What You Need To Know About Income Streams
There are so many buzzwords that fly around, right? Passive income. Active income. Recurring income. Not to mention the differentiation between these subcategories. I mean, if you still have to market your passive income, is it genuinely passive?
This question along with the pros and cons of the different income types is what we are going to talking about in this blog post. As well as how to streamline your processes so you can do less of the things you do not enjoy and more of the things you do.
How can you streamline the process of creating and maintaining income? In a day and age where everything is so accessible, is this a good thing or a bad thing? And how do you take an idea to the next steps? We are going to be covering all of this and more. If you are ready to streamline and grow your knowledge on all things income, you have come to the right place.
So, let’s start with the types of income. Technically there are three types.
But we also like to think of recurring as a bonus option. Not because it is a specific category as it could fall under any of the above but it’s something to think about equally. So what are they exactly?
Active income is any income that is coming into you due to active working. Whether you have your own business or not, if you are doing something that generates revenue it is active.
Passive income is where you are paid for assets you already have. It is a tricky one to explain as there is kind of a subcategory when it comes to passive income. This is because passive, is where you are not actively working, however with some passive income, such as intellectual property, it does require to be marketed, and then you are doing something actively.
So there is 100% passive income, something like a house where the agency fees and mortgage is less than the money from the rental and then you are getting income without actively doing anything. There is then partly passive income (a term coined by us, it’s not official). Where the work is done, or the goods are there, but you still spend time promoting it. This can be avoided if you outsource or automate this step!
Portfolio income is where you generate revenue by selling something for higher than you paid for it originally. Although this does include the ‘big stuff’ like property and stocks (the most common examples to use), it can also apply to things like, collectables, cars, or antiques. You typically will need an ‘eye’ for this kind of thing if you want to do it regularly.
And then the fourth bonus (and unofficial one) is recurring income. Realistically, this can fall under any of the above income types. But the reason we are putting it as a fourth income stream is that it is something to think about and approach differently. When you are setting up a monthly income stream, there are certain things to think about.
Pros and Cons
There are pros and cons to anything in business. But the main thing you need to look at is your purpose, and how you can serve those via the different types of income. It also depends a lot on where you are and where you want to go. Take a look at the kinds of income streams and how they could be implemented into your lifestyle.
Pro: You have more control. It tends to be something you can build quicker.
Con: It does require you to be very present if you do not do the job or ship the product you will not get paid.
Pro: You can literally make money while you sleep. You know all those con adverts that claim you can make money while you sleep? Well, if you do passive income correctly, that can actually happen.
Con: Hard to build. A loyal, engaged audience is key. You need to ensure that you are so aligned and in tune with your audience that you know what they want.
Pro: They can be very lucrative.
Con: You tend to require money to invest to get an in.
Pro: Regular income makes cash flow much better.
Con: It is imperative to ensure the customer needs the thing that they are paying for on a consistent basis.
So let’s look at the types of income that come under these categories:
Interest. There are some sites online where you can become a ‘peer lender' where you lend to people who cannot get loans.
Physical subscription products
Yearly fees broken down into monthly instalments
Product- informational hybrid
The income stream you choose to implement next really depends on where you are in your life and what resources you have to hand. For some, time may be an issue, so investing money in investments may be the way to go. For others, time may be the resource they want to invest. When it comes to taking those next steps, think about your purpose, how you can best serve it and what feels natural to you.
Putting A Plan Into Action
The right idea.
The idea is crucial here. Online businesses are not a new thing.
Schemes such as drop shipping is no longer a new phenomenon, so you need to be creative and purposeful with your idea. It needs longevity. It needs to add real value to someone.
Keep it simple.
Although you want the idea to be great, great does not mean complex. You want it to be as simple and as well thought out as possible. You want to make the user experience, precisely that, an experience!
Time for money is an excellent way to lose.
Whatever income stream you are planning, you do not want to be exchanging time for money. Why? Because it limits growth. There are only so many hours in the day and being efficient a will all be pointless if you are trading time for money. There is no room for growth.
Invest time and money in processes.
Streamlining processes is something we talk about a lot at Cone, both within the company and with our clients. Processes are what helps you scale and grow your business. No matter what it is that you do.
Draw up a plan.
Draw up a plan regardless as to whether you do this alone, with your accountant, or a coach, drawing up a project is so important. Not only from a logical point of view but also from a mindset point of view. Being crystal clear on what you want, where you want to go and what you need to get there will increase the likelihood of achieving that goal. Use your existing transferrable knowledge, target the audience you have already, talk to the contacts you have. Once you have got started, creating a plan will flow. It’s the getting started that is the hardest!
If you want to create a new income stream, looking at automation and outsourcing is an excellent place to start. Write down all of the tasks that you need to do in one column. On the next column write if you can automate or outsource the task and a rough estimate of the cost to do so. You need to look at this in two ways: a mindset shift. You can spend your time doing something else, whether that is growing the business or working on something else.
So this brings us to mindset around income. Implementing and working and analysing all the about information is useless if you are in a negative mentality towards income. So let’s get clear on a few things:
* Your income can grow as much or as little as you want it to. It begins with the mindset and the cap you put on your own potential.
* Money is energy, so a simple way of seeing this is that if you want to raise your income you have to raise your frequency. This means, get inspired, listen to podcasts that will inspire you to keep going.
* On the same manifestation and mindset theme, to see physical results you must take inspired physical action.
* Automation and outsourcing can save you time. It is not selfish or up yourself to be efficient.
Streamlining your processes is important when you come to add another income stream to your bow. You will know if you have read any of our money mindset series such as 'Money Management Tips To Attract Money', '3 Things You Need To Know About Money (Mindset)' or 'Choosing The Right Accountant Will Help Your Money Mindset' that opening income streams are important if you want more money to flow to you, the resources need to be available. It is the little things like utilising applications such as Xero and Receipt Bank instead of spreadsheets. Increase that efficiency without guilt that you should be doing it all. Check out toolkit here.
So where now?
One of the things that we hope you realised is that you can increase your income at any time you choose. The hardest part is getting out of your own way and creating something that has true purpose and passion.
Put a plan in place.
Write it down, writing on paper is an excellent way to get everything out and then you can make the plan more refined when it comes to writing it up digitally.
There will be a free resource to go with this, and it will be available soon in The Cone Collective Facebook group, which you can join for free here.
And lastly, know that the only limit, when it comes to creating income resources is your own beliefs. Have faith, take action and do everything with a purpose.
If you are wanting to know more about creating income streams with purpose, secure your place at our event.
About the author
Chloe Slade is the Marketing Manager here at Cone and focuses on creating content that brings business and lifestyle together. Chloe is a keen makeup lover, foodie and loves to work from luxurious destinations.