Passive Income 101

Do you want to make money while you sleep? Do you want to be able to quit your day job and focus on your own projects? If so, then you need to start generating passive income. Passive income is income that you earn without having to work for it. It is the holy grail of income generation, and it is achievable if you know what you’re doing. Here we will discuss what passive income is, how to create it, and some of the best ways to earn it!

Passive Income 101 - counting cash image
Photo by Tima Miroshnichenko from Pexels

What Is Passive Income?

Passive income is defined as income that you earn without having to work for it. This means that you can generate money even while you’re sleeping! The key to creating passive income is finding a way to make money without putting in an active effort. In addition, passive income should be something that you can do once and continue to receive payments for it over time. There are a few different ways to do this, but the most common is to create a product or service that can be sold on autopilot.

How To Create Passive Income?

There are a few different ways that you can create passive income. This means that you create the product or service once and then continue to receive payments for it over time. Another way to do this is to invest in real estate or stocks and receive dividends.

Real Estate:

One way to create passive income is through real estate investing. This can be done by purchasing a property and then renting it out to tenants. When purchasing a property, ensure that you consult a mortgage adviser to ensure that the property is a good investment. 


Another way to create passive income is through stocks. When you invest in stocks, you buy a piece of a company. If the company does well, then the stock will go up in value. This increase in value can be sold for a profit.

Membership Site:

Another way to create passive income is through a membership site. This is a website where people can sign up and pay a monthly fee to access exclusive content. This content can be anything from videos and e-books to courses and software.

Product Sales:

Another way to create passive income is through product sales. This can be done by creating a physical product or a digital product. If you create a physical product, you can sell it on sites like Amazon or eBay. If you create a digital product, you can sell it as an eBook on Amazon or as a course on Udemy.

Blog Advertising:

Another way to create passive income is through blog advertising. This is where you allow companies to place ads on your blog in exchange for a fee.

Affiliate Marketing:

Another way to create passive income is through affiliate marketing. This is where you promote other people’s products or services and receive a commission for every sale you make.

The key to creating passive income is finding a way to make money without putting in an active effort.

Final Thoughts

Passive income is a great way to make money without working for it. There are a few different ways to create passive income, but the most common is to create a product or service that can be sold on autopilot. If you’re looking for a way to make money, then passive income is the way to go!

How to Manage Your Finances Better in 2022

Making financial decisions is never easy, but it’s especially tough in today’s economy. If you’re not sure how to manage your finances better in 2022, don’t worry – you’re not alone. This blog post will discuss some critical financial decisions that you need to make this year. We’ll also provide tips on how to make the most of your money and stay out of debt. So whether you’re planning to move, invest or simply save for a rainy day, read on for advice that will help you reach your financial goals!

How to Manage Your Finances Better in 2022 - checking your savings image
Photo by Karolina Grabowska from Pexels

#1. Decide what’s important to you

Before you can start making financial decisions, you need to figure out what your priorities are. What do you want to achieve in the next year? Do you want to save up for a down payment on a house? Or are you looking to invest in your future by starting a business? Once you know what’s important to you, it will be easier to make financial decisions that align with your goals.

#2. Make a budget

If you want to be successful in managing your finances, you need to create a budget. Sit down and figure out how much money you need to live each month comfortably. Then, track your expenses and make sure you’re not spending more than you can afford. It may take some time to get used to living on a budget, but it’s worth it if it means reaching your financial goals.

There are a few different ways to approach making a budget. You can use the 50/30/20 rule, which allocates 50% of your income towards essentials like rent and groceries, 30% towards non-essentials like entertainment and travel, and 20% towards savings or debt repayment. Or, you can use the envelope method, which involves dividing your cash into different “envelopes” for different expenses. Whichever approach you choose, the most important thing is to stick to your budget.

If you’re not sure where to start, there are plenty of budgeting apps and websites that can help you get started. Mint is a popular option that enables you to track your spending and create a budget based on your income and goals. 

#3. Invest in yourself

One of the best ways to manage your finances is to invest in yourself. Whether you’re looking to improve your career prospects or simply want to learn new skills, investing in yourself is a smart way to use your money. Consider taking a class, attending a conference or even starting your own business. Not only will you benefit from the knowledge and experience you gain, but you may also be able to make some money back through increased earnings potential.

Investing in yourself doesn’t have to be expensive. There are plenty of free or low-cost resources available online and at your local library. So if you’re not sure where to start, do some research and find an investment that fits both your budget and your goals.

#4. Move to another location

If you’re struggling to make ends meet, it may be time to consider moving to another location. This could mean downsizing your home, relocating to a more affordable city or even moving in with family or friends. While it’s not always possible to up and move, it’s worth considering if it would help you save money in the long run. Madison Fox provides luxury properties if you are interested in moving. 

Of course, there are some drawbacks to moving. You may have to give up your current job, leave behind your support network or deal with the hassle of packing and unpacking all of your belongings. But if you’re confident that the move would be beneficial for your finances, then it’s definitely worth considering.

Dealing with Debt

For many of us, some form of debt is a fact of life, but in my view it’s something we should use for our advantage rather than against us.

