Best Ideas for Passive Income

This article is a good reading about Passive Income, what is passive income, best ideas for earning passive income

This article also provide some light to readers who at very young age thinks that we should have ancestor property or wealth which is received from our earlier generations or what can be done to have a financial freedom early in life.

Is this possible for everyone to have ancestor wealth, do all are so much lucky ? – Absolutely not !

Then the question strikes is, “what actions do past generations have taken to have this kind of royalty income for self and generations to come.

The only answer to this is – Investing early at the right time, in the right Assets and not in liabilities. Here comes the concept of passive income.

Table of Contents

What is passive income in simple terms ?

              Passive income is the income generated from the sources where an individual in not involved actively. Some examples can be dividends, interests, Rental income, Royalties etc. We will go in details about different passive Incomes options as we further in this article.

Why Passive income is important ?

Below are Top 3 reasons why passive income is important

1. Low Dependency on Weekly or Monthly Paycheck

With digitalization moving to sky day by day, more potential opportunities available other than regular 9 to 5 job. If you are still in paycheck to paycheck then it is addiction. Passive income is an opportunity to have less dependency on Paycheck as well as stop doing the same work which you really don’t like.

2. You are open to practice your hobbies and the things that you are passionate about.

You must never leave your regular job till the time you have consistent passive income coming in. Once you have a consistent passive income source, you are free to practise what you like to do. It is universally accepted that once you do what you like there are high chance to have a better financial and metal wellbeing.

3. Less stress happy Mental health

Majority of people have stress due to reasons in their life – Health and wealth. Passive income improves financial stability, which indeed reduces stress due to finance issues

How to make passive income ?

The ultimate goal of having a passive income is to earn income when you are not actively involved. That means, even income is earned when you are sleeping. This is certainly not easy and can be achieved with a click, consistent efforts in right path at early setup process along with your active work can make this a successful mission.

Let us be clear there nothing called as Risk Free, all come with a risk. Hence how much risk an individual takes is his own choice, but taking calculated risk is the best choice.

Top categories to create passive income is – Investing,  Building Assets and earning by selling, renting or sharing those assets. Below passive income examples will give an overview on most profitable Top passive income Ideas.

1. Investing Stocks which give dividends.

Investing Dividend stock can be a best option for income on regular basis. Building a portfolio of dividend stock will take time and patience. Hence learning to identify dividend long term investing stock, analysis or evaluating those to identify the best suiting your risk appetite and how much % of your investment should go in dividend stock. Diversification of investment is key keep the risk low. Example – Companies like Universal Corp (approx. 5%), Walgreen Boot Alliance (Approx 4%). A good stock screener and learning company fundamentals can be really help to succeed. Beginner guide for stock investing for reference https://www.readingcafeusa.com/beginner-guide-for-stock-investing/#more-2500

2. Real Estate

Real Estate is one of the oldest method to invest and earn a passive income by renting it out. There are two benefits in this annual appreciation of the property value and collect month on month rent as passive income. But it also has a little drawback when it comes to actual returns in terms of income received and efforts spent. Renting business comes with maintenance and repair cost, property management fees etc, which impact or reduce the earnings in Actual. Hence there are other alternative for real estate investing like REIT ( Real Estate Investment trust ).

There are platforms like Fundraise in which you can invest your funds considering the prospective location. This small portion will be invested by REIT in property selected and you will collect portion of earnings as dividends. Please mind that this too have a drawback of higher tax rate when compared against other investments as stock. Renting small part of your apartment or house using Airbnb, this option has less effort required but have risk of staying with strangers and can get careless tenants who can be treat to property and your security.

3. Investing in Domain

Common method of stock investing – Buy low sell high, this method or principle applies when it comes to domain investing. It is a good option to diversify investment, but this too comes with a risk. This is not similar to one time real estate investment but like Rinse and repeat. Domain investor generally build an inventory of good domain names as per the pre requisite criteria set and then sell those to other investors or users in need at a higher cost.

4. Getting Digital

There can be multiple option here – Example: Youtube videos, Blogging, Affiliate marketing, Online course selling on personal websites or elearning platforms like Udemy etc, writing an ebook, Creating App for google play or apple play store, writing post for clients.

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