Passive Income is defined as income that you have to put in little or no effort for. Let’s dig a little deeper into what passive income means in simple terms and talk about all the different ways to generate it.
List of Passive Income ideas
There are many types of passive income. Given below are some of the best passive income ideas:
Idea 1: Rental Income
Owning land, property or even storage space can be a great way of generating passive income. Many people become landlords. This means you work hard to collect whatever money is required to pay for your first rental property.
This is a difficult move in today’s economic situation. More importantly, there is very little liquidity in real estate. It isn’t the easiest or the safest path to passive income.
Idea 2: Mutual Funds
Investing in mutual funds is one of the best ways to generate passive income. You can choose mutual funds based on your risk appetite and timeframe.
This means you not only get to create wealth passively you also get to choose how much risk you are willing to take. If you have a trained professional to guide you through this process you can build the perfect portfolio for your financial goals.
Idea 3: Stock Investments
Investing in stocks is another brilliant way of creating passive income. This is, of course, something that requires a certain level of expertise and knowledge. While stocks can potentially generate a lot of passive income, it is best to invest in stocks under the guidance of an expert advisor.
Idea 4: Peer to Peer Lending
P2P lending is basically an alternative investment path. You will essentially be lending money to borrowers and earn interest on top of it. It is best to invest in P2P lending through an established mediator. This way you invest money but reduce the risk associated with P2P lending by a huge margin.
Idea 5: Asset Leasing
Asset leasing allows you to earn passive income. You can become an investor who leases out tangible assets like cars, furniture, equipment, or intangible assets like copyrights.
As a lessor, you’ll receive an interest (passive income) along with the principal amount from the lessee for the duration of the lease.
Idea 6: Bank Fixed Deposit
This is one of the oldest ways of creating passive income. The interest you earn from a Bank FD is low. However, people who are extremely risk-averse tend to gravitate towards bank FDs due to the low-risk factor.
If you’re willing to expand your horizons then you can invest in a liquid fund which is the type of mutual fund that offers high liquidity – this means your money can be taken in when you need it. Unlike Fixed Deposits, liquid funds do not have long lock-in periods.
See if any of these ideas work for you and start earning some extra cash every month!