All Financial Wisdom
5 Kinds of Passive Income
Passive income is the best kind of income. Passive income is income that is made without continual effort. This means, while you are sleeping or vacationing, you are getting paid. This is different than other sources of income because you are not trading your time for money all of the time.
1. Investing into the Stock Market
Grows or declines while the market moves up or down. There are dividend stocks and bonds that can be accounted for to regulate the dips and peaks. Once of the best resources to get started with investing passively is the Bogleheads' forum. I suggest writing a post about your financial situation and what you want to do. They can help you with your asset allocation and what funds you should invest in.
2. Investing into a business or Startup
Having someone else grow and develop a business is a great way to earn a passive income. Using your money, they put their time and effort to grow it. You would earn income as they do the work. For some investing opportunities, you need to be an Accredited Investor.
3. Start an online business
Some forms of online businesses are more passive than others. You could have a relationship with a great drop-shipper and have a great landing page to sell your products. Once it is all up and running, minimal effort might be needed every once and a while to stay up to date and relevant. The best resource that I use is Pat Flynn's Smart Passive Income Blog and podcasts. He provides great resources on how to get started online and brings on knowledgeable people to bring different strategies and stories.
4. Collect Royalties
A possible way to collect a passive income is to collect royalties from patents, copyrights, licensing deals, or other pieces of work. A great option is to selling ebooks online. They can be inexpensive to write and publish. You can submit your book to Amazon for their Kindle readers here or choose to go with the iTunes book store, iBooks, here. Once the written copies are out, you can create them into audio books as well to extend your reach and market. The reach of the Kindle and iTunes is very large and you can be cashing in passively.
5. Investing into Real Estate
This is a popular option found around the words of passive income. However, my personal belief is that only if you go through a professional property manger will your real estate investments become passive. Tenants and properties can have timely and expensive repairs that can ruin your day or your month. For example, there can be plumbing emergencies, or an unexpected vacancy that can cost you time and money to fix and repair in a timely manner. Going through a professional property manager can help squash those midnight notifications, regulate maintenance, foster uneventful tenant turnover, and protect your investment. Biggerpockets is a great resource to begin your journey as a real estate investor.
Begin your Passive Income Journey
For each kind of passive income, once it is all up and running, minimal effort might be needed every once and a while to stay up to date and relevant.