Passive Income Business

You can get Passive Income from investments or businesses, dividend income, interest on notes receivable, capital gains, trademark payments, rents and royalties.

But note the definition of a business!

Owning a business that provides passive income means the business works without you having to be there. You have a business if you can leave it for a year or more and then return to find it more profitable and running better than when you left. But if your business would falter without you then it’s more like a ‘job’ than a business.

Why is McDonald’s is so successful even though it’s run by high school students and without the owner around? Because McDonald’s has designed an effective and efficient marketing and distribution system. The owner has created a system that is so simple that even a high school student can follow. It is also a system that can be duplicated by franchisee all over the world.

You must learn how to run the business without you. Only by doing this can you create more profitable businesses by leveraging your time.

So you can think of earned income as coming from something you do. Passive income comes from businesses or real estate that work for you.

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