Passive income, in layman’s terms, can be described as an income which comes even though a person is not working actively. Passive Income can come from different sources like rental property, real estate deals in which a person is not directly related. Passive income, though taxable, can make you financially free and when a person is financially free, he can leave the desk job if he wants and pursue the life of his dreams.
Here are some of the most widely used ways to earn passive income and become financially free:
- ● Rental Properties and Capital Gains: Through renting a piece of land or premises, which is an age old practice, many people have earned passive income and become wealthy. Also, buying a property and holding on to it for a long-term or a short-term, depending on your preference, only to sell it at a high price is being done since ages and is another prime form of passive income.
- Invest in Crowdfunded Real Estate: Many of us would be interested in earning through real estate but do not want to directly get involved in holding properties. For them, it is a lot better to invest in the crowd funded real estate investment in which the Investors lend money to the cooperatives and they would instead pay you the interest on the money. The biggest advantage of investing in the crowd funded investing is that the investors can spread the money across many correlated real investments without the fear of significant issues that happen in individual investment.
- Roll Out Investment in Dividend Growth Stocks: Always try to invest in the dividend stocks which not only have a strong and excellent history of dividend growth but also pay you a large dividend. When building an investment portfolio, try to research and put your focus on buying the companies which gave a strong history of both dividends and strong financial growths.
- Invest in Local Business: Being a silent partner in a local business can bring up a lot of passive income. In this way, in one hand you can mind your own business and on the other hand, you generate an income without taking the pains of having to work yourself. A perfectly good business in your locality having kind of cash flow issues is the most advantageous way to invest in these business.
- Renting Out Items: Believe it or not, your possessions can actually work wonders for you and fetch you good returns. For example, renting out your vintage furniture for photoshoots can reap juicy benefits.
- Rent Out Extra Rooms: This business is widely done nowadays. If you have an extra room fit for living, you can share it with either a roommate or else put the room on rent for travellers from sites such as AirBnB, OYO, etc.
You are expected to work hard, but if you combine a bit of smart work in it too, the resulting passive income can make your life a lot less hassle-free and make you financially free so you could live the life of your dreams!