9 Solid Strategies for Wealth Creation and Passive Income Streams

Wealth creation and passive income streams really can be put on autopilot. The secret is to implement the absolute best strategy for you.

Your first instinct after reading this title may be to assume automatic means “easy” or “no work”, but that’s a dangerous road to go down.

It’s a simple concept, but it’s not easy or everyone would be wealthy… auto-magically.

Automatic really just means systematized.

There’s a lot of work, sweat, and thinking that goes into building something that becomes automatic.  The key to building wealth is to create a system with residual cash flow, preferably on a monthly basis.

This is also referred to as passive income.

Creating multiple sources of passive income is how you create financial freedom and financial freedom is what wealthanizing is all about. Once you become financially free, you can build your passive income stream(s) as large as you want them to be.

Below are the top strategies for wealth creation and passive income streams:

1) Create Wealth with Passive Streams of Income

make money block text on chalkboardIn the book The Richest Man in Babylon by George S. Clason, the concept is described as creating golden streams of income. Once you create one golden stream of income you can create multiple golden streams.

These are income streams that once created continue to pay out each and every month. Create enough of them (or one massive river) and your bank account is automatically replenished each month.

You may be wondering how you will think of a new idea or trinket you can bring to the market place to create these income streams.

But in my experience, it’s the implementation that you should focus on. There are lots of proven models out there that you can borrow from and use to build your income stream.

Creativity only pays if it’s applied to a proven income producing strategy.

Instead of trying to think of something new, focus on something you know you can get done and then go do it. Most producers of the world are the ones who make money using tried and true methods, not new ones.

They simply execute on proven strategies. In fact, it’s been said that settlers prosper, pioneers get slaughtered.

Here are some money making ideas that are proven to work if you implement them correctly.

a) Have a smartphone app built that you can bring to the market.
b) Create a massive network marketing organization
c) Produce quality informational content that you can sell online (through website OR self publish on Amazon)
d) Create “How to” programs in the form of videos that walk people through the nuts and bolts of how to accomplish a task
e) Create a SAAS (Software As a Service) product for local businesses and then provide it for a monthly service fee
f) Rank and Rent– Create local business websites optimized for SEO and rent them out (they must rank for the industry of your end buyers)
g) Offer quality affiliate programs

There are so many ideas you could implement to create passive income and you don’t have to be able to do them all yourself.

For example, you could outsource creating an app, writing a book, or a variety of other things. It would cost you some money upfront, but there are people who will happily rent their skills for a one time guaranteed fee.

Then you own the product that you can sell over and over, which becomes a golden stream.

Done correctly, this can turn into a golden river (a stream… but bigger!).

2) Adopt a Millionaire Mindset (Change your thinking)

PLEASE (for the love of all that’s Holy)… don’t skip this section.

It may sound like fluff, but the truth is if you don’t change your thinking patterns, nothing will “work”. You’ll be perpetually looking for that goose to lay the golden egg, instead of building a mechanical goose yourself.

The best part about building your own goose is that after you do it once, you can recreate it again- rinse and repeat.

The truth is, geese that lay golden eggs are self-made and once created, their creators tend to hold on to them.

The problem is you may be tempted to feel defeated when thinking about the big picture.

When you think of being rich or financially independent, you probably think of being a millionaire and having millions of dollars in the bank.

That can be intimidating and the process you’ll have to go through to get there can be viewed as a daunting task. In reality it just requires a small shift in thinking.

First, you’ve got to start thinking about how to create those golden streams I mentioned in the section above.

Stop thinking about swimming in the lake (or ocean) those streams will create, instead start focusing on what tasks will get you there.

For example, let’s say you’re overweight and need to lose more than 50 pounds to be at your goal weight.

The idea of losing so much can feel impossible. But if you focus on losing a pound or two a week and commit to making it happen consistently each and every week, it won’t take long before you achieve your goal.

The same thing happens with creating passive income except it can be leveraged.

For example, if you’re losing weight, it’s just you. There can only be one YOU losing weight.  It’s not leveragable. What I mean by that is you can’t enlist a few friends to help you lose YOUR weight.

However, golden streams of passive income are scalable.

There can be as many as you create. So if you find a way to make $250 a month passively, you can keep that going and then create another stream of revenue.

Then do it again.

Eventually, all those add up and you’ve got some really good income flowing into your bank account.

