In the next 4 weeks, I will be taking you through a 4-part series on Personal Finance. In this second part of the series, which is this blog post, I will teach you how to make money and get rich.
This will be a complete guide where you will be able to learn everything about how to make money, both actively and passively. I will teach you various business ideas and money-making ideas, and show you step by step how you can start and go ahead to make money from each idea.
Understanding the difference between active income and passive income is key to achieving financial freedom. While active income requires your time and effort to earn money, passive income allows you to make money with little to no ongoing work. Let’s break it down!
Active Income
Active income is money you earn by directly exchanging your time and effort for payment. If you stop working, the income stops.
Examples of Active Income:
- Salary or Wages: Working a full-time or part-time job.
- Freelancing: Writing, graphic design, programming, etc.
- Consulting: Getting paid for your expertise.
- Hourly Work: Any job where you are paid by the hour.
- Commission-Based Sales: Sales representatives, real estate agents.
Downsides of Active Income:
- Time = Money: If you don’t work, you don’t earn.
- No Long-Term Wealth: Doesn’t build lasting financial security.
Example: If you’re a software engineer earning $5,000 per month, you only make money as long as you keep working. If you stop working, your income stops too.
Passive Income
Passive income is money earned with little to no effort after the initial work is done. It allows you to make money while you sleep!
Examples of Passive Income:
- Investments: Stocks, dividends, real estate, and bonds.
- Rental Properties: Earning money from tenants.
- Affiliate Marketing: Promoting products and earning commissions.
- YouTube or Blogging: Creating content that keeps earning revenue.
- Online Courses & eBooks: Selling digital products.
Benefits of Passive Income:
- Financial Freedom: You don’t have to work every day to earn money.
- Time Flexibility: More free time to enjoy life.
- Unlimited Earning Potential: No cap on how much you can earn.
Example: If you invest in dividend stocks that pay $100 per month, you keep making money without working daily. And the more you invest, the more you make, and the money you make can make more money for you. So your money is just working for you.
Which One Is Better?
Active income is necessary at first, especially to pay bills and save money. Passive income is what leads to financial freedom and wealth-building.
The goal is to use active income to build passive income streams, so you don’t have to work forever.
Final Thoughts: The Smartest Approach
- Start with active income (job, freelancing, business, and so on).
- Invest in passive income streams (stocks, real estate, digital products, content creation).
- Transition to passive income over time so you have financial freedom!
Different Stages of Making Money
1. Get a job
- Get a job to make money to pay your bills (it could be any job)
- If the job is in a field that you have so great interest in, develop yourself to become the best
- Get mentors in that field
- Rise through the ranks
2. Learn a skill
- Identify a profitable skill
- Learn the skill (free or paid options)
- Practice & Build Experience
- Create a Portfolio & Personal Brand
- Start Earning Money
- Scale Up & Increase Your Income
3. Sell Something
- Choose what to sell
- Research the market
- Source or create your product
- Set the right price
- Choose where to sell
- Market or Advertise Your Product
- Provide great customer service
- Scale & Grow your business
4. Content Creation
- Choose your niche
- Choose Your Platform
- Create High-Quality Content
- Grow Your Audience
- Monetise Your Content
- Scale Up & Earn More Money
5. Online Education & Coaching
- Choose a Profitable Niche
- Decide How to Deliver Your Training
- Create Your Learning Materials
- Choose Where To Sell Your Courses or Coaching
- Market & Promote Your Training
- Price Your Course or Coaching Program
- Deliver High Value Coaching & Support
- Scale Up & Increase Earnings
6. Offer Services
- Choose a Profitable Service to Offer
- Define Your Service & Pricing
- Create a Portfolio or Proof of Work
- Find & Attract Clients
- Market & Sell Your Service
- Deliver High-Quality Service & Get Reviews
- Scale Up & Make More Money
7. Start a Business
- Find a Profitable Business Idea
- Validate Your Business Idea
- Create a Business Plan & Strategy
- Register Your Business & Get Legal Documents
- Build Your Business Brand & Online Presence
- Get Your First Paying Customers
- Market & Promote Your Business
- Scale Your Business & Increase Profits
>>RELATED: 10 Passive Income Ideas To Make $1,000 Every Month
Conclusion
In this part of the series, we’ve explored how to make money actively and looked at practical ideas you can start applying right away. Remember, simply reading or watching content won’t make you wealthy—true change comes when you take action.
In Part 3, we’ll shift gears and focus on how to invest your money wisely. That’s where you’ll learn how to grow and secure the income you’ve started building. You won’t want to miss it, so be sure to follow along with the series. In case you missed Part 1, you can find it linked right below.
>>MUST-READ: Beginner’s Guide To Personal Finance (PART 1)
