The disadvantage of being human is this. You can only be in one place at a time. This means that you can only effectively engage in one source of active income at a time. An active income is any income that demands your full time and participation. A typical example is a Job. When your active source of income is limited to one source. It slows down the achievement of your financial goals. To speed up the achievement of your goals. You need to earn more active income. To earn more active income, you have two choices to make. The First choice is to extend your working hours beyond reasonable limits. The second choice is to deepen your capacity to add value. Increasing your capacity to add value is the most elastic choice of the two. Thus, expanding your ability to earn active income. Through the expansion of your capacity is the only way to achieve your financial goals. Since active income can help you achieve almost any financial goal. It is the most powerful type of income in the world. The more active income you earn. The faster you reach your goals. The only problem is there is a limit to how much active income you can earn. Since your choice of active income is limited. What then can you do to increase your income?

To Increase your income, you must convert your active income to passive income. A passive income is any income that does not require your full participation and time. But require the full participation of your savings. To earn passive income, you must put your active income into a money growth vehicle. The most potent money growth vehicle in the world are investment vehicles. Investment vehicles have the capacity to grow invested capital. Investing is thus a way to grow existing capital. And not earn new money. Thus, the creation of a passive income through an investment vehicle depends on an active income to thrive.

So how then can you create a reliable Passive Income?

To create a reliable passive income. You need to first understand that not all passive income is created equal. Certain passive income is irregular. Others do not produce any income. Yet some others produce income that cannot carry the weight of your bills. Thus, when creating a passive income, you must ensure it can take the place of salary. To create a passive income that can handle your bills. You must do three things. First, you must set Clear and Specific Financial goals. That is those goals that help you see the financial weight your passive income will carry. Second, you must boost your savings capacity. And third, you must choose the right combination of Investment vehicles. To understand how each of these components can help you achieve your financial goals. Let’s go over them in detail.

First, Setting clear and specific financial goals. When I ask working-class professionals what their financial goal is. I usually get a chorus answer-Financial Freedom. While Financial freedom is a goal. It is not clear until you break it down into clear and specific actionable steps. Breaking a big goal down is important because you can only take action. When there is a clear path to follow. To clarify your goals. You need to make them actionable, Measurable. And arrange in the order of priority. You also need to separate goals you can achieve now and those that are a long-term dream. A good Goal clarification process will help you move from a state of confusion and inaction. To a place where you are confident to take action. Achieving a reliable Passive income thus starts with a clear goal. When your goals are clear. The next thing you need to do is increase your savings capacity.

Savings is the seed for your Passive income. Without it, you will continue to depend on depreciating active income. If you want to leave stressful work someday. You must become a disciplined and above-average saver. Many people ask me about the right percentage of income they should save. My answer always is it depends. It depends on the goal you are trying to achieve and how fast you want to achieve that goal. For example, if my goal is to build a Duplex within six months. And your goal is to build a one-bedroom Flat within two years. We cannot approach savings the exact same way. While you may achieve your goal saving 20percent of your income. I may need to save 50% or 70% of my income. To reach my goal. Your savings percentage is thus set according to the weight of your passive income goals. The bigger your goals. The bigger your savings. And the shorter your timeline. The higher the amount you should save. Without the discipline to consistently save above average. You cannot build a solid passive income or achieve your financial freedom goals. To boost your ability to save. You must work with a Budget. Tame your Financial Responsibility. And limit your expenses. Overwhelming responsibilities that take a big bite on your income destroy your ability to save. People who struggle with savings the most. Are people who allow responsibilities to pile up, on them.

Next is you must choose the right combination of investment vehicles. That will grow your savings. And protect your invested capital. Most people think that one investment vehicle can take them to their dreams. The truth is you need a combination of carefully chosen investment vehicle. To achieve your financial goals. These investments must be combined in ways. That aligns with your current financial stability and Lifestyle. A good investment portfolio prioritizes Protection and financial stability First. Before risky returns. This is the only way to stay safe and peaceful in a turbulent investment market. Thus, your investment risk must be chosen based on your current financial stability. And not based on your age or returns. When you create a Passive income. You want it to be secure, protected, and active when you need it. This is the only way to build a passive income you can depend on. In the absence of salary.

A day is coming when your active income can no longer carry you. What is your plan to thrive after this day?