Carrying a lot of consumer debt such as credit cards and loans acts like an anchor dragging behind us or trying to drive with the handbrake on.

Not that I am demonising all kinds of debt, far from it. How difficult would buying a house be without a mortgage or many of the functions of modern life without some kind of credit option?

My purpose here is to encourage you to pause for a moment and think about how much debt you have and how quickly you can pay it off.

Photo by Anete Lusina from Pexels

How to Save Money on Credit Cards

If you have credit cards do you pay off the full balance very month? If so great, if not you are certainly not alone. The average credit card debt in the UK is almost £2000.

Do you remember opening a credit card account? Whether online or over the phone, you were most likely given the option to make you monthly payments by direct debit. Which is a good thing, so you don’t forget the payment and incur fees plus damage to your credit score.

But here’s the thing, the credit card companies usually give you the option to pay the full balance or a minimum percentage such as 2 or 3%. This is a sneaky trick which costs you more in interest and takes years to pay off the debt. Think about it for a moment, how do the credit card companies make money? Largely by charging you and I interest on our outstanding balances right. So, it’s in their interest (excuse the pun) to keep you paying the debt for as long as possible.

I made a video which explains saving money on credit cards in more detail:

As an example, if you had £2000 outstanding on your credit card at a 20% APR, a minimum 2% payment would be equivalent to £40 a month.

If your direct debit was set up for this £40 fixed payment it would take 7 years 11 months to clear the debt and a total interest cost of £1,818.

But if you just left it alone and paid the 2% as a direct debit it would take, wait for it, 42 years to clear the debt at a total cost of £5,588!

I don’t know about you but that makes me angry and is one of the reasons I am so passionate about financial education to stop people being ripped off like this.

Find a Lower APR

Once you have ensured you are paying a fixed amount, rather than a percentage the next step is looking at the cost of interest or APR and if you can switch to a cheaper provider.

In these days of low interest rates, there is no need to be paying 20 or 30% interest on your credit cards. Use a comparison site to see if you can switch outstanding balances to a lower rate card or take advantage of a zero percent offer.

Of the money you pay every month, the vast majority goes towards the interest and very little is taken of what is called the principal, or amount you owe. So basically, you are running to stand still.

With a zero rate card, the payments are all going towards paying off the principal, which is why the debt can be cleared faster.

What about debt consolidation loans? Good question. If you have several credit cards at say 20% interest and could clear them with a loan at for example 10% that would make sense, right? Well, maybe, it depends on how long you take the loan out for. Its tempting to go for a longer term perhaps 5 years or more and thereby reduce your monthly outgoings. But remember to look at the total cost of borrowing, which should be provided.

It’s nice to reduce the amount you are paying every month, particularly if money is a bit tight at the moment. But it can be a false economy if you end up paying more in interest in the long term.

Plus if you do go down this route, once you clear your credit cards don’t be tempted to start spending on them again. Hide them in a drawer for emergencies or close one or two if you have several. Keeping your credit utilisation rate low improves your credit score. So as tempting as it might be to ceremoniously cut them up, keeping a credit card with no or low balance can be a good thing.

Having a Plan

The third way I am going to suggest you deal with debt is by creating a plan for overpaying your credit cards and loans but in a systematic way.

In my courses and live events, I teach a system called the snowball effect.

To start write down the outstanding balances on all your credit cards and loans. You may wish to use a simple spreadsheet or a pen and paper.

Then write down the interest rate and minimum monthly payment for each one.

Next rank them in order of the outstanding balance, with the lowest at the top.

Each month you commit to overpaying that amount by as much as you can. Maybe you can earn a little extra from working overtime, a second job or a side hustle business. Maybe you can also trim your expenses elsewhere.

Imagine that the minimum payment was £40 as in our earlier example and you could find an extra £50 per month and you directed the combined £90 at the first balance. All the extra payments are taken off the principal because your regular payment is covering the interest.

After a few months that debt has gone. You now have a ‘spare’ £90 per month which you use to target the next lowest balance. Now that card will be cleared in a much shorter time and you can roll the mount you were paying there onto your next debt.

It also works for loans and even your mortgage, if your provider will allow a degree of over payment.

In Summary

Lots of information here so let’s recap.

Start by getting clear about how much you owe, and the minimum payments needed for each card or loan.

Then look to switch to zero or low-rate cards if you can.

Ake sure you are paying a minimum amount as a fixed sum rather than a percentage.

Finally use the snowball effect to create a plan and stick with it. You will see the debts dissolve in record time.

It takes a little time and discipline but as Jim Rohn so eloquently said, the pain of discipline is always less than the pain of regret.

If you would like some help or coaching through this, debt management forms part of my Financial Liberation programme, which is a 6-week live online course. Details are on our website at fearlessfinance.co.

