Some people think that having the right mindset is all you need to successfully build passive income. For some reason, there is a mythical belief that passive income is the fruit of inaction and wishful thinking. That is far from reality. Building a sustainable passive income stream requires hard work, dedication, and skill.
However, having the right mindset while creating passive income is part of what is required for long-term success. We won’t be talking about the Law of attraction, reprogramming your subconscious mind, or treating passive income like winning the lottery. This article covers actionable things you can implement to put yourself in the right mindset to build a sustainable passive income stream. Let’s dive in.
1. Don’t Build Passive Income to “Get Rich Quick”
Why do you want to build a passive income stream? If your singular motivation is money then you may be disappointed. Money is a by-product of created value. If your only goal is to generate value for yourself, what value are you creating for others?
Some think that “throwing money at the problem” is a way to generate passive income. They do this by increasing their debt to buy thousand-dollar courses from internet gurus. For some reason, they believe the ads promises of high returns for, in reality, information. This dangerous mindset most often only makes money for the course creators, leaving students thinking that their inaction will make them rich.
Choose a passive income idea that you are passionate about, find out what your personal goals and aspirations are beyond money, cater to a niche you are part of and care for, and provide many people as much value as possible. We are going to cover these points more in detail below.
2. Choose Something You Are Passionate About
A niche is a segment of a market, target market, or the people that you specifically want to address. Your chances of success could be higher if you are a part of that niche, know what their problems are and needs are, and have an adapted solution to those issues. You could also choose a niche you genuinely want to learn about and help.
However, choosing a niche based solely on revenue potential can be more detrimental to ongoing motivation and overall business quality.
Caring for the people in the niche not only important, it is also key to care for the product or the service that you’re offering them. A low-quality product or service often results in unsatisfied customers and therefore less income. Your customers are not just a paycheck and should be treated with respect. Let’s discuss this point further below.
3. Always Treat Your Customers Like People
Low customer satisfaction can stem from a number of things, from low product quality, high shipping times, low-quality customer service, or lack thereof. Many of those building passive income to “get rich quick” overlook post-sale customer service because it can be very demanding. Sometimes they don’t even provide customer service at all.
For example, some dropshippers are in it only for the money and sell low-quality products, make it difficult to obtain refunds, and do not listen to customer feedback or improve their service because they only want to make a quick buck. This negative mindset is detrimental not only to the customers but also to such dropshippers chances of ongoing success.
Never forget that without your customers you would have no business, and so no passive income. This is true no matter what product or service you are offering. Provide excellent ongoing customer service, listen to their feedback, and implement changes to improve your product-market fit.
4. Cater to Many Rather Than One-on-One
Passive income is somewhat a way of being paid proportionally to the value you provide others. However, instead of working one-on-one with someone for an hourly rate, or a per-project income, you can make more money by catering to a wider audience. Some brick and mortar passive income ideas provide a more local service, whereas YouTubers, podcasters, influencers, and gamers on Twitch have a wider audience than someone working one-on-one with a direct client or with a small local group of people.
In order to successfully cater to a wider audience of people, it is important to provide as much value as possible. This is especially made possible thanks to online passive income ideas. Be a trustworthy authoritative expert in your domain. Make your unique value proposition as clear as possible. Anyone who interacts with you or your brand should quickly and easily know exactly who your target market is and what you have to offer them.
Create valuable content around your product or service. Explain exactly who it is for, and what the benefits are for them. You can create videos, articles, infographics, podcasts, music and more. Share your content with the right people on social media, video streaming services, and other pertinent places online. All in all, provide as much value as possible to your target market and cater to many.
5. Put in The Time Required to Build Your Skills
Building a successful passive income stream takes time and effort. You may already have the knowledge and skills required to build that passive income stream. But most beginners start out with a passive income idea that they have never tried before and would like to explore.
For example, creating a YouTube channel is a popular passive income idea, but you may feel intimidated if you never made any videos before. Being successful on YouTube requires a number of skills including marketing, graphic design, video montage, presentation, business management, and more. It will therefore take time to build up your skills and learn how to create successful YouTube videos if this is a completely new space.
