How to Create a Passive Income
December 29th, 2008 |Imagine having a life where we have to work only once and the money keepcoming inagain and again, weeks after weeks, months after months. This, in a nutshell, is what the concept of Passive income is all about.
It is thebest income in the world because it comes in automatically, without any major involvement on our part.(Although we have to do the initial hard work for generating it).
Here we discuss some of the ways of generating Passive income.
1)Real Estate
When one has a piece of Income producing Real Estate (One which you own and have given out on rent), then it can be considereda superbsource of income. This is becausethe tenant would be working to run his business and he would be payingthe landlorda fixed rent on a monthly basis just for usingthe property. Initial Work Required: -Investment in property andfurther modifications, if required, based upon which it can be leased out to prospective tenants.
2)Fixed Deposits in Banks
Just imagine having a million USD inafixed deposit in your bank, from where you earn a minimumof 10% per annum. That makes it USD 1, 00,000 peryear or close to USD 8000/- per month,And the best part is that youare not even working to earn that USD 8000/-You are free to do other things while the money comes in. (Though in the above point, we have taken a million dollars just as an example, but it applies to small sums of money as well). Initial Work Required: - One needs to work and generate sizable savings in his bank prior to investing in a bank deposit.
3) Network Marketing
This is based upon the fact that, more the number of business associatesone has, more is the business volume generated and more is the possibility of generating royalty income / passive income. Oncea person isable to build a strong foundation forhis business (which means educating enough people about the benefits of the products, business model and making themassociates in his business network,thenhe can be rest assured thatthe business can run ahead indefinitely andhe can expect bigger cheques every month inhis mail.
4) Patents, Books, Songs and other similar Royaltyincome generating assets.
Under this category, the singers, writers and inventorsown the rights to their respective assets and whoever wishes to use their work would be giving a royalty income to the creator of the asset. So, here the owner does the hard work only once and gets paid repeatedly.
More to Follow……………….
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