Do you have thoughts about generating a PASSIVE INCOME so that you can achieve FINANCIAL FREEDOM?

Or escaping the RAT RACE and 9 to 5 grind?

Or RETIRING EARLY to a life of FREEDOM to do exactly what you want whenever you want?

If you do, then guess what?

It is not going to happen on its own!

You are going to need a PLAN and you are going to need to take regular ACTION in line with that plan.

Dull and boring, I know, but passive income doesn’t grow on trees!

What Is Passive Income?

The American Inland Revenue Service (IRS) defines passive income as:

income from trade or business activities in which you do not materially participate.

As far as the IRS is concerned, this includes earnings derived from a rental property, limited partnership or other enterprise in which an individual is not actively involved.

In other words, it excludes income from investments, dividends, interest, royalties and capital gains.

The IRS classifies these differently as Portfolio Income because it is not earned through normal business interests.

Why does this matter?

Well, it only matters for tax reasons.

For our purposes – FINANCIAL FREEDOM – we couldn’t care less how the income is derived.

All that matters to us is that we don’t have to work FOR a business/organisation or IN a business/organisation to generate our income.

Passive Income Ideas

So for our purposes, some examples of PASSIVE INCOME are:

  • Earnings from a BUSINESS that does not require direct involvement from us (presumably as the owner);
  • Rent from PROPERTY;
  • ROYALTIES from copywriting a book or music;
  • Licensing a PATENT or other form of intellectual property;
  • INTEREST from savings accounts;
  • Dividends and capital gains from STOCKS and SHARES.

So you now know how to generate an income without working for someone else as an employee or working in your own business as a self-employed trader or business partner/owner.

So what are you going to do about it?

What’s Your Passive Income Plan?

If you want a BUSINESS of your own that you don’t have to work at, it will take you a substantial effort to set that up and get it going.

Even then, there’s no guarantee of success with 50% of new businesses failing in the first year and 80% failing in the first 3 years!

So what about PROPERTY then?

Well, property needs lump sums for deposits and it needs mortgage lenders willing to lend.

Even if you have the cash for a deposit, banks are short of cash themselves these days and much less willing to lend than they were, say, 5 years ago.

Even if you drop lucky, you will need to find someone to occupy your property and you’ll need to spend money maintaining it, etc.

You will also incur high transactional costs whenever you  buy and sell which need to be factored into your plan.

I’ve looked at property long and hard myself but, in my view, whilst property can be a useful source of income, buy-to-let property investment is very lumpy and extremely difficult to do well.

Alternatively, if your are extremely talented, you could write a book or write some music to earn ROYALTIES.

This is possible of course but is extremely unlikely for most people and requires a good deal of work in the first place to generate the copyrighted material in the form of a book or music.

You could invent something and PATENT it – any ideas?

No I thought not.

That rules that out then!

Do you have enough savings so that you can live off the INTEREST yet?

Any idea how much money you would need?

Well with an interest rate on savings of 3%, you would need to have £1,000,000 in the bank to generate an annual income of £30,000 before tax!

If you are reading this blog post then I guess we can rule that out as a possibility then?

Unless you are planning to win the lottery!

If you have worked long enough to have a PENSION then you could retire.

But if you are dreaming of retiring early, then it is unlikely that you have got to this stage yet and so you will still need a SECOND INCOME STREAM to supplement it.

In any case annuity rates for a 55-year-old are around the 5% mark currently and are getting worse due to population longevity increases.

If you are 55, just so that you know, you will need a pension pot of £600,000 if you want an annual pre-tax income of £30,000.

Annuity rates vary by age so if you are older than 55, you will get a higher % rate and if you are younger, you will get a lower %.

So, that brings us to STOCKS and SHARES then.

Advantages of Stocks and Shares

Stocks and shares are the same thing.

Americans usually use the word stocks, whereas the British use the word shares.

I could get picky and start waffling about bonds and things but I would be splitting hairs so I won’t.

Some of the advantages then are as follows:

  • You can invest as little or as much as you like;
  • You can start with small sums such as £50 or £100 if you wish;
  • You can invest monthly or invest a lump sum;
  • There are lots of different shares to choose from;
  • You can buy shares to generate income;
  • You can buy shares to achieve capital gains;
  • You can buy a basket of different shares to build a de-risked portfolio;
  • Transaction costs for shares are low, much lower than property;
  • Apart from stock picking and buying, it’s all passive after that;
  • You can buy shares in different stock markets across the world;
  • You can buy shares in one country that earn their income in another;
  • Some company shares operate in more than one industry and so are diversified by their own nature.
  • etc.


This is obviously not an exhaustive list and I could go on but I’ve probably listed enough advantages.

If you are new to shares you have probably not given them much thought before but these advantages make them worthy of investigation.

That’s what I thought 25 years ago when I started investing in shares.

You probably think they are risky because that’s what television news programmes and financial advisors tell you.

Oh yes – financial advisors – my favourites!

I’ve used a lot of financial advisors over the years and, don’t get me wrong, they can have their uses.

For example, they are very useful if you want to buy an insurance product or a pension, for example.

But I’ve learned to avoid them like the plague if I want to invest.

In my humble opinion, the reason that financial advisors don’t like company shares is because they can’t make a commission selling them to you!

That’s why they sell you mutual funds, unit trusts, pension plans, investment plans, endowment plans and any other kind of structured investment plans that they can charge a commission for.

What they again won’t tell you is that most of these plans, if not all of them, are invested in stocks and shares, bonds and cash!

In other words, you are paying fees (substantial fees in many cases) to end up invested in those risky stocks and shares that they tell you to avoid or in a bank savings account!

So what do you think I do?

That’s right, I cut out the middle man and keep those fees for myself to earn bigger and faster returns!

And what’s more, if you can add up, understand percentages and have a reasonable level of intelligence, then so could you.

You don’t have to be a Harvard business graduate or a rocket scientist to invest in shares.

You don’t need to have vast pots of money.

You don’t need to have lots of time to build it up or write it or develop it first.

And it’s never been easier or cheaper to invest in shares than it is nowadays.

What’s Your Passive Income Plan Look Like Now?

It’s a New Year and we are still only 3 weeks into January.

So there’s no better time than now to make a positive start!


Make TODAY the day when you finally start INVESTING in your own LIFE and start to create your PASSIVE INCOME stream as a route to FINANCIAL FREEDOM


YOU can start right now by signing up for my FREE Guide – How To Start Investing In Shares.

The Introductory Guide won’t be available FREE for much longer so why not sign up below, now, and make a start on your PASSIVE INCOME?

Or if you have any questions, you can ask me anything you like by following this LINK.

Warm regards,