How to Make Money and Get Rich with Passive Income

To create wealth, you must increase your streams of income.

According to The Huffington Post, there were roughly 7.8 million millionaires in 2009. That's about 2.5 millionaires for every 100 people you see. The people who make money and get rich are not lucky and the majority don't inherit their wealth. In fact, only about 6 percent of millionaires inherited their wealth, says the website Consumerism Commentary. The rest make money and get rich using a time tested formula; they buy assets that earn passive income. Albert Einstein once said that compound interest is the most powerful force in the world. Passive income is exactly that. It's a form of compound interest that will make you rich.

Instructions

1. Invest in stocks. Stocks appreciate in value, pay dividends and are a great source of passive income. Stocks make money in such large quantities that, overtime, they could eventually replace your income.

2. Buy Bonds. Bonds provide passive income in the form of interest payments. Essentially, buying bonds is lending money to a business. In return, you make money by collecting interest every year. At the end of the loan, you receive the original amount you lent out.

3. Collect royalties. Royalties are stems of passive income paid to people for the usage of a certain asset. Often times, royalties are collected by writers, actors, inventors, and owners of land and patents. For example, imagine you own a piece of land that has large quantities of marble stone. If you rent the land to a marble factory that mines and sells the stone, you could collect royalties from all the marble it sells.

4. Buy real estate. Real estate is a great way to make money and earn passive income. Real estate provides money in the form of rent and also appreciates in value over time.

5. Open a business. Building a business is a great way to earn passive income and get rich. However, it is a bit more difficult and involves a lot of upfront work.

References

• U.S News & World Report: U.S Population, 2009: 305 Million and Counting
• The Huffinton Post: Number Of U.S. Millionaires Soared in 2009: Spectrum Group
• CONSUMERISM COMMENTARY: Most Wealthy Individuals Earned, Not Inherited, Their Wealth
• Millionaire Money Habits: The Power of Compound Interest
• Dictionary.com: royalty