- Passive income can help you with extra cash without actively getting involved in a business.
- It saves you from taking on extra responsibilities which come with active participation in a business.
- Such an income can be only achieved through structured and deliberate planning.
Passive income is considered one of the best ways to generate extra cash. Such an income includes self-charged interest, rental properties, and businesses in which the person receiving income does not actively participate.
It can also help you to tide over challenging times, especially if you suddenly get unemployed or plan to take a break from regular office work. So, passive income can give you that extra bit of psychological and financial security.
However, passive income doesn’t come easy. It can be only achieved through structured and deliberate planning.
Here we discuss five ways through which Australians can build passive income:
One of the most followed ways to generate passive income is by investing in the stock market. You can buy dividend paying shares and receive dividends without any need to do something extraordinary. In case, you find the share market risky, the investments can be diversified via exchange traded funds (ETFs), or simply through buying shares across different companies and industries within your portfolio. You can begin with stock investing, with relatively little funds.
Blogging is one of the best options to generate passive income at minimum input costs, if you are a good writer and own a computer with a good internet connection. Either you can start your own blog or freelance for others. However, the first option may take some time before you start earning bucks. Blogs make money via ads which pop up at the bottom of posts, and through affiliate sales. However, it only happens as the blog matures and starts ranking in online searches. On the other hand, if you are freelancing for others, ensure that you quote the right price for each word you write.
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It was almost impossible a couple of decades back to have your own channel and also earn money out of it. But today, it is a well-known reality. There are examples of YouTube creators earning millions of dollars from billions of subscriber views. If you have creative skills to produce eye-catching videos, then a YouTube channel could be your path to passive income.
Heard about licensing? It is all about renting your ideas to a company which can produce and market it. However, licensing is basically for people with a creative skill set, who are too lazy to execute it themselves and run a business.
Investment in commercial property can be another good idea for generating passive income. Unlike residential property, where you have to bear maintenance and other costs for tenants, there is no such obligation in case of commercial property. Large institutions such as banks typically require commercial properties to run their offices. They also offer good rents. Most lease agreements provide for an annual increase, somewhere around the existing inflation.
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