What is Passive Income?
Passive income is money you earn without actively working for it. This can be done by putting something you own to work. You aren’t involved in the continued effort to make money as you are in a job.
Passive income can be generated from investments, assets or activities that require little effort once they are started. You aren’t making money in exchange for your time – at least directly.
What is the Benefit of Passive Income?
Earning extra money through passive income can be used to build up emergency funds or save for an upcoming planned purchase.
Having passive income or multiple income streams provides more flexibility in your finances as well as give you a little more money to fall back on when unexpected expenses arise.
How Can Passive Income Help with Retirement?
Instead of strictly relying on your paycheck for retirement, passive income allows you to keep building and adding to your retirement fund, even when things in the economy slow down or you have an unforeseen expense.
How Passive Income Builds Financial Security
Having a side hustle or other income give you another source of revenue, especially when there is a disruption in your primary source of income. You can fall back on your side hustle to help you get through the disruption.
What Are Some Passive Income Sources?
Rental income: Rent all or part of your property. This could be a long-term rental property, or a short-term rental property such as an Air BNB type of scenario.
Rent out personal property: If you have equipment such as trailers, tables, chairs, tents, tools, etc, that people can use.
Flip retail products: Resell items online or in a local booth. Find items you have around home that you are no longer using or clothing you are no longer wearing and sell them. Even finding gently used items at thrift stores and repurposing, repairing and or reconditioning and reselling for a profit.
Pet or House Sit: If you love animals, and want to earn extra money you can be a pet sitter. This does require some active tasks, but it is passive. If you house sit while taking care of the pet, it can be fun, like a mini get away, all while making a few extra dollars.
Sell Stock Photos: If you enjoy photography and have some great pictures you can sell your photos as stock images under a royalty-free license. You license it repeatedly for a fee and sell it multiple times.
Money Making Savings: Invest some of your already saved money into savings accounts that pay higher interest rates of return. These could be High Yield Savings Accounts, Money Market Accounts, Certificate of Deposits, and others.
Invest in the Stock Market: Investing in the stock market is one of the best-known ways to make passive income. It can be risky at times; it is an effective way to build lasting wealth without much effort.
Remember that the stock market is constantly in-flux, so this is a way to generate passive income over the long-term. This is not a get rick quickly thing, you will want to slowly grow your investments over your lifetime.
If you are interested in investing in the stock market, make sure to consult with a financial advisor about the types of stocks that would best fit your needs and goals.
In Review
Passive income can come from different means over time. This can be renting out personal property to investing in your current monies.
Each method has its own levels of risk and rewards, but the key to successful passive income comes from the strategies and occasional monitoring of the methods you choose to use.
Having more flexible income streams and passive income has given and continues to give people more financially secure foundations and financial freedoms.
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