Passive income refers to earning an income that requires little to no effort to earn and maintain which is also known as progressive income. There are many ways out there you can use to earn progressive income.
Some of the methods include rental properties, business partnerships, and investment portfolios, which can provide a constant flow of income which requires little or no effort input, since you may not be actively involved in the operation.
Why Do People Want To Build Passive Income?
During an economic downturn, unexpected situations may happen, where many people have lost their jobs and income.
For most investors, the extra money earned is similar to a safety net that protects them from a complete loss of income and allows them to save up for retirement without the need to resign from their regular jobs.
How Does Passive Income Benefit Investors In Earning Extra Money?
In relation to the quote made by Warren Buffett, it is beneficial for everyone to earn extra money, rather than just relying on a paycheck. While you invest with the hope of earning through long-term progressive income, be mindful that there will be risks involved.
Despite the chances of failure, many people are still interested in generating progressive income. So, here are some benefits commonly enjoyed by passive income earners.
A. Passive Income Reduces Anxiety From Financial Stress
The overwhelming fear from the incapability to support your existing standard of living builds up pressure and anxiety. As mentioned, one of the main reasons why many people want to earn a progressive income is to strengthen their financial stability.
It protects investors from doomsday scenarios such as losing their stable income. Concurrently, the earnings gained tends to lighten up your financial burden, and you need not be troubled to make ends meet. In turn, you will have more time to spare on building other money-making streams.
B. Passive Income Increases Financial Stability and Growth
Having multiple progressive income streams does allow you to plan your financial goals in advance since the extra money gained will accumulate automatically.
Slowly, you can earn extra money without actively monitoring your income sources. With the saved up time, you can focus on your personal financial growth by searching for new ways such as investment and renting your personal belongings.
C. Passive Income Provides Flexibility In Pursuing Your Interests
In life, there are many hobbies such as music and art that you may want to pursue. But, due to commitments from work, you do not have extra time to do so. Thus, by setting up a few progressive streams, you will have the flexibility to pursue your interest as income stabilizes. So, what are some simple passive income ideas you can adopt to earn extra money?
Earn Passive Income From Investments
Investment types of money-making ideas may require some funding to kick start the journey in before you can start earning extra money. Despite the fact that there is an initial capital criterion, investment is one of the most accessible forms of money making idea anyone can start building.
Moreover, there are many Robo-advisor investment apps nowadays that allow you to start with as little as one. Thus, it is attainable for investors with lower financial capabilities, such as students.
1. Invest with a Robo-Advisor App
Just like the majority of us, you may have minimal investing knowledge or had no idea how dividend stocks, cryptocurrencies, or other financial instruments work. It’s alright, as you can invest in the stock market through Robo-Advisor apps that allow you to mimic the investment strategy of top traders if you are unsure of which instrument to pick on.
In many of the online marketplace, you can discover different Robo-Advisor apps with low investment fees. Many of the apps will rebalance your finance portfolio by recommending investment opportunities based on your risk profile, to maximize your earnings.
2. Invest in Dividend Stocks
On the other hand, you could be someone who is adventurous and may want to invest without the assistance of an automatic robot. Usually, when you invest in dividend stocks, you will either purchase the stock of a listed company or through a mutual fund.
You will only earn dividends when the company distributes its profits, your dividend earnings depend on the number of stocks you own and how much dividend is distributed by the company. At times, other than the usual cash rewards, you may also receive shares of the company.
3. Loan Your Money Through Peer-to-Peer Lending (P2P)
A peer-to-peer (P2P) loan is a personal loan made between you and a borrower, facilitated through a third-party intermediary such as Funding Societies, Minterest, Prosper or LendingClub.
4. Owning Royalties
The convenience of accessing the Internet has opened up opportunities for everyone to earn extra money online. As mentioned, earning extra money through investments is just one of the types available for you to adopt. Maybe you are more conservative and would like to reduce losses while building your progressive income streams.
