How to create automated extra income?

According to many experts there are many definition of passive income but to me it simply means earning money with 5% of your time and involvement.

In order to achieve any reasonable income, you will need to under go some initial seting up and then periodically manage the income process. For active income, I will allocate about 95% of your time to earn. For passive income it will be 5% instead.

Active Income vs Passive Income

Let me further explain the difference between active and passive income. For most working adults like accountants, architect, doctor, engineers and administration staff officer, they are earning an active income whereby they are paid according to your time spend performing their expertise in the required field. Therefore they are spending 95% of their time in achieving their income actively. There are many more examples around you and me.

For the other adults like entrepreneur, investment manager, business owner, dividend stock owner, franchiser and property rental owner, they are earning income passively. They are paid not according to their time involvement but rather paid for automatically after they setup the passive income process, thus only 5% of their time. But they still have to manage the process in order to gain passive income.

The beginning process

When I mention startup or initial setup process are like searching for the property to buy and rent, research for the stock that pay good dividend, looking for the business to buy so it can generate passive income and finding the best profitable franchise to setup. While you may see this process as difficult and time consuming but it is equally import as finding the best company to work and getting ready for interview.

As we are going into the internet fast lane and everybody is going towards non-traditional working and company are going for more diversity earnings from the conventional business model. As new model or I call it process exploded and quickly gains a lot of interest from many different communities. The very famous examples that I can quote are facebook, Google, Amazon.com and clickbank, all this different communities each grow within its own way. On top of this, I select some and actually did some research on each passive income that is created by this new group of internet user.

Dividend from Stocks

One of the most old and long exist way of earning passive income is buy shares that yield 5 to 10% dividend annually. This is actually a good way of passive income as you only have to do homework to research on the stocks company performance and once you selected and purchase the stock, it is automatically gaining passive income for you as the company is run by a group of management staff lead by CEO which makes all decision and you only need to know the annual Profit and loss and the dividend payout you will get. If the stock company you buy not performing, you can always sell and buy other profitable company.

Profit from Franchise

This is the fastest growing method of business which allow individual business owner to operate and manage business by following a working profitable model. In turn, minimize the creating process for new business and instead channel it to hiring people to run the franchise. The profit gain is automated income as you will have a manager to operate the outlet and any update on business model will be provided from the franchiser headquarters. One of the fastest way to establish a passive income.

Property owner

Lands, houses and apartment are valuable assets every where and owning them for renting is already very popular on any country. Buying a good location property would mean a good rental income which is a passive income for the owner. Many billionaires growth richer by owning property with good yield and created even more wealth by purchasing and selling them.

Automated Forex Trading

This is a relative new passive income with involves searching the fund manager that you are confident and let them manage your trading account. By automating this process, your profit gain is passively by the trading in your account. Forex is the largest currency trading markets and more volatile then stocks and less counters to choose from as compare to stocks.

Source: http://www.bestforexranking.com