Wealthy people understand how creating passive income streams is the secret to getting rich. By spending some time and effort up front on creating a system that automatically generates income, they can go ahead and duplicate the process to create multiple streams of income. When you learn how to produce passive income streams, you practically have the power to print your own money.

What is passive income? It is the income that is generated with minimal or no work. It usually requires a capital investment or doing the job just once to continue making a profit. The best example of passive income is writing a best-selling book. The author only has to write the book once, and as he continues to sell copies, the paychecks keep coming. Another popular example is owning rental properties. Real estate investors do a little research and buy a property that they can rent out for a profit, and month after month the checks keep coming.

When you can successfully do this once, there’s no reason you can’t replicate the process over and over again to generate a massive amount of passive income. Keep in mind, however, that even though most of the work is done once, that doesn’t mean that no work is ever required again. The author may need to do some book signings to help drive sales and the investor may need to add a management company or do some minor maintenance.

Passive income can also come from interest or dividends on paper assets, such as stocks and mutual funds. For example, assuming the stock market returns an average of 10% per year, you can expect a $100,000 investment to generate $10,000 per year in passive income.

When you take your profits and reinvest them in more stocks, more rental properties, or hire a ghostwriter to produce your next bestseller, you increase your profits and greatly increase your ability to get rich. As a result of taking advantage of compound interest by reinvesting your earnings, you can quickly double your money and continue to double it over and over again.

Why Producing Passive Income Streams Is The Secret To Getting Rich

1. You have the ability to earn more by doing less.
2. You have the freedom to work when you want and where you want.
3. Income is generated 24 hours a day, whether you work or not.
4. By replicating the process, you write your own paycheck.
5. Your income is only limited to the number of passive income streams you want to produce.
6. By taking advantage of compound interest, you can become incredibly rich.

These are just a few of the reasons why producing passive income streams allows people to become incredibly wealthy. It doesn’t mean you don’t have to work or put in significant initial effort to produce a cash-yielding system, but it does allow you the freedom to build one system and move on to building the next.