According to a popular theory launched by Malcolm Gladwell, it takes roughly 10,000 hours of practice to become an expert at a skill. Other studies have rendered that theory less important (source). But it is hard to deny that practice makes perfect. Skills involved in creating a successful passive income stream include motivation, effort, specialized knowledge, business management, marketing, and sales skills as well as consistency and execution among other things. Take the time you need to build your skills and view your perceived failures as opportunities to learn and improve.
6. Check Your “Money Mindset”
“Money doesn’t grow on trees,” “You weren’t born with a silver spoon in your mouth,” “Rich people were lucky,” “They probably inherited their wealth,” “The rich get richer, the poor get poorer,” etc. You probably have heard one of these money sayings at least once in your life. It does not matter if they were true or not. What matters is if these past beliefs are holding you back from more.
The first step in opening up your mindset is accepting that some of these common, negative money sayings may not be serving you. Notice when you notice that you had one of these thoughts, try to replace it with a more positive outlook. For example, if you see a rich person drive by in a nice car and feel envy, instead of thinking “they probably inherited their wealth” accept your current feeling and try to replace your negative reaction with a more positive outcome: “I feel envious right now, but I look forward to driving a car like that someday.”
We have an article with over 120 inspiring passive income affirmations, motivational quotes and mantras! Also the book Secrets of the Millionaire Mind can be a great place to get information on ways to spot and replace these kinds of thoughts. Harv Eker explains how our thoughts on money were created through verbal programming, modeling, and specific incidents that occurred in our lives. He provides examples and ways to replace hindering thoughts.
7. Set Attainable Goals
Like we said at the beginning of this article, passive income doesn’t fall from the sky. Hard work is required to build a successful and sustainable passive income stream. A very helpful way to stay motivated and consistently on track Is by setting attainable goals. You could choose to set SMART goals, which is a popular method to ensure goals are: S – Specific, M – Measurable, A – Achievable, R – Realistic, T – Time-Bound.
You may also want to set your goals based on how much you need to be financially free. If you are unsure where to start, check out this article on our blog on the topic. Set time-bound goals that work around your schedule. If you are a student with loads of homework, a parent that has children to care for, or a professional with a demanding job, you may be required to work early or late hours in order to build your passive income stream. Set a schedule that works for you and can keep you motivated.
And be sure to measure your success. ROI or Return on Investment is a key metric in any business. You can calculate ROI by tracking all of your expenses and deducting them from your income. If that number is positive you made a profit. However, if that number is negative you have sustained losses.
Passive income is a steady stream of income that does not require active maintenance whereas active income requires physical presence and time in order to produce revenue. Although passive income can eventually require less work in the long run, it can still be a very demanding income source to set up initially.
Something that you can do to speed up the process is take (reasonably cost) courses that can save you time, consult qualified professionals in your jurisdiction, borrow and read pertinent books from the library, watch YouTube channels that you enjoy (like our channel) on the passive income stream you are building, listen to podcasts and keep learning.
Take action. Find a niche you’re passionate about, create a product or service that you are excited to share with the world, set attainable goals, and consistently work towards them. Let yourself explore, find out what you like. Consider your perceived failures as learning opportunities to improve. And keep in mind the cost of inaction.
What is Minority Mindset Passive Income?
Minority Mindset is a YouTube channel run by Jaspreet Singh in the financial space. The goal of the channel is to “revolutionize the way people think about money and to make financial education fun” and they often discuss passive income. Minority Mindset provides videos, articles, and resources on how to make, save and invest money.
What is a Good Passive Income Mindset?
As a general rule, a good passive income mindset includes building a stream of passive income for reasons other than just money, not doing it to “get rich quick,” having a good money mindset, setting attainable goals, choosing something you are passionate about, providing value and consistently learning.
What Are Passive Income Ideas For Creative Minds?
Creative people may enjoy the following passive income ideas:
- 3D Printing
- Graphic Design
- Selling Stock Photos
- Selling Printable Art
- Selling Handmade Items on Etsy