One Friday night last month, after checking, answering, and then
deleting or filing in Outlook all my emails, we left the house at
6pm to get a quick dinner.
When we returned at 7:30pm, I checked my email again.
In the 90 minutes we were out, I had gotten $907 in info product
orders online, all for products I was not actively promoting that
(We call these “over the transom” orders because we took no
deliberate action to generate them.)
No work on my part. Over $900 made while eating in a Korean
(Full disclosure: this is an isolated incident — and not a
typical Friday night.)
Some people work all week to make $900 in a 9-to-5 job that bores
One that they must commute to and from on their own time and dime
— for a boss they don’t like
I tell you this not to brag, but to illustrate (a) the value of
having multiple streams of income and (b) the advantage of having
at least one of these be a stream of passive income.
Just to be clear, passive income is anything that makes money
without your direct labor.
Passive income streams generate cash flow for you on Sundays,
holidays, vacations, and even while you sleep.
As George Clason writes in his book The Richest Man in Babylon,
“I wish an income that will keep flowing into my purse whether I
sit upon the wall or travel to far lands.”
On the other hand, with active income streams, you get paid only
when you are working.
Dentistry, for instance, although lucrative, is strictly an
active income stream.
Dentists have a saying: “Unless you are drilling and filling, you
are not billing.”
Most people I know have, for the most part, only a single stream
of income — typically the paycheck from their full-time job,
where they toil away to make someone else rich.
And unless you are getting a huge salary, that’s risky … although
back in the day, when I worked on staff at a Fortune 500 firm in
the late 70s, a corporate job gave one the illusion of security.
I know I felt safe in mine.
But no longer.
The scary part is that if you get laid off or the company
falters, you suddenly have zero income … except for a small sum
from temporary unemployment insurance.
Your income stops. But your expenses relentlessly keep on coming.
This sudden stoppage of your cash flow makes it extremely
difficult to pay your rent, mortgage, car loans, insurance
premiums, property tax, and kids’ college tuition — among many
When I became a full-time freelance writer in February 1982, my
main source of money was an active income stream — writing copy
But even back then, I had a smaller passive income stream:
royalties from my hardcover and paperback books published by
mainstream publishing houses.
The nice thing about royalties is that your work can generate
ongoing income for you months, even years, after you write it.
For instance, I recently got a check from one of my publishers
for $4,856 … for the Chinese edition of a book I wrote in 1985,
which is work I completed more than 3 decades ago.
Some of the passive income streams various writers I know have in
–Reselling your published articles to multiple magazines and web
sites over and over.
–Real estate investing.
–Stocks and bonds.
–Online information marketing.
Action step: develop at least one active income stream and one
passive income stream.
Your goal: Build them to annual six-figure revenues. Each.
That way, if you decide to quite working someday, you can live
comfortably from the passive income stream alone.