Ultimately, one of the goals we all want to smash is that of financial freedom. Financial freedom is where you have the choice to do whatever you want, when you want to. Where your days are not dictated by the money you make or the rivers you cross to make this money.
Money can buy you your financial freedom. One of the ways to buy this freedom is to build a steady stream of passive income.
Active income is the money you make while you are awake, while the sun is up in the sky. Passive income is what you make while you are awake and sleeping, its hours are not limited by the position of the sun and its earning potential is unlimited.
Your active income is likely the salary income from your job or the profits income from your business. Perhaps both.
Your passive income is likely the rental income from your property, leasing income from your equipment or royalties income from your creations (product or service). The investment income is also another stream of passive income.
Let me use my personal example to show you where I am coming from. I am a writer and an author. I am also an urban wife and mother to two toddlers. I make my money from writing.
My active income from writing comes from writing newspaper columns, stories such as this one you are reading. I write about money, urban culture and home styling. I write strictly from Monday to Friday.
I am only paid for published articles. If I don’t write, I don’t get paid. If my stories are not published, I don’t get paid. If I am under the weather and I am unable to write, I don’t make money. When I am grounded on maternity leave, I don’t write, so I don’t make any money. When I am pregnant, I am sorely unproductive and I write less, so I make less money.
My passive income is from my book. I published it myself in December 2021. I am selling it directly myself, I am also stocked with all the major bookshops in Kenya. The income from my book is not dependent on the inhales and exhales of my urban life. It sells day and night, from Monday to Sunday.
There are moments right before I sleep when I hear my phone ping with a message alert – it is an M-Pesa from a client. A purchase may be made overnight and I will wake up to another M-Pesa from another client. As I write this, I am hopeful there are Kenyans in the bookshops I am stocked with, holding my book in their hands and heading to the till to make their purchases.
My book sells if I am under the weather or if I am as peachy as a plum. It will keep selling when I am carrying the next pregnancy or nursing the next baby on maternity leave. Even on the days when the demands of motherhood get in the way of beating my newspaper deadlines, the book still sells.
It has also opened unexpected humbling doors – I am invited to speak at money events, I charge a fee for this.
As with any stream of passive income, the book demanded a massive time and cash investment upfront – time to write the book itself and money to publish it. I am still investing both to keep sales going and my passive income steady.
You too can create your own product to sell to the Kenyan – and overseas – market. Think of your technical skills. Think of your natural skills. Think of your professional and personal networks. Think of ways you can harness these ready-at-hand assets to create a product that will keep selling and raking in money no matter what the sky looks like.
Florence Bett-Kinyatti is a certified accountant and former financial auditor. She is also the author of the book ‘Should I? Your questions about money.’