Too often, we focus so much on the big picture (the fifty pounds we need to lose) that we lose motivation and either resign ourselves to our current circumstances or we commit to “trying” something without making a real commitment to change our lifestyle.

Mostly because we don’t really think we can do it. Let’s face it, nobody wants to start something they don’t think they can finish.

But if you’re going to create the life you dream about, you’ve got to start thinking about how to get there. That will require a shift in thinking and you’ll need to adopt a millionaires mindset.

“The only thing worse than starting something and failing is NOT starting something” (Seth Godin).

The issue isn’t the size of your goal, the issue is you’re focused on the wrong thing.

Shift your thinking slightly and ask yourself this question, “Do I have a better chance of making and saving enough money in the bank to live off the interest (as the old saying goes) or do I have a better chance of replacing my current monthly income (and more) with a side business?”

The answer is usually the latter unless you’ve already amassed a fortune, in which case you wouldn’t be reading this article.

3) Plug the Leaks – Stop Wasting Money

This is where the rubber meets the road. No matter what your current monthly income is, if you haven’t already taken a strong look at your expenditures, you’ll need to do that. Where are you bleeding money?

No matter how much blood a doctor transfuses, if they don’t stop the hemorrhaging, it’s all for nothing.

boat-floating-by-weeds

Imagine your finances like a boat and financial freedom as a destination. Your boat (your income) can get you to financial freedom, but not if it’s leaking.

If it’s leaking you’ll travel slower and depending on the size of the leak, you may sink.

If you find yourself in a sinking ship, you’ll probably need to make some lifestyle changes to make it work.

Once you get to your destination (financial freedom) you’ll have more income and more options. At that point you can then buy a bigger, faster boat if you want to or spend more money on incidentals.

The first step is to look at your current financial situation and figure out where there is money going out that doesn’t need to. Then re-purpose that money to use it to propel you forward instead of it slowing you down.

There are many ways to do this. Paying off debt is a way of speeding up your journey. Saving is a way of speeding up the journey. Investing in something you can turn a profit on is a way of speeding up the journey.

But spending money you don’t have on things you don’t absolutely need, (to impress people you probably don’t like) should always be suspect… it only slows the journey down.

I’m not advocating spending your whole life pinching pennies, but sometimes it needs to be done to get some momentum.

In the beginning it takes some work to plug your financial leaks. But once those leaks are fixed, more of the money flowing in will automatically stay in the coffers until you use it. Automatic = passive.

4) Implement the wealth creation and passive income elephant strategy

elephants on grassland

One of my favorite questions about goals is “How do you eat an elephant?”
Answer: “One bite at a time”

Lots of people dream about what they would do with great wealth. But only a small percentage of the world’s population go out and make it happen. Stop focusing on massive amounts of money or get rich quick ideas and consistently take action on the smaller task of replacing your current income with passive income.

Replacing a portion of your current income with passive income is the first bite of the seemingly impossible task of creating over-abundance in your life. Once you’ve done that, you’re ready for the next bite.

Mark Zuckerberg may have thought Facebook would get as massive as it is… or maybe he didn’t.

Either way, he started somewhere and as time went on he could see further down the road. You’ve got to learn to do that in your own life. Take a few steps and then take some more.

When the stars align and your efforts start gaining momentum, run as hard and as fast as you can.

If you currently make $2500 a month and creating that amount of passive cash flow in your life seems like it’s own elephant, then you’ve got to break it into even smaller pieces.

Try to find ways to earn $500 a month if that seems more manageable. Why? Because how do you eat an elephant trunk? Answer: (same) One bite at a time.

You only need 5 sources of passive income making $500 or more a month to replace a $2500 a month income. One of the biggest problems a person faces is belief. Your beliefs can work for you… or against you, but if you don’t believe you can succeed in any endeavor, you’ll never start. That’s human nature.

In fact, sadly, belief is why I am talking about small numbers here. Unfortunately, if I spent time talking about creating $2500 income streams until you have ten, (which would give you $25,000 a month passively), many people would zone out thinking it’s not possible.

It only goes up from there. This is low hanging fruit my friend.

If you’ve been putting something off or not taking the actions you need to take, then step back and take a long serious look at whether or not you believe you can succeed. Often times, the biggest problem can be found between your own two ears – your thinking.

