You wake up early, eat breakfast hurriedly, and brave the streets and public transportation to get to work…and back. The next day, the cycle repeats itself. You hardly have time for your family, letalone yourself. The question is: has your money started working for you? Have you applied the wealth principle of multiplying your income streams? What are you going to do today to create passive income for yourself? Now is the time to begin if you haven’t already. Here are the top 6 ways you can create passive income (income where you don’t have to swap much of your time to earn it.)
“Man has to go through two phases in life: he works for the money then he makes the money work for him.”
- Make money online.
The world is so much smaller now – thanks to the internet. You must take advantage of the accessibility / connections that the internet provides. And it provides an almost infinite number of ways to create passive income.
Do you have a product or even just an idea? Why not create an e-book and sell it online? Or perhaps start a blog site and market it well. If you consistently put out quality content, your traffic or visitor base will surely increase which will, in turn, attract advertisers.
Do you have a passion? You can make money from it by licensing or syndicating your creative output (e.g. artwork or photos.)
The best thing about making money online is that you can work from home and cut on expenses like transportation, meals, and even clothing. You can work in your pajamas if you like. Your “office mates” won’t mind.
You can also make money online via affiliate marketing or linking with more established online businesses (like Amazon).
The important thing about making money online is that you should keep abreast of marketing automation tools so you don’t have to spend a lot of time in front of your computer.
Not tech-savvy? No problem. Read on.
- Capitalize a business that is already generating income.
Is there a business which you have always wanted to be in but never had the time to start? What you can do is infuse capital on an existing business (along your area of interest) which already has an existing (and growing) client base. You don’t have to actively participate in the business – just be a silent partner. You can actually get in touch with “business” brokers to help you select the business that you like. They act pretty much like real estate or stock brokers.
- Peer-to-peer lending
A fast-growing medium because it offers less hassles than the bank — peer-to-peer lending simply means you are creating a personal loan between you and a borrower through a third party. Passive income is earned via interest payments made on the loans. It bears the risk of default though as the loan is unsecured. However, there are ways by which you can cut that risk (like through diversification and checking the profile of borrowers.)
- Dividend-Paying Stocks and Mutual Funds
Go for high-performing stocks that offer regular dividend pay-outs. This way, you earn not only through dividends but also through capital appreciation. You can also go for preferred stocks which has a bond or debt portion to it. The latter offers less risk and higher dividends.
If you do not have the time to closely monitor the stock market, you can opt for mutual funds and trust that your fund manager will grant you above average returns. Just remember to go for the dividend-yielding funds.
- Real Estate Investment Trusts (REITs)
If you like the concept of dividend pay-outs but in the context of the real estate market then REITs is for you. Think of this like a mutual fund. You are part owner of several properties (though not directly) so you are instantly diversified. It pays higher dividends too compared to stocks and bonds. The real estate market is also less volatile than the stock market so you are assured of protection from inflation.
But the question is why would you not want to directly own real estate? This leads us to the top of our list which is…
- Real Estate | Rental Property
Rental Property is a source of passive income that has withstood the test of time, invincible even. Remember that shelter is one of man’s basic needs. And few people can afford to buy property of their own so there will always be a market for renting. The good thing is that there are systems in place now (like specializing in turnkey investments) so you don’t have to get your hands dirty especially if real estate is not your cup of tea.
Multiplying your income streams is a lot like diversifying your portfolio too. You cannot solely depend on one because if that single source of income runs out, what will you do?
If you focus your time today, you can start to create passive income. This way you won’t have to wait until you’re 60 to retire. Now is the time to take that first bold step towards financial freedom.
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