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Personal Finance

How to shift your livelihood from active to passive income (Part 1)

So these are the six stages to a solid passive income.



Borrowing money, Personal Finance Culture: The 4 C’s of Financial Success 

One of the greatest things you can do in life is to transfer your source of livelihood from active to passive income. Active income is any income that requires ongoing work to thrive. And Passive income is income that can thrive without work.

These two sources of income are the two main ways people earn money in the world. However, active income is stronger than passive income because all wealth is created through active income. And passive income is safer than active income because all wealth is preserved through passive income. Passive income is also the only kind of income that can thrive in all economies.

But not all passive income is created the same and not all passive income is immune to the economic effect. There are two kinds of Passive income. The first is the economy impacted passive income and the second is the economy protected passive income. Economy impacted passive income is passive income that goes up and down with the economy. This type of passive income requires ongoing maintenance and investments to thrive. And there is the worse type of passive income to depend on. If you want financial freedom and peace of mind you must depend on the second type of passive income. The second type of passive income is the economy-protected passive income. This is passive income that can thrive in any economy. There are safe, stable, and predictable and can relieve you of the pressure to keep working for money. The economy-protected passive income is thus the most dependable type of passive income to rely on. When you reach the stage in your life where you have this kind of passive income. You are said to have achieved total financial freedom.

READ: How to build solid financial success system and achieve financial freedom quickly

Unfortunately, only a few people know how to get to this point or even create this kind of passive income. Most people are just investing and hoping that they will create this kind of passive income at some point in their life. Yet hope is not a good investment strategy and these people never really achieve their goal. I know this because research shows that Out of 100 people that invest only 1 person will become wealthy. 4 will become financially free. 15 will have some savings put aside. And a whopping 80 people will be dependent on other people, on pension, or flat out broke in retirement. The one big question to ask yourself is where will you be at the end of your career. And how do you propel your life from an active income to a passive income?

The answer is simple and it is threef1old.

First, you need to know your Passive income profile. Second, you need to know how to move your life from active to Passive income. And third is you need to know the passive income time wasters. Let’s look at each of these components in detail.
1.Your Passive Income Profile

Not everyone can build a solid passive income that is work free and economy protected. Neither is everyone at the stage where they can begin this journey. Yet every day I receive tones of email from people who have no business pursuing passive income. So today, I will outline for you the different stages in the Passive income process. And what qualifies to build solid passive income.

READ: This thread exposed everything that’s wrong with Nigeria’s VAT

The Six Stages to building Solid Passive Income

There are six stages to building a Solid passive income. Each stage is arranged in the order of occurrence. That is the stage above must be accomplished before the stage below it. And there are no skipping stages if you want to build solid passive income. The first stage is the regular income earner stage. The second stage is the big portion Saver Stage. The third stage is the Emergency Protection stage. The fourth stage is the Cash Reserve Builder stage. The Fifth Stage is the Passive income Investing stage. And the sixth stage is the Double income Earner stage.

i. The Regular Income earner Stage

All passive income is created from active income. Thus you need active income to create passive income. The more active income you have the more passive income you can create. That is Big Active income equals Big Passive income. And Small active income equals small passive income and so on. This means that a solid passive income is created by first focusing on building a strong active income. Investing only comes into the picture when you have enough active income to invest. Spending time on investing at the stage. When you should be focusing on earning and saving more is the key to postponing your freedom. Your investments will always need large amounts of active income to thrive.

READ: How stockbrokers are coping with a bear market

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So if you are a low-income earner, your focus should be to first become a high-income earner. And then to save a big part of your income. If you are a high-income earner, your focus would also be to save more. You must save more before you invest more.  This is because earning a high income does not automatically qualify you for building a solid passive income. High Income does not translate to passive income. It is high income plus high savings that build passive income. Thus the more money you make and save the faster you will achieve your Passive income goals.


ii. The Saver Stage

The Saver stage is the stage where you save a big part of your income consistently each month without fail. Saving is critical for investing as it is your passive income goal. According to W Clement Stone, if you cannot save, the seed of greatness is not in you.

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Thankfully everyone can save but most people choose not to save. They chose to sacrifice savings for other items in their lives. And call it a savings problem. No one has a savings problem. People have priority problems. And if you must build a solid passive income you must make it a priority for you.

There is virtually no one that I know who has not purchased an item that required some form of savings to achieve. So everyone is a saver. But most people only save for things that are important to them. And When you make building solid passive income important to you. You will figure out a way to save.

iii. The Emergency Protection stage

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The Emergency protection stage is the stage where you protect yourself from the one emergency that can disrupt your living standard. This emergency is the sudden income loss emergency. The loss of income can disrupt your passive income journey and your life so you need to protect yourself from it. This is so that you can maintain focus throughout your passive income journey. There are two kinds of emergency protection you can have. The first is the living standard emergency protection. And the second is Lifestyle emergency protection. Living standard emergency protection protects covers your basic needs for at least 12-24months. And lifestyle emergency protection sustains your current Lifestyle for 12-24months. Whichever kind of protection you seek to pursue. The key is to know that protecting yourself from emergencies is critical for long-term investing success.

