Do you want your money to roll in even when you are sleeping?
It is time to put your thoughts on “passive income”, a popular phrase in the finance domain. The Covid-19 pandemic has further emphasized its importance and need. Passive income is a secondary income that requires little effort, time and money to invest and in turn, yield returns exceeding your principal amount remarkably. How great is that, right!
Let us dig into the best 5 passive income ideas and sources.
- Mutual funds/Fixed Deposits/Bonds
These are the basic investment types that many are aware of and are even active in it.
- Fixed deposits have decent interest rates but you get them only after the deposit time. Non-cumulative fixed deposits have a lower interest rate but you will have regular periodic interest payouts. Opening these deposits is quite easy whether you go to the bank in person or pay online.
- Mutual funds- The dividend options in these are a great source of passive income. Though the dividend profits are shared among the investors, you will get your profit regularly, say quarterly or semi-annually, or annually. One should scrutinize smartly while selecting the type of mutual fund you are investing in.
- ETFs –Exchange-traded funds are an interesting type of managed fund comprising stocks, bonds, and commodities trading similar to stocks. They are even easy to understand and inexpensive with good returns.
- Bonds- Through bonds, you are paying money to a government or a company and in turn, you will receive regular coupons/interests. These bonds are less risky than shares/property and provide you with regular income.
These can serve as a potent type of passive income with their respective tax deductions. Shares and stocks are stable when chosen long-term with low risks rather than high-risk investments.
- Property Investment/Renting
The most preferred all-time favourite and profitable way for a steady passive income idea is renting out your property. People with diverse portfolio have higher benefits. Cities in Australia would cost a hefty amount for rent along with the respective taxes. Your passive income depends upon the property’s location, infrastructure, and mainly its connectivity. A property investment consultant can give you a fair idea about the best deals.
- Freestanding property renting- Property can either be commercial or housing with good maintenance and repairs.
- Strata property renting- Renting an apartment or unit or townhouse. If you have a loan on it then your passive income will be less until you repay the loan.
- Renting your holiday home is never out of trend. Though it might cost some management costs, owning and renting a holiday home always provides you with a fruitful passive income during the peak season.
- Ok, I can see you asking what to do if I had only one home and no other properties. Do not worry, you can always rent a room or a car space in your home.
- Affiliate Marketing
This is one of the challenging passive income sources in this digitalized world. For this, you need to sign an affiliate program and receive a special link that you can utilize in your blogs and social platforms. If your readers purchase products through your link, you will get a commission accordingly. Creating industry demanding blogs, and promoting them via emails and social media accounts will drive numerous traffic leading to a generous amount of income.
You can turn your passion into income through various domains. This development of the gig economy has given rise to many talented freelancers like content writers/creators, course writers, YouTube video creators, influencers, and bloggers. Even big companies and corporations are favouring these freelancers for their passionate work.
Creating worksheets, courses, and books and uploading them or publishing them on famous websites are also ideas to make your second income. People who require your creations will pay and download them.
- Selling photography online
Selling your stunning photographs is the most interesting source of passive income. First, you need to be approved by the respective platforms and then you license your photographs so that you can charge the person downloading it, or else the platform pays you whenever your photographs are being used. You can collaborate and work with famous organizations like Alamy, shutterstock, getty images, stocksy, and adobe.
Passive income takes time to grow your investments. However, consistency and dedication are the key. There are numerous investment courses available on the net to gain extra knowledge. Select your best investment model according to your needs and requirements. Perspective, self-awareness, and understanding can be built only on sound education.
“Some people want it to happen, some wish it would happen, others make it happen”-Michael Jordan
It is never too late to invest in your passive income today!!