Smart Ways #49: Don’t just trade hours for dollars – create passive income

We’ve covered the very basics in borrowing money and saving money. So let’s look at what we call ‘passive’ income, something that earns money long after the source of the income has been set up -it is a key strategy for many of the highest earners in the world today!

One of the best illustrations of this business philosophy, is told by Burke Hedges in his book The Parable of the Pipeline. Wealth-hungry Italian pals, Bruno and Pablo, landed a job carrying buckets of water to and from the river to the town well, paid one penny for every bucketful of water. But it was back-breaking work, so Pablo decided to build a pipeline. Bruno, however, preferred to just carry more buckets and pocket money daily. While Bruno enjoyed the fruits of his labour immediately, Pablo toiled for months over digging a ditch and installing his pipeline.

Finally, it was complete and Pablo began to rest, eat and play while the water flowed of its own accord into the well. Not surprisingly, Bruno was now tired and out of business, but he eventually swallowed his pride and joined his old friend building more pipelines.

In bearing short term pain for long term gain, Pablo built more than a pipeline; he built a passive income system. I encourage you to use your creativity and find a way to create an income (legally and morally) that gives you this kind of income stream.

Smart Way #49 of Making It on My Own; 52 Smart Ways to Smash It in the Real World.