WHAT IS PASSIVE INCOME ?
DEFINITION
Passive income is generally defined as a stream of income earned with little effort, and it is referred to as progressive passive income when there is little effort needed from the individual receiving the passive income in order to grow the stream of income. Examples of passive income include rental income and any business activities in which the earner does not materially participate during the year.
Passive income differs from active income which is defined as any earned income including all the taxable income and wages the earner get from working. Linear active income refers to one constantly needed to stay active to maintain the stream of income, and once an individual chooses to stop working the income will also stop, examples of active income include wages, self-employment income, material participation in an s corp, or a partnership. portfolio income is derived from investments and includes capital gains, interest, dividends, and royalties.
Now when you know what passive income exactly is now it is the time to know how you can generate this income. But like everything it also take times to six months to one year or more. It depends on the type. So lets see the list :
1. INVEST IN INDEX FUND:
If you want to earn a huge money in a very small time you have only one option, Share Market or Stock Market. But Index Fund is not like others. It is much safer than others.
Index funds give you a passive way to invest in the stock market. For example, if you invest money in an index fund based on the S&P 500 Index, you will be invested in the general market.This means you won’t have to worry about details like choosing specific investments, rebalancing your portfolio, or knowing when to sell or buy individual companies.
2. INVEST IN MUTUAL FUNDS:
There is nothing safe like Mutual Funds. A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities. These investors may be retail or institutional in nature. Mutual funds have advantages and disadvantages compared to direct investing in individual securities..
3.INVEST IN HIGH-YIELD SAVINGS
Savings account might be the most boring investment ever invented, but they are also the safest. At 0.15 percent interest or lower, you’d need to exceed the FDIC-insured $250,000 account limit to see any real action.
Online banks provide savings account rates as good as a CD without locking in your money for several years.
4. INVEST IN HIGH DIVIDEND STOCKS:
By building a portfolio of high dividend stocks, you can create regular passive income at an annual rate that is much higher than what you get on bank investments.
Just as important, since high dividend stocks are stocks, there is always the potential for capital appreciation. In that way, you can earn passive income from two sources – dividends and capital gains.
5. INVEST IN CDs:
A certificate of deposit offers you a secure place to stash your money and earn interest. CDs operate like online savings accounts, but they earn higher interest rates.While CDs are profitable in general, not all of them are created equal.
CDs are simple, straightforward, and if I’m being honest, far from the most exciting investment strategy out there. But if your goal is to make money while you sleep, there isn’t anything more passive than CDs. Investing in a certificate of deposit is a great-low risk strategy to accrue interest risk-free.
CDs are like savings accounts with a catch. You can’t touch your funds before they reach maturity, which is based on the time frame you set when you open the account. That time period can range from months to years.
CD rates are on the rise, putting them in the top of our list of the best low-risk investments. As you might guess, the longer the CD length, the higher the interest rate typically is. CDs are an awesome source of passive income because your interest rate is locked in, regardless of how interest rates fluctuate during the length of your CD.
6. CORPORATE BONDS:
Corporate bonds are an interesting alternative for earning passive income via the investment route. Corporate bonds are exactly what they sound like: bonds issued by corporations. Companies then use those investments to fund their business.
You can buy corporate bonds from major corporations and earn higher interest than you would on, say, a U.S. Treasury. That’s because a corporate bond involves a higher risk than a government backed investment.But if you approach corporate bonds wisely and do your research, the risk is relatively low. By looking into a corporation’s rating from the three major credit rating agencies, you can assess the company’s likelihood of defaulting. If they receive a high score, you can invest with confidence.
You can buy into bonds individually or set your sights on ETFs and mutual funds that include bonds. When it comes to purchasing corporate bonds, I recommend Ally Invest. With a robust offering of bonds and stellar rates, Ally is hard to beat.
7. REAL ESTATE:
If you have a good money in your hand you can simply invest in Real Estate. Real estate gives you a good return. Every year this industry is growing. Buy any property of your choice and sell it later.
Pro Tip: Invest in a very ugly property of a popular place. You can get a good deal.
8. RENT YOUR PROPERTY:
If you’re interested in making money in real estate but want more of a hands-on approach, renting out your vacation home, house, apartment, or even a single room can be a stellar way to earn passively.
9. START YOUR BLOG:
Take it from someone who’s reaping the benefits as we speak — blogs are an unbelievable source of passive income. But there’s more to making bank with a blog than just posting good content.
