Is $10K spread out over 10 years a good paycheck for 6 months of work? No, I could easily have earned more money working at a job. I was already earning more than that from contract programming work before I wrote my first independent game.
The point of creating your first passive income stream isn’t to achieve that big payout right away. The point is to learn how to create passive income streams, so you can get better at it. Then you can create bigger streams as your skills increase. Don’t expect your first effort to be your masterpiece.
Today I can create new streams of passive income with a lot less effort than I had to exert in the 1990s. The reason I can do this is because I put in the time to learn how to do this, and I’ve continued to refine my skills over time.
Don’t worry about how big your streams are in the beginning. If you can create a $50 per month passive income stream this year, I think that’s great. And it’s so much easier to do this today than it was back in 1995 when I first started, so you have it much easier than I did. Your cell phone is probably 100 times more powerful than the computer I used back then.
Do set goals, but be patient with your progress. This is a skill that will benefit you your whole life. Even if you work on this for 10 years, there will still be plenty more to learn.
My Passive Income Goal
Since I want to keep this simple and not overcomplicate things, I’m going to set what is for me a relatively conservative goal:
I create a new stream of passive income by December 30, 2019, that generates at least $2000 per month on average and endures for a minimum of 10 years.
So this means creating a new stream that earns at least $240,000 over the next decade.
This seems like an achievable goal for me. I’ve already created multiple streams of this size and larger, so it’s not a stretch to believe that I can do it again. In this case the challenge will be to explain all the steps as I go along, which I’ve never done before. I want to keep this goal fairly basic, so I can focus on the teaching aspect.
Having a clear and specific goal helps me transition to thinking about the how. Now I can start pondering ways to do this.
This also helps me rule out what I can’t do to create this income stream. I can’t just do more public workshops or paid speaking since that’s active income. I want to set something up once and have it generate monthly income for at least a decade.
What happens if I don’t make the deadline? Nothing. I’ll set a new deadline. The deadline is a focusing mechanism. I could create a new passive income stream within a couple weeks if I want to. And I’ll probably create other streams along the way that I don’t blog about. But for this stream, I want to take it slow and explain the process in detail, so you can follow along. But I also want to keep moving towards some kind of release. I don’t want to get stuck in perpetual idea mode.
Your Passive Income Goal
The key to goal setting is to get into the habit of setting and achieving goals. It’s not to set aggressive targets that you never reach. You can always set a bigger goal later once you achieve the original goal.
Sometimes I’ve set a big goal with a two-month deadline, and I achieved it during the first week or two. So I celebrated that. Then I set a new goal with a new deadline.
As long as the goal seems motivating to you and it helps you get into action, then I’d say it a good goal for you.
My suggestion would be to set a goal something like this:
I create a new stream of passive income by May 31, 2013, that generates at least $100 per month on average and endures for a minimum of 5 years.
I think this is a very achievable goal for most people. You don’t need your own website to earn this much.
Now some people will blow this goal out of the water; it will be way too easy for them. Other people will find it a serious challenge. Feel free to adjust the goal to something that feels good to you.
If you were to achieve the goal above, you’d put at least $6K in your pocket, but it’s not the amount that matters. The real aim is for you to learn how to create a $100 per month stream of passive income. Once you learn how to do that, you can surely do it again. Do it 10 times, and you’ll earn $60K passively.
Once you learn how to earn $100 per month in passive income — by actually doing it, not by reading about it — then it’s not that difficult to learn to create bigger streams. So instead of creating 10 streams that collectively generate $60K, you might learn how to earn that much with just one or two streams. As you continue to develop your skills in this area, you’ll discover how to earn larger sums with fewer streams and less effort. If one stream dies, you’ll also know how to replace it with a new one.
I’m pretty comfortable creating streams that earn around $50K per year. When I had third-party ads on this website several years ago, one of those streams was earning more than $100K per year. Once you get the hang of this, I think you’ll find it a fun challenge to create new streams of income and to experiment with different approaches.
If you want more long-term financial security, you won’t find it in the money or even in the streams of passive income. You’ll find it in building your own knowledge and skills. You can take away all my streams of income, my website, my assets, etc, and I’ll be able to recreate the same level of financial abundance in a relatively short period of time because I already know how to do it.
This is what I want for you as well. I want you to learn how to do this, so then you’ll always have that option available. This know-how will relieve you of much financial pressure. You won’t have to scramble to get a job to pay your bills. You can just create more passive income streams if you want more money.
Do It Now
You are NOT done reading this post until you’ve set your goal and have written it down. If you haven’t done this yet, do it right now.
Once you’ve done that, I encourage you to also post your goal in public — IF you can do this in a place where you feel that people will support and encourage you.
If you expect mostly positive support, then share your goal on your blog, your Facebook page, etc. Add some accountability and commitment like I’m doing. This can help motivate you to succeed, and you’ll inspire others to develop this skill too.
If, on the other hand, you anticipate a largely negative response if you share your goal publicly, then you have a different challenge to address. This means your life is filled with too many incompatible people. You have too much social drag. These people are only going to get in your way, so if you don’t think you can win them over, then drop them. Block them, unfriend them, etc.
If other people have a problem with your setting a goal in this area, what are they going to be like when you actually succeed? They’ll probably get worse, and then you’ll have to deal with problems like pettiness, jealousy, sarcasm, neediness, and more. Better to cut them out now and fill your life with positive support. Let them learn from your example… from a distance.
Prepare to succeed. Expect to succeed. Know that once you’ve set this goal, you’re going to achieve it. And if you’re going to achieve it, then you need to start shedding from your life whatever would otherwise get in the way of your goal. Whoever can’t handle it, drop them. This will create space to invite much better relationships with people who will support you on this path. The dead weight must be shed, so that positive support can come through.
While you ponder that, be sure to check this out.