Passive income is money that takes a small effort to make and keep and that takes a relatively long time to produce and keep as well. It’s also known as passive revenue when the person who earns it does not actively expend any effort to increase the income. Examples of passive income are any income from any business activities where the person doesn’t materially participate and rental income. Examples include: dividends, interest, rent and any income from investments and insurance. Passive income can be generated by many different sources, including stocks, bonds, options, insurance and real estate.
The easiest source of passive income is investing. Passive income can be obtained by investing for retirement, but the amount you can make with this method will be less than if you employed your full-time salary to invest. If you want to create a passive income retirement plan, start slowly by saving only enough for a down payment on a condominium (with a 20% down payment) and then build your investment portfolio over time. Investing your entire net worth, after a while, can become quite lucrative, if you have the discipline to stick with it.
Another option for investing for retirement is to build passive income streams by purchasing mutual funds or other types of investment securities. These can either be managed by a professional or done on your own. Either way, you’ll want to research the various investment strategies and companies. Find out how much each company’s performance has been in recent years and what its investment policy is. You can also get a handle on the company’s reputation by talking to others who may have used their services in the past.
If your goal is to build passive income through investing, consider investing in the stock market. Popular choices are penny stocks, which can make money provided the company makes money. The key to investing in penny stocks successfully is to make sure you know when to sell and when to buy, and to do so when interest rates are high. Keep in mind that online banks offer some very low interest rates, so they can make for an excellent source of passive income as well. Online banks may be a good place to start, especially if you’re looking for a high return on investment.
Another way to make money online is to focus your efforts on affiliate marketing. Affiliate marketing lets you make money without investing any money at all. You simply choose products that are already selling, find prospects who are interested in those products, and introduce them to the product. Once they make a purchase, you get a percentage of the sale. Since affiliate marketing is based on referral sales, you can pretty much rest assured that you’ll eventually make money. Of course, you’ll need to know how to drive qualified traffic to your site, but once you get that part of the process under your belt, there’s really no way to fail.
One of the best sources of passive income today is through self-charged interest. If you have a particular interest, hobby, or other vocation that lends itself to making a consistent income, you can develop a portfolio of projects and put together a passive income stream by simply spending time focused on it. Self-charged interest allows you to keep your options open, since you never have to commit to anything before getting started. As long as you keep working at your new projects, you’ll gradually build up a portfolio of projects that, while not as financially lucrative as the projects that you’ve worked on in the past, will be far more financially rewarding.
If none of the above sound appealing to you, then there are other passive income options that you can explore. The most popular among these options are things like real estate investing and running a business from home. Real estate investing is a surefire way to develop wealth-building capital, and since it is a business that can continue to flourish even during recessions, it is a good source of long-term income. Likewise, running a business from home allows you to make money even as you get older, and you can keep your portfolio of business ventures growing even as you approach retirement. There are many other ways that you can use passive income to supplement your retirement income; however, you should always start with what you’re absolutely confident about.
As you can see, there are many different ways to build passive income streams, but there’s really no need to think too much about “what” you want to do. What you should focus on is “how” you can get started. Once you have an idea of what you want to do, take action and get started building a real income stream today. There are a number of ways to go about this, but remember that you don’t have to wait for retirement to make money – you can begin building a wealth-building passive income today.