5) Study and Understand the Rules of the Game

official game umpire standing with back to photographerLearning should NOT have ended in high school. For some, learning NEVER STARTED in high school. But I digress…

If you’re going to play a game (and building wealth is indeed a game – with a scorecard), you need to learn the rules. Bring people to your team who know the rules and can help you navigate the game. (Hint: Get a good tax guy or gal and a mentor who understand passive income).

There is a book in the Rich Dad Poor Dad series, created by Robert T. Kiyosaki called Retire Young, Retire Rich. In it, Kiyosaki states that there are three main sources of income. They are…

(1) Earned Income

(2) Portfolio Income

(3) Passive Income

Earned income is old fashioned work for a paycheck income. This is when you trade time for dollars. The amount you make depends on how much time you trade and how much you are able to charge per hour.

Portfolio income is generated by interest and similar financial investments. These instruments are technically passive, but the gains are smaller. The exception would be capital gains, which I believe falls into portfolio income.

The problem with capital gains (other than the huge tax bill) is that once you stop actively buying and selling whatever you’re getting capital gains on, the game stops (or at least pauses).

Passive income is what we have been talking about here as a main driver of building wealth from scratch. It is by far the most powerful place to start because it’s a way to start small, focusing on consistent activity centered around one goal, and scale up from that in order to create more passive income.

Regardless of how you decide to build wealth, you’ve got to become an expert on the rules of the game. Study what others have done and continue to learn. In sports, coaches make players do drills and practice the same basic skills over and over. That’s how it becomes habit and how perfect execution occurs.

The game of money is no different. Keep practicing and learning. Over time, your execution on ideas and implementation of strategies will improve. But if you aren’t consistently feeding your mind with new ideas (books, audiobooks, podcasts, articles, research, etc.) you’ll never learn what you need to learn to get financially free.

Since you’re reading this though, I applaud you. Seek and ye’ shall find.

6) Upgrade your Primary Residence Every 2 years

white house with brown doorThis one is great but don’t believe a word I write. Consult your local tax specialist before making any decisions.

This strategy is more about building wealth automatically by leveraging what you are already doing… which is living in a house.

That being said, understand that in certain circumstances, you can sell your primary home and not pay capital gains up to $250,000 (if single) and $500,000 (if married).

There are a few things you have to do to qualify.

  1. You must own the home two years before selling
  2. The home must be your primary residence
  3. You must have lived in the home at least 2 years out of the last 5 years (those two years don’t have to be back to back)
  4. You can’t have used this strategy in the last two years. 

There’s more to it, but those are the biggies. Again, your tax specialist should guide you through this process and the qualifications before you do anything. the purpose of this section is to let you know it is available and also that the qualifications aren’t ridiculous.

Why is this a great strategy?

First, if you were wise in buying your house and didn’t purchase it at the top of the market, then you should have immediate equity even if the market hasn’t moved. This option gives you an opportunity to cash out that equity and roll it into another deal.

The key word there is DEAL. It must be a bonafide, legitimate deal (that is- under current market value).

For the purposes of building wealth, you absolutely MUST roll that equity into another house. Don’t just spend it on a vacation for your family to Dubai.

Look for another great deal that will give you instant equity again. Every time you do this, you’re building up your net worth without paying taxes on it.

This doesn’t fall completely under the umbrella of passive income, but as I mentioned, it is a strategy for moving the needle of wealth in your life. The reality is that you’re just living in the house day to day, so you aren’t really doing anything different. In that sense, it qualifies as passive.

If you wanted to, you could also use that tax free money as seed money for a business venture. As long as it goes back into your long term strategy for wealth creation then you should go for it.

7) Give “House Hacking” a Try

home example for house hacking

This term I think may have been coined by Brandon Turner of Bigger Pockets. Regardless of where it came from, it’s a great strategy and a simple one. The idea is that when you buy a house, you opt for a duplex, triplex, or commercial property with residence, or something else that can be rented out.

By doing this, you can bring down your cost of living because others are helping pay the mortgage on the property. For example, let’s say you buy a duplex. Then you rent out one side and live in the other.

If the duplex payment is $1,100 and you’re renting one side for $850, you’re only actually paying $250 for your residence. If you’re single, you can take this a step further. Let’s use the same example but assume each duplex unit is a 3 bedroom.

You live in one bedroom (say the smallest) and rent out the other two rooms for $250 per room (a great rate). Now you’ve got positive cash flow going. Your mortgage is $1,000. You’re taking in $1,350 ($850 + $250 + $250). So you actually have a positive cash flow of $250 (excluding expenses).

