What is your time worth? When it comes to investing your time to produce passive income you will find that if you set things up correctly the financial rewards can be exponential. That is, if you invest your time correctly as you build things that will produce truly passive income later. As you explore passive income opportunities I believe you should consider the time investment heavily. Ask the hard questions.
- How much time will it take to ramp things up?
- What is the time commitment once the income starts?
- At what point does this truly become passive?
- Looking forward, how can I leverage my time to increase the results?
- Do you need to buy inventory that you must sell yourself?
These are all going to be great questions to ask before you jump into any “opportunity.” You should likely expect there to be initial time commitments that may have little, or no, return on time investment. However, as you progress the time commitment should become smaller and smaller. Therefore, the return on time invested will increase and it should become truly passive. If it will not be passive then be sure to fully realize what the return on time investment shall become and only you can decide if that works for you financially. This approach works the same whether you are pursuing stock investments, rental income, or starting a business. I believe the most passive income that may exist is interest income. This requires very little time investment on your part. However, the returns will most likely be lower than other passive income sources and you need to have money to earn interest. In conclusion, be sure you understand the commitment you are making when you sign up for any type of passive income source.