Some people believe 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 result of inaction and wishful thinking. This 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 to achieve long-term success. We’re not going to talk about the Law of Attraction, reprogramming your subconscious mind, or treating passive income like winning the lottery. This article discusses actionable things you can do to put yourself in the right mindset to build a sustainable passive income stream. Let’s dig deeper.
1. Don’t build passive income to “get rich quick”
Why do you want to build a passive income stream? If your only motivation is money, you may be disappointed. Money is a byproduct of value created. If your only goal is to generate value for yourself, what value are you creating for others?
Some believe that “throwing money at the problem” is a way to generate passive income. They do this by increasing their debt to purchase thousand-dollar courses from online teachers. For some reason, they believe that ads promise high returns on information in reality. This dangerous mindset often only makes money for the course creators, making students believe that their inaction will make them rich.
Choose a passive income idea that you’re passionate about, figure out what your personal goals and aspirations are beyond money, cater to the industry you’re a part of and care about, and provide as many people with as much value as possible. We will cover these points in more detail below.
2. Choose something you are passionate about
A niche is the part of your market, target market, or people you want to specifically address. Your chances of success may be higher if you are part of that field, know what their problems and needs are, and have an appropriate solution to those problems. You can also choose an area that you really want to learn about and help with.
However, choosing a niche based solely on revenue potential can be more detrimental to ongoing motivation and overall business quality.
Caring about the people in this field is not only important, it is also key to caring about the product or service you provide to them. A low-quality product or service often results in customer dissatisfaction and thus lower income. Your clients are not just a paycheck and should be treated with respect. Let us discuss this point below.
3. Always treat your customers like people
Low customer satisfaction can stem from a number of things, from low product quality, long shipping times, or low-quality, or no, customer service. Many of those who build passive income to “get rich quick” ignore after-sales customer service because it can be too demanding. Sometimes they don’t even provide customer service at all.
For example, some dropshippers are just in it for the money and sell low-quality products, making it difficult to get refunds, and don’t listen to customer feedback or improve their services because they just want to make a quick profit. This negative mindset not only harms customers, but also harms the chances of continued success of these distributors.
Never forget that without your clients you would not have a business and therefore no passive income. This is true no matter what product or service you offer. Provide ongoing excellent customer service, listen to customer feedback, and implement changes to improve your product-market fit.
4. Meeting the needs of many rather than meeting the needs of individuals
Passive income is more or less a way to get money in proportion to the value you provide to others. However, instead of working one-on-one with someone for an hourly rate, or income per project, you can make more money by catering to a broader audience. Some traditional passive income ideas provide a more local service, while YouTubers, podcasters, influencers, and Twitch gamers have a broader audience than someone working one-on-one with a live client or with a small, local group of people.
“Provide as much value as possible”
In order to successfully meet the needs of 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. Become a trusted and trustworthy expert in your field. 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 about your product or service. Explain exactly who they are for and what the benefits are. You can create videos, articles, infographics, podcasts, music, and much more. Share your content with the right people on social media, video streaming services, and other relevant places online. Overall, provide as much value as possible to your target market and meet the needs of many.
5. Make time to build your skills
Building a successful passive income stream takes time and effort. You may already have the knowledge and skills to build this passive income source. But most beginners start with a passive income idea that they have never tried before and want to explore.
For example, starting a YouTube channel is a popular passive income idea, but it may feel intimidating if you’ve never created any videos before. Success on YouTube requires a number of skills including marketing, graphic design, video editing, presentation, business management, and more. So it will take some time to build your skills and learn how to make successful YouTube videos if this is a completely new space.
According to the popular theory pioneered by Malcolm Gladwell, it takes approximately 10,000 hours of practice to become an expert in a skill. Other studies have made this theory less important (source). But it’s hard to deny that practice makes perfect. The 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 others. Take the time you need to build your skills and view your perceived failures as opportunities to learn and improve.
6. Check your “financial mindset”
“Money doesn’t grow on trees”, “You weren’t born with a silver spoon in your mouth”, “The rich were lucky”, “Maybe they inherited their wealth”, “The rich get richer and the poor get poorer”. “, etc. You have probably heard one of these sayings related to money at least once in your life. It does not matter if they are true or not. What matters is whether these previous beliefs are holding you back from further.
The first step in opening your mindset is to accept that some of these common negative money sayings may not serve you. When you notice yourself having one of these thoughts, try replacing it with a more positive outlook. For example, if you see a rich person driving a nice car and feel envious, instead of thinking “Maybe he inherited his wealth,” accept your current feelings and try to replace your negative reaction with a more positive outcome: “I feel envious.” Now, but I look forward to driving a car like this one day.
We have an article with 120+ inspiring passive income affirmations, motivational quotes and mantras! Secrets of the Millionaire Mind can also be a great place to get information about ways to spot and replace these types of thoughts. Harv Eker explains how our ideas about money are created through verbal programming, modeling, and specific incidents that have occurred in our lives. It provides examples and ways to replace obstructive thoughts.
7. Set achievable goals
As we said at the beginning of this article, passive income does not fall from the sky. Hard work is required to build a successful and sustainable passive income stream. One very helpful way to stay motivated and on track is to set attainable goals. You may choose to set SMART goals, which is a common way to ensure that 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’re not sure where to start, check out this article on our blog on the topic. Set time-bound goals that fit your schedule. If you are a student with a lot of homework, a parent with children to care for, or a professional with a demanding job, you may be asked to work early or late hours in order to build a passive income stream. Set a schedule that works for you and motivates you.
And be sure to measure your success. ROI or return on investment is a key metric in any business. You can calculate your ROI by tracking all your expenses and deducting them from your income. If this number is positive you have made a profit. However, if this number is negative, you have incurred losses.
Final tips
Passive income is a continuous stream of income that does not require active maintenance while active income requires physical presence and time in order to produce revenue. Although passive income may ultimately require less work in the long run, it is still a very difficult income source to set up initially.
Something you can do to speed up the process is to attend courses (at a reasonable cost) that can save you time, consult qualified professionals in your jurisdiction, borrow and read relevant books from the library, and watch YouTube channels that you enjoy (Like our channel) on the passive income stream you’re building, listen to podcasts and keep learning.
Take necessary action. Find an industry you’re passionate about, create a product or service you’re excited to share with the world, set achievable goals, and continually work toward them. Allow yourself to explore, and discover what you like. View your perceived failures as learning opportunities to improve. And remember the cost of inaction.
Related questions
What is Passive Income for Minority Mindset?
Minority Mindset is a YouTube channel run by Jaspreet Singh on the finance industry. The channel’s goal is to “revolutionize the way people think about money and 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 involves building a stream of passive income for reasons other than just money, not doing it to “get rich quick,” having a good financial mindset, setting achievable goals, or choosing something you love. Providing value and continuous learning.
What are passive income ideas for creative minds?
Creative people may enjoy the following passive income ideas:
- Print on demand
- YouTube
- Blogging
- Broadcast
- 3D printing
- Graphic design
- E-commerce
- Sell stock photos
- Sell printable art
- Sell crafts on Etsy
Check out our passive income ideas for artists and designers plus 50+ passive income ideas here.