What is Passive Income?
Passive income is usually earned through traditional methods such as rental property, partnership, where the partner is not actively involved. As the name suggests, a person need not be actively involved in earning passive incomes. Especially in 2020, there are various ideas by which one can earn Passive Income.
But we should know that:
- Just like active incomes, passive income is also taxable.
- But often, the Internal Revenue Service (IRS) agency treats it differently.
- It requires relatively less effort to maintain income.
- If you have dedicated around 100 hours for a business, it is a passive income.
- Some of the Examples of Passive Income include rental property, real-estate business, additional labor, affiliate marketing, etc.
Why should we Choose Some Top 10 Passive Income Ideas?
Many people tend to earn less with their active income job or regular 9-5 desk jobs. If you want to earn more you can always look forward to passive income.
People assume it is a way of earning without working. But that is not the case. For passive income, one must work, the only difference is that the work is up-front.
If you are considering earning some passive income, here are the Top 10 Passive Income Ideas:
1. Affiliate Marketing: Any search will tell you that Affiliate Marketing is the best passive income idea. The reason being the flexibility of income and work you get through Affiliate Marketing.
In Affiliate marketing, all you need to do is earn a commission by promoting a product. The product you are promoting online must be a known product to you and you must believe that it is a product of high quality.
If you have an online presence on websites and other social media platforms, you are able to promote a product of your choice.
You can also give recommendations on such products and share your knowledge of the products.
One way to get started with affiliate marketing is to directly form an affiliate relationship with a specific company whose product inspired you.
Another way is through commission platforms such as Amazon.com.
Along with a passive income, you can also make money through advertising.
2. Get a high-yielding Savings Account: You can earn through online banks.
They have set up a facility to offer huge interest rates that can help you earn money on your savings.
For example, in CIT Bank, you can earn an interest rate of 1.55%. There are also no monthly fees.
It is not the kind of money that is going to make you rich but it is still free money.
There are many other banks that offer competitive interest rates on their savings account with minimum opening balance.
3. Investing in Real-Estate: The Real-Estate investment involves the purchase, ownership, management of realty property for profit.
The demand for real estate investment is directly linked to the growth of GDP that makes it a good passive income and best investment option.
- You can also invest in crowdfunding real-estate. With just $500 you can start investing in the real-estate. You will get a 12.25% interest on your first investment.
- There various crowdfunding real estate platforms. RealtyShare is one of them. But here the minimum investment is $5,000.
- Your investment could be tied up for anywhere between six months to five years. However, you will also receive a quarterly or yearly payment depending on the investment option you select.
4. Investing in Stock Market: It is the smartest and, if implemented effectively, the most productive alternative for a secondary income.
A Stock market or equity market is a combination of buyers and sellers of stock (also known as shares) which represent ownership claims on businesses.
In a stock market to sell and buy shares on companies, it requires the two parties to agree on a price. The stock exchange or commodities exchange also involves traders shouting bid and offering prices.
Thus, Buy stocks that pay a dividend. You also earn a regular sum of amount. It is one of the top 10 passive income ideas.
5. Peer to Peer Lending (Loans): If you want a higher Passive Income you can consider lending loans to those people who are in need of it.
Some people are not eligible to attain a Bank Loan. Thus, they turn to such lenders for loans.
You can go on about this job by lending your money to the lending club. The lending club decides who is in the needs of money and lets them borrow the money.
The loans could be for various purposes such as starting a business, opening a café, for medical care, etc.
Invest with a small amount on such websites, get monthly payments as people repay their loans.
6. Online courses: There are various online websites that allow you to teach and upload videos of lectures. This income requires a little hard work at the beginning.
Prepare videos of lectures and subjects.
Upload on websites like udemy.com.
Then sit back and relax. Because with each view of the video or the lecture, you will get paid some amount.
7. Make money by renting cars: The car renting business is a profitable one. Needless to say, this requires a very high investment at the beginning. But once you invest, you can keep going and earn high Passive income.
People owning such business usually keep a little over INR 1.5 per kilometre. They also cost the petrol prize in the bill.
8. Selling information products such as guidebooks, audio, video courses. Information products like these can deliver an excellent income stream. You should have a strong platform and continually market your products.
9. List your place in Airbnb: You can rent out a spare room in your house through Airbnb. A great way of making money is to rent your house while you are on a vacation. It might seem risky, but Airbnb has up to one-million-dollar insurance if something goes wrong with the place.
10. Vending machines: A great way of making Passive income to open a vending machine in densely populated areas. Vending machines are a one-time investment. Once you invest, you can get money every time somebody picks something from the machine.
Passive income is highly sought after these days. You can build real wealth. After some time and hard work, these income streams start to build and you can get consistently paid.
Also Visit our category tips and ideas for more income ideas.