It’s difficult to attain financial independence when you have only a single income source. A report by CNN stated that about 44 million Americans have side hustles asides their regular jobs. This highlights the importance of having a Passive income, which has become the norm as the prices of things go up every year.
What is Passive Income?
Passive income is a recurring income stream that requires little or no work from you. It differs from active income (your current job or business). But, while there little obligation, it’s not an automated system that you just forget about. You will need to track your income stream and make essential decisions to improve on it.
At the end of every month, you will earn double income. Imagine what will happen if you can have up to four or five passive income streams. Here’s why you need passive income sources.
Why Is Having Passive Income Important?
• It gives you freedom of time. You don’t need to work overtime to supplement your income.
• Reduces the stress associated with financial planning
• Removed income limits and allow you to do things you love
• It provides stable financial growth over time.
• Ability to live and work anywhere you want
How Do You Create Passive Income?
There are various passive income models you can adopt, whether as a first time or seasoned investor. I’m sure you must have seen those ads offering 200% of your investment in 7 days. Well, those are passive income strategies, but I can’t guarantee their legitimacy.
Below are 5 ways you can earn passive income.
Invest in Real Estate
This involves investing in homes purchase and leasing. While you may not have a large sum to buy a whole building, crowdfunding real estate sites like Realty Mogul and Fundrise allow you to become a partial investor with a little amount.
Invest in Dividend-Paying Stocks
Stocks are the first thing that comes to mind when most people hear the word “invest”. It’s one of the most effective ways to earn passive income. However, it requires a basic knowledge of how the market works. Aside from stocks, you can invest in mutual funds and earn a periodic dividend.
High Yielding Savings Account
You can also invest in high yielding savings account if you want more conservative investment. Online saving accounts have higher interest rates compared to conventional banks. Some pay as much as 15% and allows you to lock up the account and keep earning interest yearly.
Become A Business Silent Partner.
Starting up a business is an effective passive income model. However, since you don’t have the time to run the business, you can invest in another company or a startup and get monthly income from profits.
The business owner will handle the day to day running of the business, while you check on it periodically.
Create And Sell a Course
If you have a technical skill, then you can earn selling online courses teaching that skill. For instance, if you are an architect or graphic designer, you can create courses to teach other people the skill. Platforms like Udemy.com, Coursera, and Lynda, allows you to earn selling courses.
Investing in passive income is the first step to attaining financial freedom. To quote MokokomaMokhonoana (Author). “He who makes $25,000 annually through passive income is more enviable than he who earns $100,000 annually through a salary.”