Without emergency protection, there will be investment disruptions. Financial distractions and in most cases a complete abortion of your passive income goals. Emergency protection is thus critical if you want to build solid passive income. When you achieve emergency protection the next step for you is building a solid cash reserve.

iv. The Cash Reserve Builder Stage.

The cash reserve builder stage is the stage where you build extra cash reserves for investing. That is cash reserves that are dedicated for investment purposes and free from everyday distractions. Having a solid cash reserve is important as it helps you engage in long-term investments without stress. You are able to put away your money for the long term. In exchange for a greater reward. This is the only way to build a solid passive income that takes about 5-15 years to complete.


If you do not yet have this kind of cash reserves, the key is to focus on building one first. And to target building cash reserves that are at least N1.5million-N3.5million every year. This amount can be bigger or smaller depending on the passive income goal you are trying to achieve. The Cash Reserve builder stage is thus what qualifies you as ready to build a solid passive income. This is the differentiator between those who are ready to fund their lives from a passive income and those who are just booting.

v. The Passive Income Investing Phase

The passive income investing phase is the phase where investing takes place. This is the phase where you build the asset base that funds your solid passive income. It comprises setting clear passive income goals. Choosing the right asset base. And setting up your passive income investment vehicle. There are two stages involved in the process. The first stage is the investing stage. This is where you fund the asset base that produces your passive income. And the second phase is the Cash-flow phase. This is where you earn passive income. Thus building a solid passive income involves years of investing before earning. This is the only way to create the kind of financial security that 95 percent of your friends, relatives, and neighbors will never have.

vi. The Double Income Earner Stage.

One source of income can begin a passive income journey but it is hard to sustain it throughout its lifetime. Thus you need to add a second source of income to your main income as you go along. To make this addition you need high-income side hustles and earning opportunities. That gives you massive income leverage. The fastest way to earn this kind of income is through high ticket Sales side hustle. And we have created a system to help you earn this kind of income. Our system gives you the opportunity to supplement your main income by helping other people take the steps that you have taken. However, our system is only open to our clients. This is because we believe that a person must use, test, and trust a product or company before they recommend them to their important relationships.

But whether you use our high-income system or not, the key is to recognize that you need side hustles to achieve your passive income goals.

So these are the six stages to a solid passive income.

Now, that you know the different stages of passive income building and where you belong. Let’s look at how you can move your life from active income to passive income.

About author

Grace Agada is The Senior Financial Happiness Director @ Create Solid Wealth. She is an Author, and Column Contributor in Six National Newspaper. She is a contributor at BellaNaija, Nairametrics and Proshare and she is on a mission to help working-class professionals and CEOs become more financially successful. To learn more about Grace and how she can help you send an email to [email protected]



  1. Adebimpe Sosan

    February 19, 2021 at 11:30 am

    Let’s just say this is the template for financial freedom!

  2. Idris

    February 20, 2021 at 9:29 am

    Hi Grace, what a piece. Can you provide your email address, I would like to reach out on how to achieve these principles..

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Personal Finance

5C’s of creditworthiness: What lenders, Investors look for in a business plan

Business owners need to be aware of the criteria lenders and investors use when evaluating the creditworthiness of entrepreneurs seeking financing.



Five things to consider before securing a loan

Banks usually are not a new venture’s sole source of capital because a bank’s return is limited by the interest rate it negotiates, but its risk could be the entire amount of the loan if the new business fails. Once a business is operational and has an established financial track record, banks become a regular source of financing.

For this reason, the small business owner needs to be aware of the criteria lenders and investors use when evaluating the creditworthiness of entrepreneurs seeking financing.

Will the business that an entrepreneur actually creates look exactly like the company described in the business plan? Of course, not.

The real value in preparing a business plan is not so much in the finished document itself but in the process it goes through – a process in which the entrepreneur learns how to compete successfully in the marketplace. In addition, a solid plan is essential to raising the capital needed to start a business; lenders and investors demand it.

Lenders and investors refer to these criteria as the five C’s of credit.

READ: 5 ways to raise funding for your business

1. Capital: A small business must have a stable income base before any lender is willing to grant a loan. Otherwise, the lender would not be making, in effect, a capital investment in the business. Most banks refuse to make loans that are capital investment because the potential for return on the investment is limited strictly on the interest on the loan, and the potential loss would probably exceed the reward. In addition, the most common reasons that banks give for rejecting small business loan applications are undercapitalization or too much debt. Banks expect a small company to have an equity base investment by the owner(s) that will help support the venture during times of financial strain, which are common during the start-up and growth phases of a business. Lenders and investors see capital as a risk-sharing strategy with entrepreneurs.

2. Capacity: A synonym for capital is cash flow. Lenders and investors must be convinced of the firm’s ability to meet its regular financial obligation and to repay loans, and that takes cash. More small businesses fail from lack of cash than from lack of profit. It is possible for a company to be showing a profit and still have no cash – that is, to be bankrupt. Lenders expect small businesses to pass the test of liquidity, especially for short term loans. Potential lenders and investors examine closely a small company’s cash flow position to decide whether it has the capacity necessary to survive until it can sustain itself.

