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Wouldn't it be wonderful if you could design a machine that can generate cash every hour of the day? Whether you were eating, playing or sleeping, this device would ensure that you were consistently supplied with a steady stream of income. Your money problems would be history and the lifestyle of the financially free would be yours forever.

While many of us would love to possess a magic money machine, this apparatus would probably be impossible to build, and it would definitely be illegal. However, the concept of creating an income source that could eventually produce earnings without your personal effort is something that is entirely in your power to achieve.

Do you have to work to earn?

Most of us have grown up with the idea that the only way to earn money was to physically work for it. We were taught in school to study hard, get good grades and look for a nice job with attractive fringe benefits. For the most part, our education system does not foster entrepreneurial thinking which focuses on teaching people how to create income-generating systems.

Creating a system that will produce income requires us to think differently about how we earn. Most employees and self-employed people are paid for their time and physical effort; to get an income they have to carry out some activity. This type of earning is called linear income, which requires the work output to be constantly repeated in order to make more money.

How can you get paid for something that doesn't always demand your time and effort? The answer lies in understanding how to create passive income sources, which are not dependent on your direct involvement to produce your earnings. While you would initially have to work at building this 'money machine', it will eventually generate income without your physical efforts.

How to earn while you sleep

The simplest form of passive income is portfolio income, which is derived from investments that generate earnings. These include stocks that provide dividends, bonds and money market instruments that pay interest, and real estate that supplies rental income. However, it can take many years for you to build a large enough asset base to generate a meaningful income.

Another way to earn passively is to build a money machine that brings in residual income. Residual income is generated when your initial work output is designed to pay you over and over again. For example, if you create a product such as an eBook, music score or an application for a smartphone, you can sell your work repeatedly without having to produce it from scratch again.

Building a money machine that utilises other people's work effort to generate income is another means of creating passive earnings. This is known as leveraged income, which involves working along with other people in order to increase your final work output. Business owners generally make use of leverage when they hire employees to carry out various tasks.

Turn-key money machines

You don't have to start your own traditional enterprise to earn from leveraged income. There are direct selling companies that allow individuals to become independent representatives to distribute their goods and build networks of other business owners. The networking organisation will reward business builders with a percentage of the revenue generated by their teams' efforts.

We are living in the age of technology, which makes it easier for everyone to earn passively. Even if you don't have the financial means to amass assets which generate portfolio income, or the technical know-how and talent to create a product for sale, or the time and resources to build a business, you can still seek to earn passive income online.

One Web-based option is called affiliate marketing. Online businesses, such as Amazon.com, encourage persons to sign up as affiliates and market their products and services. Anyone with a simple website can promote these offerings and receive a commission on sales. You would have to use creative marketing techniques which encourage persons to purchase your affiliate products.

Start the building process

Lasting freedom from financial stress will come when you find a way to build a passive 'money machine' of your own. Your mission for this month is to learn more about the concept of passive income. You can find several articles on this topic on www.financiallysmartadvice.com and other websites.

Consider different ways in which you can generate passive income. Start by saving and investing as much as possible to build your portfolio income sources. Do you have any talents or ideas that can be packaged into a product that can be sold repeatedly? Look at ready-made business opportunities in network marketing or become an affiliate for someone else's online business.

Don't be afraid to attempt something new in your search for passive income opportunities. Carefully research all options to ensure that they are legitimate, and don't give out sensitive financial information online. Over time, you could build a money machine that gives you the ability to live the life of your dreams.

Cherryl is a money coach, business mentor, and founder of Financially S.M.A.R.T. Services. Her upcoming book The 3 Ms of Money will reveal all the secrets she learned about financial success. Get more advice on money and business matters at www.financiallysmart.org and www.entrepreneursinjamaica.com. Email comments to cherryl@financiallysmartonline.com.

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MINISTER of Finance and Planning Dr Peter Phillips says he will soon be meeting with International Monetary Fund (IMF) representatives to discuss the timelines for the next phase of negotiations.

"With respect to the negotiations with the IMF, I expect, in the next few weeks, to visit Washington to determine with the Fund the timelines for the next phase of our negotiations in the light of this (2012/13) Budget (including the revenue package) and the other outstanding issues," he said.

Closing the 2012/13 Budget Debate in the House of Representatives yesterday, the finance minister said every effort was being being made to conclude the negotiations post-haste.

"While one cannot predict with certainty the exact timing of the conclusion of the negotiations, I am working to bring them to a conclusion later this year," Dr Phillips said.

He noted that the IMF board met on May 30 to review Jamaica's 2011 Article IV consultation, which, among other things, provides an insight into the issues that will be of concern to the IMF's Board when it is asked to consider approving a successor programme to the aborted Stand-By Arrangement.

The minister pointed out that the report on the Article IV consultation will be published both by the Fund and the his ministry as soon as it is cleared for release.

"The draft report we have seen contains no surprises to anyone who followed my analysis of our current situation. The Board discussion and conclusions focused on some of the very areas which we have emphasised, that is, the need to: boost growth and competitiveness; and enhance fiscal sustainability," the minister said.

Dr Phillips said the IMF board broadly agreed with the assessment that a strong upfront fiscal adjustment is necessary to place the public debt on a clear downward path and to create buffers to protect against further negative shocks.

"In this regard, the IMF board stressed the importance of tax reform, containing public wages and employment, improving public financial management, and strengthening tax administration as necessary underpinnings of the fiscal consolidation efforts," he said.

In the meantime, he said the Government will be making "unprece-dented efforts to correct the slippages of the past year and is moving steadfastly to put in place a tax policy that aims at equity.

"We also intend to implement a system for parliamentary review that allows all of the people's representatives to participate to a greater degree in monitoring the programme. Hopefully, this will enhance and entrench the objectives of the fiscal responsibility framework. A broad range of issues and details are involved in coming to an agreement with the IMF," he said.

The finance minister said some of the areas of key importance are: wage restraint; pension reform; tax reform, including incentives and waivers reform and improvement in tax administration; and competitiveness reform, reducing impediments to doing business and reducing significantly the cost of energy.