If you’re looking for an extremely cheap, yet highly scalable way to create a passive income for yourself, you might want to take a moment and consider starting a blog.
Did you know: you can start a blog for as little as a penny for your first month, and just a couple dollars per month thereafter?
Here’s the idea: If you can consistently use your blog and create a lot of value for a lot of people, you can generate an extraordinary amount of passive income. As you post to your blog, more and more, your site will start bringing in traffic whether you put in any additional time or not.
What’s the catch? It takes time to get it rolling. That’s it. The sooner you start, the sooner an income stream can begin to grow.
10. BUY AN EXISTING BLOG:
Thousands of blogs are abandoned by their owners every year. If you can buy blogs with a reasonable amount of web traffic and demonstrated cash flow, it could be a perfect passive income source.
Most blogs employ Google AdSense, which provides a monthly revenue stream based on ads that Google places on the site. There may also be affiliate programs generating additional revenue.
From a financial perspective, blogs usually sell for 24 times their monthly income. So if the site generates $250 a month in income, you can likely buy it for no more than $6,000. Translation: a $6,000 investment will buy you $3,000 per year in cash flow.
Some sites have good “evergreen content that will continue generating revenue even years after the site has gone silent, so a simple $5,000 investment can net you ongoing passive income.
Bonus tip: If you buy such a site then reinvigorate it with fresh content, you may be able to increase the monthly revenue and sell the site at a later date for substantially more than what you paid for it.
I recommend buying a blog on Flippa. Here are some quick facts on this awesome marketplace:
- Includes everything from small sites to ones that garner millions
- Currently has more than 2,000 web-based businesses for sale
- Based on a bidding system and fulfilled by Flippa Escrow program to ensure your money and business are safely secured.
11. MONETIZE YOUR BLOG:
Whether you start your own blog or buy a pre-existing one, choosing to affiliatize it is a passive income technique that will serve you well. You can sign up to promote certain products or services on your site, for which you will be paid a flat fee or a percentage of the amount of the sale.
12. CREATE AN ONLINE COURSE OR GUIDE:
Why not create an online course based on your passion?
What do you put in your online course? Good question. You can add:
- video lessons
- checklists for completing steps you recommend in your video lessons
- small e-books to supplement the lessons
- audio files for people listening while traveling
- informative interviews with like-minded experts
- and a whole bunch more!
Pro Tip: Create several packages at different price points. Some people want everything, so you can include ‘the works’ for the highest price point and have two lower price points so you can receive the largest possible volume of orders.
13. SHOP, SEARCH AND PLAY ONLINE
14. USE CASHBACK CREDIT CARDS:
If you’re already using credit for some of your purchases, pursuing credit card rewards is an absolute no-brainer. Most top rewards cards let you earn anywhere from 1 to 5 percent back with almost no effort on your part!
15. GET PAID TO SNOOZE WITH SLEEP STUDIES:
I’m not even kidding. If you’re in decent health, catch plenty of Zzz’s, and are in an area where a sleep study is being conducted, you could make the most passive income of all.
If you qualify, you could make thousands of dollars in one study. Once accepted, you’ll probably have to undergo a physical, alongside an exam from a psychologist to ensure you’re up to the task. Did I mention you get paid every step of the way?
Keep in mind, though, that these studies have their own challenges, like cutting you off from media sources and your social life and requiring you to be watched and studied for the duration of the experiment.
You might also be asked to sleep in potentially uncomfortable positions for an extended period of time. But the pay is impressive. For sleep studies and other medical and psychological studies, search ClinicalTrials.gov and filter results based on your location, age, and other factors.
16. ADVERTISE WITH YOUR CAR
17. RENT YOUR CAR:
You can keep a driver who will drives your car in weekends or in your free time. Or you can buy a car specially for rent purpose. You can also rent you car on zoomcar or any other rental site.
18. BECOME A RIDESHARE DRIVER:
While it isn’t completely passive, rideshare driving makes the list due to its flexibility. You can make your own schedule with Uber and pick up extra income by driving others around when you are already out and about anyway! There’s no productivity level you have to reach with Uber or Ola; you call the shots.
19. BECOME A SILENT PARTNER:
Do you know of a successful business that needs capital for expansion? If so, you can become a small-time angel investor. Rather than offering a loan to a business owner like a peer to peer lender, you can treat this as a business opportunity and take an equity position in the business.
