A simple guide from an earlier era suggested eight hours for sleeping, eight hours for work and eight hours for leisure. Nowadays, work seems to take up more than its fair share, and many people might be seeking a way to maintain or increase their income without increasing their working hours. Creating passive income is one way of achieving this goal.
What is ‘passive income’?
Passive income is regular and reliable income that doesn’t rely on constant active involvement. In other words, you get paid multiple times for something you only did once. It sounds too good to be true, but it is possible.
There are numerous opportunities, of which these are just a few:
- Writing a book, blog or making YouTube videos.
- Selling products via an online store.
- Investing in property for rental income and capital growth.
- Investing in sound, dividend-paying Australian shares.
Some of these options require investment capital, while others require time to establish them.
However, an even simpler way to earn passive income is to pay off debt. If you’re not paying interest on your outstanding credit card debt every month, that money is all yours!
Online businesses
Thousands of businesses are now only web-based, and hundreds more seem to pop up daily. And it doesn’t have to be a business that sells anything – bloggers can earn mega bucks from advertising. Advertisers will gladly pay the owner for space if a site is popular enough.
Internet gurus espouse that this is the way of the future. However, the reality can differ on how many of these businesses are profitable and, just as importantly, how much time is required to make them profitable.
As with any new venture, conduct solid research of existing opportunities or maybe just look around you at what others are doing. Identify a need and a market willing to pay for that need.
It will take time to set things up, but if done right, maybe you can earn “money for nothing”—well, almost!
Investing in your future
One of the great aspects of investing is that your portfolio can be a source of passive income. If you choose to reinvest the passive income you generate, compounding your returns will help your portfolio grow even faster.
Working with a financial planner to help grow your investment portfolio is another great way you can move from relying on your income from working to creating a passive income stream for your future.
The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional. We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.
