By Vishweshwar HS, www.showmytrade.com
Active income-earning means to receive remuneration (cash) from a job/profession or business entity receives in exchange for providing a service or when making an investment and generating profits in business.
The most popular type of income is earned salary or remuneration for a job. Most people only think of income from working actively at a job. Salary income is exchanging your time by the hour for a wage or by the month for a salary. However, salary or payments are not the only type of income one can earn. Along with job/profession, one can earn passive income from sources that do not require much active engagement/physical presence to benefit from the earnings.
Traditionally, passive income can be defined by the money that earned on a regular time frame, with little effort, time, and energy. Passive income can be recurring on a daily, weekly, monthly, or yearly basis.
Some examples of passive income:
- Dividend income,
- rent received,
- interest received on fixed deposit,
- interest received on loan advanced,
- profit from business as a sleeping (silent) partner,
- monetizing skills online and earning revenue
Understanding Passive Income
Before understanding some of the best passive income ideas for automatic for regular income, it is essential to understand the concept of passive income. One can find several advertisements, posts on the web covering multiple passive income ideas, whether online or in the real world.
Now, when we say a passive stream of income, it means it requires little or no effort to keep the money flowing. Now, that does not mean it can be completely ignored or forgotten. It is essential to track every passive income stream and oversee it, no matter how sophisticated an idea it may be. Some people are thinking passive income is about getting rich automatically for doing nothing or need not to improve anything is wrong!.
Different Types of Passive Income
(1) Income earning long-term (investment) from the stock market
Investing in the growth, momentum, or value stocks, and when these stocks go up over time, sell at a higher price and make money. Earning for long-term is also called as wealth creation or investment. Earn dividend (if any companies declare from time-to-time) to increase net earnings.
(2) Income earning short-term (trading activity) from the stock market
One can make money from short-term trading. By learning technical analysis, the entry/exit of the stocks can identify and trade to make money from the stock market. In trading, we can take leverage (if you have Rs 10000 in your trading account, you can also trade up to Rs 50,000-Rs 100,000). And also make money whether the market goes up or down (uni-direction). One can trade short-term movements for generating monthly income. This skill needs to learn, practice with little money, and can commit big money to earn more money from the stock market. The investors are also trade in commodities, currency, derivative products, etc.
(3) Interest Income from Fixed Deposit or Bonds
The investor who is risk-averse and looking for recent returns without taking much risk can invest in various deposits. Fixed deposit, buying corporate bonds, debentures, NSC’s deposit scheme. Most of the saving plans designed to save money for an extended period.
(4) Rent Income from Properties
If one has large sums of money to invest, real estate is the better option for generating the rental income from the properties. Usually, one expects around 10-12% returns per annum. Renting properties is one of the recurring sources of revenue. But one needs substantial initial capital.
(5) Income from Affiliate marketing
Affiliate marketing is one source of earning a commission by promoting other people’ s/company’s products or services. Generally, if one likes the product/service, promote it to others, and earn a piece of the profit for each sale that one makes. There are many products/services are available on the Internet. One can learn how to promote online. If successful, one can earn handsomely. Anybody without proper qualification also starts the affiliate marketing to generate income regularly.
(6) Income from Online Course, Live Class, etc
If one has useful hobbies, skills, and knowledge, teach the same online to make a regular income. It could be photography, competitive exams, cooking, programming, artworks, etc. If one prepares courses, branding it, and selling online. Starting an Online Course is a popular way to start a business. If the courses you are offering have enough traction, you can make considerable money.
(7) Royalties & Licensing fee Income
If you are a blog writer, author, music composure, or any form of art creator, you have better ways to earn passive income. You can upload your skills to various portals and receive royalties, licensing fees for your copyright work. The Internet is buzzing with many portals where you can make use of your talent and can earn big money in the process.
Highly recommended to learn how to digitize your content, advertise with Facebook, YouTube, and other media.
There are many instances where passion & hobby turned into serious business to make a regular income and getting rich in the process.
Most think that a popular type of income is from working actively at a job. However, along with the regular job, one has to look at the options of passive income where you do not require much active engagement to benefit from the earnings. The Internet helps to access and opportunities to monetize the skills and make money regularly. One can explore the multiple avenues of passive income for a bright future. Good luck!
Kindly share your comments on the “What Is Passive Income and How to Earn the Passive Income?” below. Any suggestion regarding this article will update in the next edition.
Thanks for reading.