Traps to watch out for when creating a passive Revenue Stream

For many people, the main goal in earning passive income is to have a steady stream of money flowing into your bank account regardless of where you are. Some of the more common sources of passive income are dividends from stocks, royalties and interest from bonds.
When you’re in the process of finding sources for your passive income streams you should be aware of and look out for the safety of your income stream, the growth in the amount generated within a year and tax consequences.


When you check your bank account and direct deposit you should be mindful of what you’re expecting to go into your bank and if it’s not, to take priority in ensuring safety and making decisions to securely gain funds. You want to make sure that your passive income flow is running smoothly and that you’re getting the money that you are entitled to without undue hesitation. Check your accounts and keep track of what is supposed to be coming in and going out. There are unfortunately disloyal sources that can be playing you and ultimately taking you for a ride!


With each independence source of passive income being taxed, it is important to be aware of how much you will actually be earning after your tax has been deducted. The dividend is currently taxed at 15% and in comparison other distributing limited partnerships are taxed low amounts or not at all. Another thing to look out for is assets that are held in your accounts like Roth IRA which may not be tax bound unless you fall into the trap with Unrelated Business Taxable Income trigger and also UBTI.
When you’re calculating your overall assets, beware of tax and evaluate your total net costs and if it is providing you with the standard of living that you need or desire from your passive income streams.

Don’t expect instant Results

Many beginners in earning passive income get caught up in believing that they will instantly start earning passive amounts of income daily. Unfortunately, this is not the case at all. If you were to create an EBook and then publish it onto Amazon Kindle, you would have to wait a while before making a steady income, it’s not to say that the EBook itself is not worthy, it’s that there are so many people publishing EBooks making the market extremely competitive. You can make an income but it may not be passive. It could eventually form into passive income but it’s a slow process that can take a while and requires consistent work, meaning you would need to market and promote your EBook so that it attracts potential customers.

Low Income

Generally when you first start in the world of passive income you will find that instant income from the many sources that you’re using are not generating large amounts of money for you. The reality is that it takes time and perseverance, overnight success will not happen, but eventually if you keep going and have hope in what you’re doing and commit to the hard work you will get there. Success is formed by constant dedication and being able to continue even when you feel devalued and demotivated from the lack of results.

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