Well, there are tons of other ways you can earn income online by generating self-content via blogs or social media. Owning royalties can be one of the ideas to earn passive income by letting others use creative works done by you. For example: Music and Stock Photos.
5. Making YouTube Videos
Making YouTube videos is one of the trendier ways to earn extra money online and absolutely the dreams of youngsters too. Within these few years, there are tons of people entering into this new industry and fortunately, a minority of YouTubers have turned into millionaires in a short span of time.
You have to be mindful that running advertisements through Adsense is one of the most ordinary ways many creators make progressive income from. In actual fact, the creators’ passive income comes from diversified sources such as affiliate marketing, selling digital products and services since money earned via advertising clicks may vary based on advertisers’ bidding costs.
6. Writing Blog Articles
Writing blog articles is one of the most popular ideas many authors who earned side income will introduce to their readers since it is easily attainable. To start, you only need a domain and a passion for sharing stories or knowledge.
These days, writers can also tap on self-publishing writing platforms such as Medium and WordPress, which allows writers to upload their blog articles freely. Although this idea is achievable, you still have to be mindful that it still requires a significant amount of effort to generate a large number of blog articles, without making any extra money online from the first day of publishing.
7. Teaching Online Courses
By 2021, the online learning industry will amount to $240 billion, which means that many people will consider studying online to improve their skills regularly. In a common perspective, many of us think that we must be an expert in certain languages to conduct an online class.
Well, that’s not true. Nowadays, people are approaching online learning classes to learn new hobbies, including music, photography, and cooking. Teaching online courses is a good idea to earn passive income online flexibly.
8. Renting Out Your Extra Room
Are you living in a house or an apartment with a spare room? Well, you may want to rent it out and generate some passive income, as it might be the most convenient way for you to earn money from the things you own.
Basically, you can decide when you want to rent your space according to your schedule. What’s better? If the demand in your area increases, prices automatically increase. Isn’t that quite handy? Sites like Airbnb will help find your customers for you. So, all you need to do is wait for someone to contact you.
9. Renting Out Your Car
Another possibility to earn extra money other than rental would be renting out your car. If you own a car but you’re not a frequent user, you can rent it out through sites like getaround. It’s just like the transportation version of Airbnb.
While renting out your car, there will be a $1,000,000 worth of insurance to keep you protected. Additionally to that, it will be a great way to get your idle car running as well. To anyone interested to do this, remember, these sites give reviews or ratings. So, if you decide to rent your car, go ahead and provide the best possible service you can offer.
10. Earn through Annual Interests from Fixed Deposit
Instead of letting your spare cash sitting around in your savings account, why not put it in a fixed deposit account to earn interest? A fixed deposit account allows users to earn a higher interest rate by the end of a stipulated period, as compared to the ordinary savings account. You can still choose to withdraw the capital before the fixed deposit matures, it’s just that you may earn lesser interest as to the amount agreed initially.
11. Obtain Cashback via Credit Cards
What if we said that you could get money back from shopping and eating? Well, there are some credit card companies and other organisations like Ebates and Shopback, who give you cashback for using their credit cards or shopping through them.
So what happens is, you will visit companies that have promotions, pay the bills with your credit cards and get a percentage of your spending as a cashback return. As you could see, this is one of the easiest ways to make passive income. So, don’t forget to check whether your credit card or the stores you buy from offer any cashback for your spending.
Can People Really Earn Passive Income?
There is a myth saying that in order to be a millionaire, you have to build at least 7 progressive income streams. However, if you can’t meet the benchmark, it’s alright as long as your current investments can generate extra money that surpasses your monthly expenses.
Earning passive income does sound easy now but it still requires a tremendous amount of time, effort, and good personal finance habits. We hope that this article gives you some simple money-making ideas on how you can earn extra money.
We would like to emphasize that earning money through progressive income doesn’t mean you can stop making a living. We wish all the best in building your own income streams and obtaining financial freedom. Good luck!
