What is Passive Income? – How to Earn Passive Income in India
Passive income by definition refers to the income that we earn with little effort. This usually includes the extra income or the investment that provides us with output on the regular basis. So, whatever doesn’t require to be an active participant in the labor or a full-time participant in the endeavor of earning more is the passive income. Most people pick up part-time work or freelance gigs in order to earn extra bucks. It is a great way to utilize your resources for your monetary benefits. Passive incomes require you to invest your time and money only once and then it will keep earning you more and more.
- Rental properties:
Real estate is the type of investment that never goes out of fashion. It is one of the safest forms of investment that will earn you more returns with each passing year. Once you purchase a property there are many ways to get returns from it. You can put it on rent, resell it or you can refurbish it and lease it. It will earn you income over the years. The continuous increase in the real estate rates will bring you better returns. You also get extra returns in the form of tax rebates if you purchase the property using a home loan.
- Affiliated Marketing:
In Affiliated marketing, you do not have to invest anything from your end. In order to become eligible for an affiliated marketing program, you have to register first. Most affiliated programs are free of cost. Or you can even get a sponsor for the post. You will get the affiliated link for the product you want to market or code from your sponsor. Whatever products are sold after using your link or the code will earn you a certain percentage of the product’s amount. Once you put the link out there you do not have to work in that direction again.
- Investing in the stocks:
The stock market is a common mode for wealth creation. It does have its demerits like the risk that comes with it however, it will not only generate income for you but also will contribute to wealth creation. Once you understand the working of the market then you can time it properly or diversify the portfolio of the stocks to mitigate the risk. You can even opt to invest in the scheme that offers a dividend option so you will keep on getting regular income throughout the period.
- Investing in a pension plan:
Many term insurance plans offer retirement plans or pension plans for your sunset years. You can start investing small sums of money in them regularly while you are working and then opt for the monthly payment options or even get money in a lump sum and then reinvest in other investment plans. Returns from the pension plan or the insurance plans are usually tax-free or you can tailor-made your plan in order to save tax from it.
- Peer to peer lending:
Lending money to others can get you more returns in the form of investment. When you lend someone money you consolidate their debt. This option is convenient for the borrowers as they do not have to provide a guarantee or the collateral for the debt like they would have done in the bank and also, they immediately get cash without having to go through the formalities. You do not have to follow the Reserve Bank of India’s regulation on the base interest rates. Therefore, you can levy more interest on the loan if you wish to.
- Fixed deposit schemes:
Savings accounts do earn you interest on your savings, but the interest rates with them are lower. If you invest in the fixed deposit schemes that earn you better interest rates, there is a lock-in period on them. So, if you are not in immediate need of the cash then you can invest in them. Also, nowadays there are Flexi deposit schemes that offer liquidity of the savings account and the interest rate of the fixed deposit. Thereby, you get better returns as well as liquidity on your investment. Some fixed deposit schemes are specifically curated to save the tax of the investors. You can also invest in them.
- Sell an e-book or book:
Writing an E-book or book is the dream of many. This dream if became reality can become a huge source of passive income for the writers. With many free e-book publishing programs, it has become really easy for writers to publish their books. Once you write it your efforts are done. With good marketing and word of mouth, you get returns from it in the form of sales, royalties, and other book-related deals.
- Video creation:
Vlogging is another way you can generate passive income. Almost all social media provides platforms to the creators. You create a video with specific themes or anything random. Once you post it online, you will get revenues from it. Some brands also seek content creators for their brand placements. You can get paid through your clients. You will also do affiliated marketing or collaboration with the brand or other content creators and earn passive income. If you post educational videos and start coaching through video content, then you can even earn by selling your course. You can reuse your old videos or can update them.
- Invest in a start-up:
All start-ups need cash to kickstart their business. You can invest in the start-ups and get returns from them. You can either partake in the decisions of the business and start handling the day-to-day activities along with the profit-sharing or you can just have profit sharing and invest again if required but by keeping yourself completely out of the loop. Investing in a start-up will ensure that you get regular income for the long run.
- Start a blog:
Blogging is one of the most cost-effective ways of generating passive income. But you have to be patient with the blog, it takes time to actually make your presence online and then start earning from it. But once you get on track you will keep on generating passive income for yourself. You can even use it as a side hustle.
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