Everyone wishes to earn and become rich but only few know how they can actually become rich. The ultimate secret for having passive income is to diversify the sources. Multiple sources of money are the ultimate secret that could help you in having a huge bank balance. This holds very true for lots of millionaires across the globe. Just take a look at the life of a millionaire and you will surely notice they have lots of money landing up in their bank account from lots of different routes.
This kind of financial freedom is something which any one would desire.
Now it’s time to know how they get so much of money (and of course it cannot come from a regular full time job) become rich even while you sleep. Here is how:
Imagine that you wake up and find a message from your bank, saying you have hundreds or thousands of dollars credited into your bank. If this is what you want- making money while you sleep or do anything else, then it all comes to these two magical words: “Passive Income”.
Now, you may have heard about this before and you will keep hearing because those who are rich or are willing to help others become rich too will always share about the different means to earn passive income.
Passive income is the money which you earn without doing something actively. This also means you do not have to constantly exchange your precious time and energy for getting some dollars.
So passive income is all about gaining more without putting efforts constantly 24 into 7.
But how to generate income without being actively involved?
There are various ways which can help you to create lots of passive income streams. I will describe 7 ways from which one can make passive income.
- Profit Earning
- Earning from other businesses (Affiliate Marketing)
- Trading
- Lending to financial institutions
- Royalty Income
- Rental Income
- Capital Gains
A person creates something; find someone who needs it and make money by selling it. This is how you earn through profits. You create money by exchanging it for something you make or something you do. This is the ideal method of earning constantly if you create or do something that is demanded by others.
In other words, this is exactly what having a great business means. Businesses earn profit and that’s how they sustain and grow eventually. If you can create a business, whether on a large or small scale, and work on a strategy depending upon your product or service, you can earn huge profits.
When your products or services sell on autopilot, that’s when you start making more money doing absolutely nothing but managing the business.
Earning from other businesses is all about doing affiliate sales. This can be done online or offline. You have to promote the products of others and if someone buys it, you earn a commission.
This is how most people like to make money as you don’t have to invest time, effort or money in creating your own product. All you have to do is find people and recommend them to buy something.
This is the prime source of income for most bloggers and YouTubers. If you want to start earning through this source, you must make sure to recommend great products only, which you would personally like to use.
Several people are scared when they hear about making money from share market. It’s believed that only losses happen when you risk your money in trading or buying stocks.
It’s not true. Trading is difficult thing to master and most people do not do it patiently. Their emotions make them bear lost of losses and they decide to never trade again. But if you can master trading stocks- believe me it’s going to become one of your favorite sources to earn lots and lots of money.
When you lend money to the banks or financial institutes, you earn interest on such money. You don’t have to actively do anything in this and this is simply a onetime action to make money.
The interest rate always varies and differs upon the bank and the income depends on how much you lend and for what duration of time. There is simply no active involvement required from your side in such passive income streams.
This may sound similar to affiliate income but it’s actually different. To earn royalty income, you lend your product, process or even ideas to someone so that they can use it to earn.
Once someone uses your product or idea, they will pay you commission for it. An example of this is to sell photos which you have clicked and earn some royalty.
You sell your photos to interested buyers and in exchange they pay your royalty. This is truly passive income because you create a photo once, and it could be purchased or used by multiple people who will give you royalty.
Among the most popular and traditionally used methods to make money is renting things. Renting assets is the best way to earn constantly without putting any efforts. You may sometimes have to spend money to maintain such assets that you rent out, but it’s just like an investment which will give you more income in the years to come.
Hundreds of people require rental spaces and if you find someone who is actually interested and wants your property on the rental basis you have found yourself a great source of income.
The best ideas for this include renting your car or room, office space, etc.
This kind of income can be earned by selling an asset that you own. When you earn something by selling an asset, you can make huge capital gains. This may not sound totally passive but I’ll give you an example.
Suppose you bought property in outskirts of a city and you haven’t used it in years. The price of this property increases through the years and now you decide to sell it. Practically you have done nothing actively and just earned a huge amount from selling it so this is another kind of passive income source.
It’s up to you whether you want to rely upon one of these sources, some of them or all of them. If you already have an asset you can give it on lease basis and start earning. It’s best to depend on different income sources instead of one.
Along with these, you can also have an active source of income like having a day job or full time job. Most people work in a regular job until they can rely on other sources to earn income regularly.
So once you start getting income from different sources, you can increase it further by investing in different areas.
