It’s a brand new year and most people have already made their New Year’s resolutions.

Some people want to lose weight. Others just want be healthier and adopt better eating habits. I would put money and bet that most resolutions this time of year have to do with health and wellness.

Yet, I believe that one of the underlying reasons why people can’t be healthy during the year is because they do not have the time or the energy to do so.

In this day in age, and especially in economic times such as the ones we are experiencing today, life seems to be getting faster, the every day hustle and bustle seems to be more stressful, everything is more expensive and by the time you get home you just want to relax.

Ask Yourself this Question, Instead of Making A Resolution

You may or may not agree with me but I believe that if most people had the money and time to do so, they would naturally be healthier and adopt good eating habits.

The reason why most people can’t or simply don’t is because of the demands of their daily routine – work, kids, traffic, etc.

Whatever your New Year’s resolution may be there is a very high probability that the underlying reason you have to make that resolution in the first place is because of a lack of time and money.

So instead of making a New Years resolution this year why not instead make a ‘commitment’ to earn a different type of income that will open up more time in your life?

 Types of Income

School only teaches us to make one kind of income – the kind that you have to work to get paid. If you don’t work you don’t get paid. It’s that simple.

This kind of income is often referred to as linear Income and is associated with  ‘trading time for money’ at a job. Linear income can also be the most expensive income that you earn because not only does it rob you of your most precious non-renewable resource – time,  it robs your loved ones of the time you could be dedicating to them as well.

Here are 3 other kinds of income that you should make a commitment to earn this 2012.

1. Portfolio Income – This type of income is usually income that is generated from investments in ‘paper assets’ more typically known as stock, bonds or mutual funds. Portfolio income is generated when you buy (invest in) stock from XYZ company at a given price and the price of that stock goes up in value after you have purchased it or when the company pays out dividends to it’s stock holders. In this economy however, finding a company to invest in that pays out dividends can be somewhat of a challenge.
2. Residual Income – This kind of income usually requires you to become a small business owner. Residual income is derived from one-time sales you make on a product you created or can also come from commissions earned from one-time product sales of a product someone else created. Residual income usually requires consistent work to keep producing sales of products.
3. Passive Income – This kind of income also requires you to become a small business owner and is every man’s dream! The reason for this is because income comes in day after day, week after week or month after month with very little work. Passive income is commonly also referred to as ‘leveraged income”.  The idea is that you leverage the efforts of others to create an income for yourself. For example, creating a product that you offer to the market place and allowing others to sell it to it for you, in return for a small commission, allows you to leverage those people’s work, time and efforts to create an income for yourself that can be generated week after week, with very little of your time spent to generate the income.

The advantage of becoming a small business owner (Residual and Passive income) is that once you become a small business owner, any expense you bare int he production of those  sales for your small business, can be applied against your profits. This ensures Uncle Sam only taxes you on pure profit. If you hold a full-time job (40 hours per week) with an employer and are investing ‘linear income’ earner to create a small business that will generate you residual or even passive income, any expenses incurred can be applied to your taxable linear income, drastically reducing your income tax rate.

In other words, Uncle Sam is letting you keep more of your money so that you can start a business (asset) and make more money.  How great is that?

Instead of making a resolution you may give up on by the end of January, why not instead make a ‘commitment’ to earn Residual or Passive income, this year?

Mastermind:

How would your life look if you could earn residual and passive income? How many hours would you work? How many hours would you dedicate to family?

Related posts:

1. Forget About Income Streams 101. Are You Ready For Income Streams 409?
2. Best Personal Finance Practices | Establish Passive Income Streams
3. Financial Intelligence | Insure A Future Income