If you’re in a position to try this, I highly recommend it as a wealth creation strategy to add to your arsenal. While in college I rented a 3 bedroom home and never once thought about subleasing the other two rooms though my landlord was a friend of mine and would have allowed it.

8) Take a Serious Look at Building a Network Marketing Organization

Yes, I went there. If you haven’t figured it out from this site or if this is the first time you’ve been to my site, I am a big believer in network marketing as a legitimate wealth building tool.

Now you may be thinking, “Oh, I don’t want to do that”.

Some good advice here is something I used to tell my high school students when they sat in my office and told me they didn’t feel like doing anything. I’d say, “Do you know how many things I do every day that I don’t want to do? It starts when my alarm goes off and my feet hit the floor”.

Jim Rohn says it best, “Successful people do what unsuccessful people are unwilling to do”.

network of blue lightsLet’s get back to the topic of this section. Network marketing and direct sales as an industry has come a long way since it was first introduced. The world has changed, and with that change has come tremendous opportunity for somebody who isn’t afraid to get out of their comfort zone and try something new.

Unfortunately, it’s gotten a bad reputation but if you stop and think about the reasons for that reputation you quickly realize it’s mostly because people either didn’t succeed, got into it with the wrong expectations (it will be easy), or joined the wrong person (their broke buddy said “we’re gonna be rich!”)

The world has changed, and with that change it’s become a lot more possible for an average person to create an above average income in this industry. 6 figure earners used to be the big dogs in this industry, now they’re a dime a dozen.

The big dawgs now now are the 7 figure earners, many of whom are knocking on the doors of 8 figures (and that’s just from commissions).

For a more in depth look at this particular strategy, check out my article about the Best Reasons to Re-Evaluate Network Marketing.

9) Build and Monetize a Website (specifically a blog or vlog)

Depending on your comfort with technology and writing, this can be a great option. Obviously I’m a believer in it because here you are on my blog.

I have no website building experience other than what I’ve taught myself. The great thing is, you can learn anything online with Google and Youtube (which is actually now owned by Google as well).

If you go the website route, I highly suggest a blog or vlog type website to make it easier to get picked up by search engines.

Just creating a pretty website won’t get any organic traffic and unless you’re a coder, you’re probably not going to create the next social media giant right out of the box.

This website is optimized for speed and SEO, not for prettiness. I’m focused on doing what works, not on just having a little hobby creating a pretty website.

Here’s a list of Pro’s and Con’s to think about if you’re thinking about building a website.

PROS:

  • Not expensive to set up or maintain
  • Can work on it around your schedule
  • You learn a new marketable skill set
  • You can positively impact people all over the world
  • It positions you as an expert in a niche
  • There are tons of ways to monetize (sell info products, coaching, speaking engagements, lead generation, etc.)
  • Once set up, your site can bring in leads and/or sales (i.e. profit) automatically 24 hours a day.
  • Your reach is virtually unlimited (the only limit is the number of people who speak your language and have internet access)

CONS:

  • Time (time to develop, time to learn, time to rank in search engines, time to create products)
  • Cost of Failure– though it’s not expensive money wise (unless you outsource everything), it is a great expense in terms of time, so if you choose this route and don’t have the patience or fortitude to see it through you may want to choose a different route.
  • Learning curve – If you’re starting with little knowledge, there is a big learning curve. But that goes for anything worth doing.
  • Some of your stuff (maybe all of it) will NEVER be read unless you also commit to continual education in the field of SEO (search engine optimization)
  • Spam- A relatively easy fix with the right plugins

The CONS section is a little light compared to the PROS section, but oh well. If I didn’t believe that the Pros outweigh the Cons I wouldn’t be typing right now. I’d be watching The Walking Dead or Breaking Bad (again).

I hope you found this article useful and can utilize the information, or even one idea, as the foundation to start you down the road of wealth creation. As always, I’d love to hear from you and I welcome you to share this content anywhere  it might add value to somebody else using the social media buttons on the page.

Center all your energy and time on building small income streams and it won’t be long before those streams are larger than the paycheck from your job. While you’re here, you may want also want to check out our Best Secrets to Building Wealth Fast.

If you found this article helpful, I would highly appreciate a social media share and/or comment.

If you’re looking for a solid, fun, and authentic team to work with, reach out to us.

Jason & Daniele

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