READ: How to scale as a small business on a budget

3. Collateral: Collateral includes any asset an entrepreneur pledges to a lender as security for repayment of a loan. If the company defaults on a loan, the lender has the right to sell the collateral and use the proceeds to satisfy the loan. Typically, banks make much unsecured loans (those not backed up by collateral) to business start-ups. Bankers view the entrepreneurs’ willingness to pledge collateral (personal or business assets) as an indication of their dedication to making the venture a success. A sound business plan can improve a banker’s attitude towards venture.

4. Character: Before extending a loan or making an investment in a small business, lenders and investors must be satisfied with an entrepreneur’s character. The evaluation of character frequently is based on intangible factors such as honesty, integrity, competence, polish, determination, intelligence, and ability. Although the qualities judged are abstract, this evaluation plays a critical role in the decision to put money into a business or not.

READ: 7 Ways to pay for your higher education

5. Conditions: The conditions surrounding a funding request also affects an entrepreneur’s chances of receiving financing. Lenders and investors consider factors relating to a business’ operation such as potential growth in the market, competition, location, strength, weakness, opportunities and threats. Another important condition influencing the banks is the shape of the overall economy, including interest rate levels, inflation rate, and demand for money. Although these factors are beyond an entrepreneur’s control, they still are an important component in a banker’s decision.

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The higher a smaller business scores on the five C’s, the greater its chances of receiving a loan.



Written by Chukwuma Aguwa

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Personal Finance

Don’t be fooled by COVID-related scams

Always consult the institution in charge of health-related matters to confirm any fishy information you come across.



The nature of and the manifestation of the Covid-19 disease is such that there’s only a little time available to remedy the situation before it gets chronic. Although the infection begins by exhibiting mild symptoms, if you do nothing in a short time, it could lead to death in a matter of days.

This whole picture has caused many to become desperate about Covid-related issues, launching into panic mode at the sight of any information. As a result, such people are not far away from falling for fraudsters.

With the different kinds of news flying around, you mustn’t be fooled by Covid-related scams.

The Coronavirus threatens the health of millions of people around the world daily, also killing thousands along the way. To curb the spread and remedy the situation, bodies like the CDC, WHO, and every country’s local health organisation like the NCDC, frequently circulate information around communities. However, it has also led to fraudsters taking advantage to provide fake news, and even asking for donations.

Each day, there seems to be a new account or NGO asking for donations into the health sector, and though some are legit, many are just fraudsters posing to take advantage of innocent citizens. So far, numerous complaints about scams have been recorded, especially with people who are looking to support the health cause in any way they can.

READ: Africa to spend $9 billion on Covid-19 vaccine, access to supply is big problem

Channels used for COVID-related scams 

There are three major ways scammers take advantage of the haziness of the situation to dupe people. To start with, they appeal to the emotions of humans, who see the high death toll and suffering. As a result of what is happening, people have been willing to donate funds for medical supplies, isolation centres, and financial compensation for medical workers.

Scammers take advantage of this by posing as charity organisations and solicit for funds. Most times, as soon as their target is met, they clear their footprint without leaving a trace behind.

Another way they scam people is by manufacturing and selling fake or low-quality health products. Everyone wants to get their hands on a cure, or something that can at least protect them from the virus, and scammers are meeting their needs by providing just that.

READ: China joins WHO vaccine programme as it fills huge gap left by United States

The World Health Organization currently approves only one vaccine, and any other thing outside it is outrightly fake or just a supplement that will help your body. Currently, only the Pfizer vaccine is clinically tested and approved to work. Be sure to not throw your money in the wind by purchasing some of these fake drugs around.

Lastly, scammers create systems to extract a patient’s personal information, thereby having access to the person’s true identity. It could be in the simple form of opening a registration portal where you supply all your details.

Therefore, only give information to approved bodies and not any random online site that appears legit. These fraudulent individuals can do a lot of damage to your identity. Stay vigilant, only communicate with approved bodies, and always ask questions if you are not sure or suspect foul play.

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The place of electronics in COVID-related scams

These fraudsters usually reach out to you through the digital sphere. Hence, watch out for cold calls, text messages, or emails requesting donations to certain bodies. The best way to confirm the legitimacy of such a message is to visit the organisation’s official website in a different browser. Never follow the link in the mail or text directly, as it can be easily embedded with spyware. Therefore, a single click could see them extract all your personal information, including bank details.


Also, please stay away from those who claim to have a cure, and accompany it with testimonies of people who have used it. They are low graders desperate for your money. Vet them by searching online and see what people are saying. In all, always look out for suspicious messages, and opt out if you are sceptical.

In a nutshell, you should not believe any cure, vaccine or supplement that the World Health Organization does not approve of.

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The government or legit health institutions do not cold call citizens to request donations or coerce them into making one. If you receive a call out of the blues, chances are it’s a scam, which is why they mostly try to hurry you to donate before you realise it. Always consult the institution in charge of health-related matters to confirm any fishy information you come across.

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