Hi everybody!
In the previous section, I shared about the most important foundational factors to start achieving financial freedom. And the next factor is also very important in this journey. That is creating a passive income source.
To start, I would like to share a story that many of you have probably heard, but I think it couldn't be more appropriate when thinking about passive income.
The story begins with the dream of two friends to have a better life for themselves. They are not afraid of difficulties and always look for opportunities to realize their dreams.
And finally the opportunity has come. The village leader decided to hire two people to carry water from the stream on top of a high mountain to supply to the village. Pablo & Bruno excitedly started their daily work from morning to night, together they carried water from the stream to the village. They work hard every day, and at night they return home with that day's wages.
Bruno is very satisfied with his job and the money he earns. He firmly believes that with this job he can achieve what he wants. To increase his income, he will use larger buckets of water for each trip. Then with a larger income he can buy a cow and the house he dreams of.
Pablo is not satisfied with his job. After a day of work, he felt very tired, his hands hurt, and he was exhausted. Gradually, your health will no longer be enough to do so forever. And so he started thinking of other ways to make more money, with less effort. And an idea flashed in Pablo's head.
He will build a water pipeline system from the stream on the top of the high mountain to the village. With this system, he can bring more water to the village without having to carry water every day. Full of excitement with his initiative and immediately started work.
Pablo shared this initiative with Bruno and invited Bruno to join forces to build a system. Bruno thought this idea was crazy. All Bruno can think about is how to make more money and buy more things. Bruno thinks that building a system will affect his work and will slow him down toward his goal.
In contrast, Bruno still uses larger buckets and walks more often to carry water.
Pablo had to carry out the plan alone. Every day he still carries a moderate amount of water to maintain his strength. He spent his remaining energy on Saturdays and Sundays building the pipeline. The people in the village thought Pablo was doing a "crazy" job and laughed at him. But Pablo ignored those taunts and stuck to his plan.
Bruno, with his superior health, carried larger buckets of water and earned more money. He had money to buy a house and a cow. After work, he often goes to bars to drink beer and relax.
But as time passed, Bruno felt weaker and more tired. He was forced to carry smaller water containers than before, so his income gradually decreased over time. Bruno's body is visibly aging because he has to work more hours and increase his workload.
As for Pablo, after 2 years of persevering with his plan, he finished building a water pipeline from the mountain to the village. When the pipeline was completed, Pablo no longer had to carry water but sat at home collecting water bills from the whole village. Money flows into your pocket even when you're sleeping or going out.
Through this story, what do people think about it? As for me, I have a few thoughts that I want to share with everyone.
Our time and health are limited
No matter how strong your body is or how long your lifespan is, each person's time and health are finite. Each person who comes to this life is like a tank, depending on how each person uses it, that tank will dry up quickly or slowly.
As in business, when Bruno reaches a certain point in his health, his abilities will gradually decrease and he will no longer be able to make money like when he was healthy.
If we keep working using labor and time to exchange for money, at some point we will no longer have labor to exchange.
Here I am not talking about which way is right and which way is wrong, because that is each person's life choice. But I just want to mention the fact that this will happen in the future. Because many of you, brothers and sisters who are still in the prime of their working lives, may forget this.
Opportunities come, but each person's way of seizing them is different
In life, there will always be people who complain that opportunities do not come to them, that this or that person is rich because of luck, because of opportunities.
This is absolutely right! Success will require elements of luck and opportunity. But when the opportunity comes, not everyone can grasp it. Just like how Pablo and Bruno both had the opportunity to come into contact with the opportunity but the way they grasped it was different.
I met many acquaintances who told me things like: knowing Bitcoin since Bitcoin had 1k or knowing Forex since college. My friend invited me to join Bitcoin at that time, if only I were rich now, if only... many more if only things. And now, after the market has gone through several cycles, they still sit there and say the same things. Surely everyone will have acquaintances like that.
Like Bruno, most people think about how to have enough money to live through the day, this week or this month. If they have a good source of income, they will spend it all, even spend it first instead of investing. invest for the future.
A few will think longer term like Pablo who feels dissatisfied with his current job. Pablo's goal is to lead a better, freer, more comfortable life.
Pablo is willing to work harder, because he knows that if he wants something he has never had, he must be willing to do things he has never done.
Pablo decided on the plan to build the pipeline…alone. He understands that it is not an easy thing and may take a lot of time to complete.
But he still believes in his plan. Every day, he still carries water as before, but on weekends and in his free time he works hard to build his system. To the laughter of the villagers.
Some people would call this a trade-off, this has a somewhat negative color, for me it is simply my choice, and I enjoy that journey.
