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Passive income = Passive ROI
Human lIfe needs more than money to flourish. Amongst other things a sustainable environment, good food, money, social interactions and entertainment. Focusing on only financial passive income leaves all the other needs unattended. Money alone does not bring fulfillment. There are a gazillion articles out there on how to create financial passive income, however what about other alternative forms of passive income. The same reasons that make you think about financial passive income have parallels in other forms of income.
Learn more: What is Passive income?
1) Natural Passive income
Natural passive income is produced by natural systems. One apple seed can provide a thousands of apples over a the years, with very little maintenance. A hydro dam of a small stream can provide an electrical supply with minimal maintenance. Natural systems can be designed to produce a surplus with minimal human intervention. Permaculture brings concepts which can create forest gardens that can sustain human life, enrich the other flora and fauna.
The sun is the primary input of all natural systems. It is free and reliable. Timber trees, fruit trees and perennial vegetables all need the sun, soil and water to grow. With good permaculture design they would also need little or no maintenance. In return they will create a passive stream of good healthy food. Food which the owner can consumer directly or to share with friends and family to increase his social capital or sell for money as a side hustle.
Traps and snares are also can also provide passive income as they are installed once and then they work on their own.
A landscape with a permaculture design can include Solar water heater, Photovoltaic cells, wind turbines, Fish ponds harvest renewable energy passively giving you a passive stream of free energy. These systems reduce the ongoing costs making the financial passive income last longer.
There are many scams in the Teak Forest, Timber space
3) Cultural passive income
Johann Sebastian Bach, Franz Kafka, Edgar Allan Poe and Vincent Van Gogh have died poor. Saying that is a misrepresentation of their achievements. They have enriched the world with incredible cultural capital. With each generation appreciating their works of art, their cultural impact becomes richer. If culture had a unit of account they would be multi trillionaires. The concept of passive income is applicable to art; whereby a piece of art is created once and then it can keep on giving to both the creator and those who experience it.
A fictional eBook or selling music on Spotify are side hustles which can generate a financial passive income in the form of money, a cultural passive income in the form of art, and social passive income in the form of becoming an authority in a subject and having a following of fans.
Art helps us appreciate the non obvious, it inspires other pieces of art or great deeds it is a thing of beauty. What it gives is priceless, but that does not mean it is useless. On the contrary, when public appreciate art, the creators experience a feeling like no other. Certainly it cannot be bought through money.
2) Social passive income
Life is about social connections. No man or woman is an island. Social connections come in different forms from the intimate, to best friend, to good friend, colleagues, acquaintances and members of the same community, sharing the same interests.
Passive income is about getting back more than you put in something, I suspect that with intimate relations, best friend and good friends such an approach is counterproductive. Here the fact of giving more than you receive is the objective.
There is true potential for social passive income with other types of social relationships such as acquaintances and members of the same community, sharing the same interests.
Social influence is a true source of passive income. Influencers, then to form a following generally because they excel in a particular area and they share their knowledge with others. This one to many social relationships can scale. This scaling is what creates a passive income dynamic. Putting in an initial effort and then getting back much more in return.
For example. An influencer puts in a huge amount of effort to create a YouTube channel or a blog. Every page or video that is actively created becomes a stream of passive income. In addition, there are many extra benefits for first to know, speaking engagements, advisory roles.
Social passive income is hard to acquire and very easily to lose.
3) Government based passive income (The Welfare state)
Governments offer various services which can boost a passive income portfolio. For example in some cases it is possible to retire at 50 and use a private passive income portfolio to sustain a lifestyle until the age of 65, after which one can rely on government-based programs for that extra passive income.
The best thing to do is to get on your local government website and start learning what are the programs that you are eligible for.
Learning your way through the maze. Ticking all the boxed knowing what are the requirements to be eligible, observing any limits.
The Government maze of benefits provides several sources of passive income, such as:
Direct Government passive income (fedFire)
- Early pensions for soldiers, fireman etc
- Welfare payment for unemployment
- Federal / State pension
- Training Credits, Free Education
Government Systems that reduce your expenses and increase your passive income
- Social housing
- Child Benefits, Free Medical Care
- Other Social security benefits
- Government contracts and tenders
Financially independent is generally sought after by independent individuals, relying on their own brains and sweat to make it. Relying on governments can be risky. Rumours abound that public pensions are not sustainable in the long term because of government debt etc.
5) Financial Passive Income
Financial passive income provides you with a continuous stream of money passively. The difference between financial passive income and cultural passive income or social passive income is the resources needed upfront. For cultural and social talent, skills, education, training and time are needed to be invested upfront for financial passive income financial capital needs to be invested upfront.
The importance comes to light when realising that some of us are rich in capital but poor in time resources.
There are several ways to earn financial passive income:
- Rental income
- P2P lending
- Silent investor in a company
- Interest Income from deposits
6) Crypto Passive income
There are several systems out there that are simply scams. They come in two flavours one is a system which is obviously too good to be true and the second are systems which are dressed up as genuine but in fact are high risk and can collapse. Unfortunately, the cryptoverse is getting filled with more and more of these systems.
Side Hustles are the least passive of the alternative forms of passive income. They do have the potential to become semi-passive in the long term. Side hustles are not only of the financial kind. Taking part in a community garden (natural passive income), or in a neighbourhood art (cultural passive income) initiative or in teaching kids in your neighbourhood (social passive income) your favourite subject has the potential to give you back much more than you put in.
Side hustles on the internet have the advantage of keeping you mobile, this is important in today’s rapidly changing world. The news is filled with stories of Unfortunately people have had to flee their country. A mobile side hustles which can be carried out from a computer could go a long way to rebuild a life.
A Blog, A youtube Channel, An eBook can all be the basis of a side hustle. The catch is that to become good at something, to excel above the rest – prepare to invest 10,000 hours or so to start getting noticed!
- Side Business such as Blogging, eBook Writing, Youtube Videos
- Donations / Patreon
- Affiliate Marketing
- Inventions, Music,
- Royalty income via or Spotify
Bad Passive income (A word of warning)
There are many scams out there. Anything which is unregulated attracts a host of bad actors.
When it is too good to be true, it probably is. Scammers have gotten away more than once with scams promising some sort of passive income. The Crypto space is notorious for luring in newbies into some project which is nothing but hot air. Manu agricultural projects promising a stream of income from the sale of fruit or timber have failed.
While on this blog there is an ongoing brainstorm on how to boost passive income. This word “passive income” should not let us be locked in the golden cage of money. There is more to life than just cash. Passive systems which enrich rich life in other ways.
This article has been inspired by 8 forms of capital
Image courtesy of Loveluck at FreeDigitalPhotos.net