How Your Home Can Increase Your Income

With the cost of living rising and many people’s finances being pushed to the limit, it is unsurprising that an additional income is an appealing idea for many people. Everyone would like the opportunity to earn more money and give their finances a boost. But, other than working extra hours at your current job, knowing how to make more money can be challenging. One money-making opportunity you may not have considered is earning money from your home. If you own your property, you could be in the perfect position to start making some extra cash. If you are interested in earning money from your home, here are some options to consider:

Sell Your Land

If your home is set on a spacious plot, you may be in a position to sell some of this land and enjoy some healthy earnings from it. Many real estate developers seek out plots that can be used to build new residential and commercial developments, so if you have land that you are not using, this could be a great way to earn some money. Companies such as NFC Homes are continually looking for land that could be used for development, so it could be worth looking into this further. 

Get a Lodger

Renting out a room can be a great way to earn extra cash if you have plenty of space but do not want to downsize to a smaller property. A few options are available if you have a spare room; renting it out to a lodger could provide you with a steady monthly income. If you live in the city, you may be able to rent it out as weekday accommodation to a professional person who works in the city and wants to avoid a long commute. Alternatively, you could opt for a long-term rental agreement and rent the room to a full-time tenant. Another option to consider is to use your spare room as accommodation for international students; many people make by renting rooms to students for several weeks each year.

Rent Out Storage Space

Renting out your garage or another outbuilding at your property could be a great way to make extra money each month if you do not use it yourself. Having enough space for their belongings is something that many people struggle with, so if you have some extra space at your home, you could put this to use. But, before you rent it out, don’t forget to check for any insurance implications it may have if there was a break-in or damage to the property that is being stored.

Let Your Driveway

If you live in an area close to town, near a sports ground, or a major employer, you could have a lucrative opportunity ready and waiting for you. Many people struggle to find parking when they need it, especially for work, so renting out your driveway is an excellent way for you to put it to use and earn some extra cash in the process.

A Simple Money Management System

The definition of financial wellbeing is a feeling of certainty and empowerment around your money, both now and for the future. Setting up an effective yet simple money management system is certainly one way of helping to achieve that and gaining valuable peace of mind at the same time.

Can you image a beautifully organised walk-in wardrobe? With a place for all your clothes, shoes, bags and more. For me something like the Great Gatsby, comes to mind, with all his shirts and suits perfectly tidy and organised.

Now imagine the opposite, all your belongings just thrown into a pile or dumped into an inflatable paddling pool. Every morning you rummage through trying to find a matching sock, or a top which is not too obviously un-ironed. If this feels a little extreme just picture a typical teenager’s room to get the idea.

Its safe to assume that most of us would prefer door number 1, the organised, systematic and tidy system for the ease, comfort and certainty it brings.

After this detour into home makeovers, you may be asking what has this got to do with personal finance? Allow me to explain…

A Simple Money Management System - image of a tidy dressing room / wardrobe

In many cases our bank accounts and financial lives are more like the paddling pool than the tidy, well-ordered system.

Money comes in and flows out but we are not entirely sure how much or to where. There are direct debits and standing orders, credit cards, PayPal, Apple Pay and who knows what else. All in the big paddling pool and we hope that the important bills are paid and there’s a little money left at the end of the month.

Surely there is a better, less stressful way?

The first step is to know your numbers. This was explained in a previous post, so if you haven’t read that one yet you might like to catch up when you can.

But assuming you have a pretty good understanding of how much you earn and how much you spend, here is a 3 step plan for an effective yet simple money management system.

  1. Additional Bank Accounts

Opening an additional bank account can be easily achieved by either contacting your existing provider or perhaps opening a new one with one of the online banks such as Revolut or Starling. (If you are listening outside the UK – firstly hello and secondly there will be equivalent banks local to you). I suggest having 2 current accounts plus a savings account.

2. Pay Yourself First

Rather than waiting until the end of the month and hoping there is a little money left to move to savings, after all the bills and everyone else has been paid, make yourself a priority.

I am going to suggest you set up an automated transfer for two amounts. The first is for savings, the second for Walking Around Money. Let’s concentrate on savings first. Take a proportion of your income and move it to a new or existing savings account.

How much, well that depends on your circumstances. In some ways the habit is more important than the actual amount. Because you are showing yourself and the universe that you are now taking control of your finances and honouring your financial future by paying yourself first.

As a rule of thumb aim for 10% of your monthly income, more if you can but less is ok if that is what your current circumstances will allow.

The second transfer is for your Walking Around Money, or WAM. This is discretionary income which is not already allocated for bills, food or credit card repayments for example.

Again, knowing your numbers is crucial here because by understanding how much you need to cover your monthly costs, you will also know how much you have left to spend as you please.

You can transfer your WAM either monthly or weekly to your newly minted second bank account. Then only use this account for your day to day spending, secure in the knowledge that it will be topped up again at the end of the week.

3. Using Your Primary Bank Account

Your original bank account is used to receive your monthly salary and from it you pay all your bills and regular expenses. You feel secure knowing that all your expenses are covered and automated. Then you can leave that account to happily run along in the background, with just the occasional check to make sure you have included everything and there is always a small positive balance.

Meanwhile you have a growing savings account thanks to your regular contributions and a weekly allowance which you are free to spend as you like.

So there you are an effective yet simple money management system that you can have up and running in less than an hour but will save you time, effort and worry for years to come.

If you liked this post you will enjoy listening to the fearless finance podcast. I look forward to having you join the growing tribe improving their financial wellness together.