The business owner will handle the day-to-day operations while you act as a silent partner who also participates in the profits.
You can be an angel investor to one of over 90,000 companies, meaning you give money to startups in need of traction in exchange for equity.
20. BUY AN EXISTING BUSINESS:
Sometimes you can buy a flourishing business and profit from it with little effort. The key is searching out businesses which require little hands-on activity. For instance, consider the idea above of buying a blog.
Say you buy a popular website that has been monetized with affiliates. Even if you never post another piece of content to it and leave the posts there as is, it will still make you passive income.But if really want to make money on the business you purchase, you will make improvements to it. To do so passively, you need to outsource the work.
21. OUTSOURCE YOUR BUSINESS:
Outsourcing will free up your time so you can focus on other tasks that will result in more income. If you don’t want to hire employees, consider hiring freelancers who work as contract laborers. Look for freelancers with a strong work ethic who provide quality results.
As long as the main product or service isn’t something only you can do, you can transform your business into a passive moneymaker.
Here are the companies I recommend starting with:
- CloudPeeps: CloudPeeps does an excellent job matching business in need with skilled, vetted freelancers who can manage everything from PR and marketing to web development and administrative tasks.
- Fiverr: Fiverr has it all. Much like CloudPeeps, it supplies hand-picked freelancers for all of your business needs.
- Guru: Guru offers similar services to Fiverr and CloudPeeps but emphasizes their flexible payment options, like hourly pay, recurring payments, payment by milestones, and payment by the project.
- PeoplePerHour: With an advanced AI system that matches your project needs to the perfect freelancer and features on Forbes, CNBC, and BBC, PeoplePerHour offers a legitimate pool of talented artists to outsource to.
- Upwork: Like the other freelancing networks, Upwork pairs you with freelancers in several sectors and boasts hires by companies like Microsoft, with short-term, full time, and recurring options.
- Freelancer.com: Freelancer is the one of the oldest freelance sites.Freelancer has it all. Much like fivrr, it supplies hand-picked freelancers for all of your business needs.
22. AFFILIATE MARKETING:
This is the one of the best source of passive incomes. All you have to do is to share the links on your social medias (don't spam). You can also share the links in your blog or website. When someone will buy from your link the companies will give you a percentage of commission of per sales.
Example: Amazon affiliate programme, Host Gator, Flipkart, Make My Trip etc.
23. YOUTUBE:
Youtube is also the best passive income source. All you have to do is to make videos. You will earn from the ads.
24. MAKE APPS, WEBSITES AND SELL IT.
25. DOMAIN BUYING & SELLING:
Yes you can also earn from it. All you have to do is to buy any existing domain which will expire in few times and sale it. But choose the domain name very carefully before buying.
You can join the auction of any domain hosting site like Godaddy.
26. MONETIZE YOUR APPS & WEBSITE
27. WRITE A BOOK:
Book is our one of the best friends. As it gives you knowledge it can also gives you money.
28. ADSENSE:
Make your website, blog or app/s adsense approved which can give you a hefty money in future.
29. MAKE A BUSINESS MODEL:
The only difference between a businessman and an entrepreneur is BUSINESS MODEL. Businessman works daily to earn money but an entrepreneur only make a business model which works as source of passive income in long run.
30. AMAZON FLEX:
Amazon might have just the gig for you. The company is hiring drivers to deliver packages as part of its new Amazon Flex program, which lets people order and receive items from Prime Now within an hour. As long as you hit that delivery window and have a car and smartphone, they'll pay you 120/- to 140/- an hour. Though this service is available in limited cities only. If you are from that cities you can enroll yourself under this programme. Check amazon site for more info.Though it is not a passive income source. But you can do it as a part time.
31. EARN MONEY BY PLAYING GAMES
CONCLUSION:
Passive income can work for you, regardless of if you have millions of dollars to invest and no time to spare, or $0, ample free time, and a spark of ingenuity. While they might take some funding and fortitude to get started, the moneymakers on this list will continue to earn you money long after you’ve put in the work.
So look at what your working with: establish your financial goals and decide how much time, effort, and money you’re willing to put into your venture.Whether you choose to invest, buy a business, outsource your own, or get paid for your daily routine, you can prosper from passive income. Read more about passive income: Rich Dad Poor Dad
What are you waiting for? Plant the seeds today with one of the ideas on the list.
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