Enough talk...

Talking about how we can go about generating passive income is one thing. Doing it is another story.

I really like the idea of financial independence. I would like to be able to do what I love to do without worrying about money. I mean, if you love you job, there's no reason to quit. But that doesn't mean you should deny yourself financial freedom.

So I asked myself.... what do I want to do? Real estate requires quite a considerable initial investment. I would like to start with something that I can do on a part time basis because I have obligations that doesn't allow me to quit my current job. I want something that I can start with low initial cost. I do have savings but I don't want to blow everything in case it doesn't work out. So I look around and ask myself... what can I do? What business can I start given the constraints I have?

I stumbled upon Internet entrepreneurs that have been making a handsome amount of money on the Internet. Some of these people are millionaires. Irfan Khairi is our own Malaysian home grown Internet millionoaire. I reckon if I need to learn about Internet business, I might as well learn from someone who has done it successfully. So I enroled in his seminar and learnt the basics of what I need to know to start an online business.

One of the reasons I decided an online business as the way to go for me is because I need very little capital to start. Basically, there are two things that I need to start - a web hosting service and an autoresponder. There are many web hosting service providers. Depending on the service you choose you can get one for about $50 - $70 per year. You can set up an autoresponder account for about $20. So my initial cost was only about $90 (< RM400). Pretty cool, eh.

If you want to know what's a web hosting and what's an autoresponnder, stay tuned.

I made a number of mistakes when I first started and lost some money. I would like to share my mistakes with you so that you can avoid them if you're thinking of starting an online business.

I have to sign off now and continue my keyword research (I'll tell you more about this later).

How to generate passive income

Goodness! It has been three weeks since I last blogged. I was kept busy by a number of things. Anyway… I was talking about how to create passive income.

How do you create passive income? I mentioned writing books or producing an album and earning a royalty from your work as a means of creating passive income. But let’s face it – not all of us are John Grisham or Britney Spears or Shakira. So what alternatives do we have?

There is one form of investment that has stood the test of time as far as generating passive income is concerned. This investment has been used for centuries and produces returns without fail (when done correctly, of course). What is it? Real estate. The idea is quite simple. Search for a property in a strategic location (e.g. near the city center, within easy access to the city, walking distance to the LRT/tube station etc), buy it, find a tenant and you earn passive income every month. Look at any of the super rich, and rest assured that real estate is one of their investments. Does the name Donald Trump ring a bell?

What else can we do to create passive income? Build a business. How do we build a business? We build a system. I can almost hear you think… what on earth is she talking about? Here’s an example of one of the most successful systems in the world.

Ever heard of the name McDonald? Yes.. the fast food chain that sells burgers. What the founder of McDonald, Ray Kroc, did was build a system. He created a system that trains people to cook burgers, serve and sell them to the customers. Walk into any McDonald outlets and you’ll see the same menu and the burgers taste the same. Why? Because there is a system in place to train people to cook the burgers according to a certain standard and serve the customers.

This system is important because it allows the business to expand without Ray Kroc cooking all the burgers and serving everyone who walk into a McDonald outlet.

When you have a system that is efficient and effective, you needn’t be there 24/7 to run your business. You could be vacationing in the Bahamas or Hawaii and your business is still generating passive income for you.

But I don’t know anything about building a system and a business, I hear you moan. That was exactly how I felt. But you know what… don’t let that be a stumbling block. More on that later.