Active income sources are limited
Active income means you have to trade time & labor to get paid. If you don't put in time & labor, you don't get paid.
It could be income from your boss, or from self-employed jobs. Active income is often limited because it depends on two factors: time & labor, both of which are limited.
Each person only has 24 hours a day, you cannot work 24 more hours a day and your health does not allow you to do it continuously. As you get older and your health weakens, your income source will also decrease.
That is Bruno's source of income
Pablo's income source is passive and unlimited
Passive income is a source of income that after you build a complete working system, it will automatically operate without requiring you to spend much time and effort, but your income will still come naturally. continuous.
If your system expands and develops, your income source will increase and be completely unlimited.
Passive income will help you realize your dreams, be free to do what you want, travel, spend time with family, help others...
Passive income takes a lot of time and effort
Billionaire Ly Gia Thanh, one of the richest people in Asia, had a poor childhood and had to work in many jobs to make a living. He gave advice: "A job from 7 am to 5 pm is work." The job is only enough to feed you, the job from 7:00 p.m. to 10:00 p.m. is the job that will help you get rich."
You need a job to make a living, you still have to work for someone to have money to spend on living expenses, rent, electricity, credit cards, etc. However, after work instead of drinking or If you spend time at a restaurant, you spend that time building a passive income source for yourself.
Gradually, when your passive income source is formed and completed, you will begin to have a second source of income. When the income source is large enough, enough to cover basic expenses, then It's up to you to quit your corporate job and spend all your time on yourself. Or continue doing what you're doing but with a completely different mindset.
If you just look at all of the above, everyone certainly wants to have a passive income source. However, the reason why not everyone achieves this is because achieving it is not simple.
Most forms of passive income in the beginning take a lot of effort, time and perseverance to obtain. So not everyone can make it to the end of the journey.
It's similar to Pablo when he first started, having to try every day without seeing clear results right away while watching his friends increase their income, spend, go out, and travel. It might make anyone give up halfway.
Some experiences to keep you confident on your journey
Determine your psychology first
When starting to look for a source of passive income, make sure you clearly understand that this is a long-term goal that cannot be achieved overnight.
The hardest part of creating passive income is patience and a long-term vision. Although there are a lot of documents and instructions for making passive money, everyone knows what to do. But most people give up midway before they are "ripe" enough to bring high efficiency, what compound interest brings.
Determining that you will try your best in the next few years for a better long-term future will help you stay motivated and avoid being more impatient. A few years sounds like a long time but it passes very quickly, but if you don't do anything, in the next few years everything will still be the same, the same cycle of life as before.
Enjoy the journey
There is a saying that I really like and always repeat to myself
Success is a journey, not a destination!
When climbing or conquering a mountain or pass. If we only focus entirely on reaching the top, we will always feel tired and discouraged on the way up. Instead of this, we can relax our minds, enjoy the surrounding scenery and the fresh air of the forest. Thus, the road to the top feels faster, and we can enjoy more things. It's all just your own psychology.
Diversify active and passive income sources
Although passive income has many benefits, it doesn't mean we should focus all on passive income and forget active income. Active income sources are also essential for us to be able to sustain ourselves and create passive income sources.
So if you ask yourself, should I quit my job to focus solely on investing? Should I trade or should I invest?... My answer is always to combine because each source of income has its advantages and complements each other.
Even active income or passive income is divided into different income sources, profits, and risks. We can also break it down further.
This will prevent you from being completely dependent on any source of income or market. However, before there is diversity, we also need to focus on 1 or 2 income sources to specialize first to avoid riding on horses to see flowers.
Build a good environment for yourself
To make it easier to build a source of passive income and financial freedom, people need to create a good supportive environment for themselves. It's very difficult not to give up if you're surrounded by friends who always invite you to drink, eat, laugh at your dreams... I mean, it's not like we don't hang out with friends like that at all. Contact should be limited to avoid infection.
In addition, creating an environment can be reading books, following YouTube channels or spreading positive, motivational messages, etc.
When you create such an environment for yourself, you will gradually find that saving and building a passive income source is very comfortable and relaxing.
summary
There are many ways to create a source of passive income. Depending on each person's ability, people can choose to create a source of passive income in their current job to take advantage of their knowledge and experience. close.
I think in every industry there will be a way to create a passive income source. That's the theory, from the next article I will go into practice and share ways to create passive income in investing, and especially in the Crypto market in a safe way that anyone can do.
Continue reading Part 3: Cash Flow While Sleeping 3 – Automatic Investment and Profit Optimization in Crypto
