Passive income is a great revenue source because it allows you to add on to your existing salary without putting forth much effort. In the beginning while you are still figuring things out, this kind of revenue stream makes a welcome supplement to your salary or business revenue. Passive income allows you to free up time for yourself and for your family while still enabling you to earn some money to put towards expenses or savings. Given enough time and know-how it is quite possible to quit your regular nine to five job and live off of your passive income. It has the power of helping you realize your dreams of financial and personal freedom.
Most people get confused by the difference between passive and active income. Active income is basically the remuneration that you receive from putting time and effort towards your job or your business if you are self-employed. This could be in the form of your salary, hourly wage, performance bonuses, profit from your business enterprise, and so on and so forth. Passive income, however, is money you earn regularly without putting in so much work. You might need to spend some time with the initial set-up, but once that’s ready, your income should come in at a steady flow.
Here are five examples of the most common passive income streams that people enjoy.
1 Rent from Real Estate Properties
Earning rental fees from real estate properties that you own makes for a steady monthly passive income. Being a landlord does require a substantial initial investment since you do have to purchase property. In some cases, you might even have to build it from the ground up. The great thing about rental income is that as long as you have renters, there will be money flowing in every month. All you do is collect it. From time to time, you might be called for some maintenance issues, but normally they don’t take that much time and effort. Renting out property is a good way to maximizing your investment in real estate. It’s also a good alternative if the real estate market experiences a downturn, and you find yourself unable to sell a property because of the low market value.
Let’s face it the idea of the starving artist is still prevalent in society to this day. Only few creative careers really pay well. Most of the time parents discourage their children from pursuing the arts because some of the time you will struggle to make ends meet. You are encouraged to pursue white collar careers instead. Even though you work a nine-to-five job, you can still nourish your creative soul and still earn from it. Being creative is a good source of passive income. If you like to write, the internet has now made it easier for you to write an eBook and self-publish that book. Budding filmmakers will be able to use various platforms to showcase and sell their work. Photographers can shoot and sell stock photos that people will pay to download. If you are an inventor, you can patent your work and people will pay licensing fees to be able to use your product.
3 Silent Partnership
Sometimes you come across with someone who has a great business idea. All that person needs is an infusion of cash to get things started. If you have some extra cash lying around, you might want to invest in that person or company in exchange for equity in the business. You won’t be involved with the day-to-day responsibilities, but it’s a worthy investment if the company does take off.
4 Dividends from Your Portfolio
Investing in stocks, bonds, and other funds for the long-term can be an additional revenue stream for you and your family. If you have invested wisely, the value per share of your portfolio will rise, allowing you to get much closer to financial freedom.
5 Blogging Revenue
More and more people are turning to the internet for additional income. Blogging allows you to have a creative output and earn some extra cash at the same time. Advertisements placed as banners can earn some extra money as well. It could also net you some sponsorship deals. It could be an avenue for selling a product that you have developed.
When it comes to earning passive income, you have a number of options. Are you currently making money from a passive source? Tell us about it!