3 Strategies to Creating a Passive Income

Early in my 30’s, I started to believe that the possibility of becoming financially independent well before the ‘normal’ retirement age was certainly a possibility. I believed becoming financially independent was possible, but I certainly had the wrong plan.

If I continued doing what I was doing, I probably would have just ended up with a slightly more comfortable retirement. I want so much more out of my life than a comfortable retirement.

Like many others, I worked hard in my career. I received promotions. With every promotion I received a salary increase, but what also came with the promotion was extra responsibility, longer working hours, greater expectations, greater stress. My hourly rate of pay would not have increased, given the extra hours I was working. Yes, I had the wrong plan. I had to look outside of a working career to find financial independence in the relative short-term.

So what were the options?

To me financial independence is a position when my monthly passive income covers my monthly expenses. I am longer dependent on a wage. I am not working extremely hard for somebody else with no control over the income I am earning.

My mind is frequently focused on passive income. Or focused on how can I increase my wealth and my income so one day:

  • My ‘working hours’ are spent volunteering with my chosen animal or environmental charities.
  • I have created a foundation that purchases large parcels of land to save habitats or species under threat.
  • Basically to be free to live my Primary Aim.

Examples of passive income are:

  • Repeated regular income generated from the payment of a product or service that must be renewed on a regular basis.
  • Rental from investment property.
  • Royalties from publishing a book or from licensing a patent or other form of intellectual property.
  • Earnings from internet advertisement on your websites.
  • Earnings from a business that is well systematized and does not require direct involvement from the owner.
  • Dividend and interest income from owning securities such as shares and bonds.

My chosen method is to systematize the businesses so I can spend my time working on the business rather than in it. This will protect my income stream whilst having time to pursue my Primary Aim. Income earned through the businesses will then be used to purchase investments to generate further streams of cash-flow and generate wealth.

In summary

These are the three models I am applying to have a number of different streams of passive income. I do not rely on one source of passive income.

  • Building a property portfolio over the long-term, using a buy and hold investment strategy.
  • Systematizing our Registered Training Organisation, which enables other qualified trainers to work with our clients, rather than myself.
  • Building an internet based educational business.

No matter what type of strategy you use, you need a system where you are fully informed. You need the ability to make your own decisions. Not all business opportunities require a large investment of money, but most require a large investment of time before results are seen.

Will your chosen system provide you with the passive income and long-term wealth you are seeking?

We go to university and study for a minimum of three years for many careers and then think we need no education and commit hundreds of thousands of dollars to an investment, or thousands of dollars and even more time into a business opportunity.

Always consider a business an investment. Just like property, a business is also an investment. You are investing possibly money as well as time. And in return for that time and money, you expect to be rewarded. The ideal reward is wealth or long-term passive income. So a business opportunity is not just a potential income, it is also an investment. You’re thinking and expectations should be long-term wealth and passive income.


  • Phillip Johnson

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