With the right approach to business, passive income can be the best way to gain financial independence, since direct participation is not required to receive it.
You can do anything and get paid all the time – isn t it attractive? In this article, we have collected for you all the best, proven and reliable ways to create passive income from scratch.
The content of the article:
- What is passive income
- The main risks
- We open a deposit in the bank
- We invest in securities
- We invest in mutual funds
- We rent real estate
- We invest in real estate
- We rent movable property
- We create a work of art
- Obtaining a patent for an invention
- We buy good assets
What is passive income
Passive income – This a type of income that does not require time or effort, but requires the presence of any valuable assets. The disposal of these assets is profitable. There are four main types of such income:
- investment (dividends from financial investments, rent, profit from business in management);
- intellectual (royalties for works of art, royalties for the use of proprietary technology or product);
- legal (subsidies, pensions, scholarships, various benefits);
- marketing (profit from the use of your name, image and other personal information by a third-party company, profit from network marketing, brand).
In addition, active income can become passive over time.
For instance, if you create your own business, and after a while transfer it to the management of a company, or keep a part of the company s shares, but in fact you will not participate in its further fate.
Bill Gates did it: Although he holds the post of chairman of the board of directors of Microsoft, this position is purely formal.
The only thing that really ties Gates to the company is his 8.7 percent stake, which makes him the largest shareholder in Microsoft and one of the richest people in the world.
The main risks
You may have one job, maybe two or even three, but your possibilities and your time are not limitless… At the same time, the number of sources of passive income is practically unlimited.
Passive income is associated with certain risks, and in order to protect yourself from them, you need to use several sources of profit at once. Do you know the saying: “Don t put all your eggs in one basket”? Here the principle is the same – use different sources of income, and the more you have, the safer for capital as a whole.
We open a deposit in the bank
Bank deposit – one of the most reliable options, but far from the most profitable… You will receive a stable income, but the interest on deposits, as a rule, barely covers inflation.
Therefore, if you are not afraid of risks, it is better to choose something else.
We invest in securities
A good investment can make you a fortune. but you need to invest wisely – the risks are very high.
After investing money, you can either receive dividends, that is, a percentage of the profits earned by the company whose shares you purchased, or wait until the shares go up and sell them.
The best option in this case is to give the money to the management of a professional broker., which invests them in the most stable stocks, growing in price, and can guarantee you a good profit, while minimizing the risks.
We invest in mutual funds
If you do not have a lot of capital, then mutual funds can be a good option for you.
In fact, this is the same investment in securities: the funds of several investors are used to buy securities, after which the income from these securities (dividends or profit from the sale) is distributed among the shareholders in accordance with their participation.
We rent real estate
If you have an unnecessary apartment, house, garage or other object, you can rent it out and earn income.
Annual earnings in this case will be about 10-15 percent of the cost of the object…
And even if you buy a new apartment and rent it out, you can return the full cost (including the cost of repairs and furnishings) of this apartment only after ten years.
We invest in real estate
This type of investment involves the purchase of a cheap object with its subsequent resale.
For example, you can buy an apartment from a developer at the excavation stage, and when the house is fully built (in 6-18 months), sell it for 25-50 percent more.
You can earn even more on commercial real estate, but in this case the investments will be higher, and you will have to wait longer – if an apartment is bought from you even in an almost unoccupied building, then the commercial space in the same building for a good price can be sold only if there is a large number of tenants.
We rent movable property
If you think that only real estate can be rented out, then you are wrong: movable property, for example, cars, is also great for this.
Small trucks are in the greatest demand: Gazelles, Sables and others.
We create a work of art
If you have ideas for your own romance – implement them. If you are not devoid of talent, your work will surely find its readers, and you will receive royalties from book sales.
By the way, the state Joanne Rowling, who wrote Harry Potter, is almost $ 5 billion…
Obtaining a patent for an invention
If you know how to create a unique device or unit, or own an exclusive technology – patent your development…
In the future, you can demand deductions from everyone who uses it.
We buy good assets
While someone is thinking how to create passive income from scratch, others are thinking, how to buy a ready-made source of such earnings…
It can be someone else s patents, copyrighted works and even brands – the rights to any source of passive income created by someone else can be redeemed, and the copyright holder will receive the income.
As you can see, it is not at all difficult to provide yourself with passive income. And this is the best path to financial freedom. After all, whatever you do, you will always have money.