What is passive income? How passive can income ideas change your life? Today, you will get an answer to these questions in this guide.
For most people, their biggest dream is to have steady streams of income without lifting a finger. Even you too, that’s why you are reading this. You must have heard of passive income? Probably. Let me guess, you do think it’s about making money without doing anything at all? Cool! But do you honestly think you can make money without doing “anything” at all? Don’t get confused, passive income is passive because you don’t have to work your regular 9:00am-5:00pm job to get it. This guide contains a summary of what you should know about this income. Read on to find out more! .
What is Passive Income?
Financial strategist and CEO of The Business Society, Melissa Houston, described passive income as a regular stream of income generated without putting in much effort. “It’s more like making your money work for you even while you are asleep,” she says. You just invest your time and money, then watch it generate income for you.
Importance of Passive Income
An investor from Thousand Oaks, California, Eric Martel, was happy to share with us some of the benefits he enjoys from passive income. Here are four of them:
It’s an Alternative to 9:00am to 5:00pm Cliché
“After the thrill of working wear off, all that’s left is being stuck doing the same things over and over. Working eight hours every day for five days round the clock was a typical cliché and I needed an alternative” he says. Passive income is an alternative to your regular job. It may take longer to build passive income, but eventually, it may pay more, and you may be able to leave your current job.
More Time for Hobbies to Rediscover Your Passion
When you start to make passive income, you will have more time to add fun to your life, Eric said. The space your active income job won’t allow you, passive income will allow. You get to do the things you love with the free time you have on your hands. “For me, I love to sit on the patio and sketch anything that comes to mind. Even though I’m not good at it, I still create time to do it” he said.
Huge Stress Relieve
Another reason why you need to build passive income is to relieve yourself of stress – both mental and physical stress. “We all go through physical stress every day from rushing off to work to meeting up with the day’s tasks, to coming back home to care for the family. All of these can be exhausting” he said. When you start to make such an income, you’d realize that you have more control over your daily schedule.
Generate More Money for Other Investments
You get funds for other investments when you generate passive income, he said. Passive income will give you a steady inflow of money to increase your savings especially if you still have an active job. These additional savings can be channeled into other income-generating ventures. That way, you get to widen your income from streams to probably a “river”.
How to Make Passive Income/Passive Income Ideas
There are several ways of making money without actively working. Eric and Melissa were willing to share some of those ideas.
Rent Out Your Space or Car
Unused or extra spaces like your garage or spare bedroom can earn you money when you rent it out for a reasonable price, Melissa advised. You can also rent out your extra car. There are car rental websites, where you can register to put your car for rent. However, she said that before doing that, you need to review your auto insurance details to see what it doesn’t cover.
Sell Your Knowledge
Melissa’s biggest passive income idea was to sell her knowledge. She said, “We all know, knowledge is power and people are willing to pay for it. You can write and an eBook and self-publish it on different platforms to earn royalty”. You can also sell online courses. You can make a passive income from your active job when you create an online course taking ideas from it. She also gave an example of how she started her online financial strategy training, taking ideas from her active job.
Invest in Real Estate
Both Eric and Melissa agree that investing in real estate is the most popular way to generate passive income. “Although it requires huge investments, the return is also huge,” Eric said. “It also doesn’t take long to start earning from it and I must say, it is my biggest investment”, he also said.
Another way to generate such an income is by selling online. You don’t need to own the product you sell. Just contact manufactures or store owners to sell for them.
For affiliate marketing, you need to have an online platform with high organic traffic. Make use of this organic traffic to your advantage and market products. On each sale made through your platform, you earn money.
Eric’s next biggest advice was to invest in bonds. “Next to my real estate investment, I also have bonds I purchased from AB Corporate income shares, Delaware ivy, and BMO Corporate income funds”, he said. He explained how buying bonds work. He said bonds are a form of loan investors give to companies. He said the investors can either hold the bond till the due date to collect their capital gain or sell it for a higher price to another investor.
One way to save for rainy days is to build passive income. Passive income is seen as an investment. You can depend on it solely or have it as an alternative source of income. The good news is with passive income, there are limited probabilities of not being able to support yourself or your family. “You should note that like every income, passive income is also taxable, but it is based on certain criteria” Melissa advised.
We hope you got your answer as what is passive income, so try out one or more of the above-mentioned passive income ideas to have steady income streams.