Passive income is money you earn for actions you did a while a go. Interest on your bank account, for example. Or stocks and shares. These are cases where you put money somewhere where it will continue earning for you. In other words, the money you’ve worked for now works for you.

But passive income is also the main source of money for artists, businesspeople and inventors. They put in work once (e.g. wrote a book) then received money from it continuously for many years later (e.g. Royalties.)

For example, did you know that Elvis Presley earned £25million in 2005 – despite having died in 1977. His family are still earning money everytime his CDs are sold, or his music is played in public.

This is a crucial difference between how financially successful people view the return on their work. They don’t expect to do something once, and get paid for it once (pay by the hour). They expect to do something once, then get paid repeatedly for it.

Most people go to work and get paid for the time they were there. If they want more money, they have to put in more time.

When Madonna goes into a studio, she’s not going in to pay the bills. The royalties from her earlier work will more than do that for years to come. She’s working to grow her royalties.

Wage earners work to sustain their income. Passive earners work to increase their income.

When I build a new website, I don’t get money for it immediately. Instead, I put advertising on it. This may earn me just a few pence a day. But remember: that’s money for old rope. Once the site in place, it becomes a little money-earning-machine. Every time I build a new site, I’m growing my income – not sustaining it.

Of course, this does mean that you have to sacrifice in the short term. Wage earners get paid for a month’s work at the end of the month. You may not start seeing returns for half a year or more.

Look for ways to build a passive income – something that you work on once, yet are paid continuously for with little extra effort.