Passive income is often seen as the best form of income.
Why ? Because it is income that takes little time and effort to earn. Sounds pretty cool right!
It is worth noting that some time is required in order to set up your income stream in the first instance. However, once set up, passive income can be highly rewarding and you can even be making whilst you sleep!
It has never been easier to set up passive income streams, nor does it take a genius to do so. As long as you are willing to spend some time in order to creating and setting up your ideas, you will soon be well on your way.
What is Passive Income?
Income that requires little or no time to make, aside from the time it takes to set it up initially. It is the opposite of active income which is where your time is directly translated for money (such as your 9 – 5).
Some reasons for why passive income is so important, and income that I hope to increase:
- Less reliance on my 9 – 5 pay, spreading income sources over more than just one income stream
- More income available for investing for my future – including house deposit and retirement
- Chance of early retirement
- Possibility of gaining more time for what I love to do
Passive Income Ideas
Digital products can be a great way to form a passive income stream.
Ask yourself if their a hobby or skillset that you can use to create a digital product. Such creating a guide on how to…. (realted to your niche). Pdf downloadable or creating online pre-recorded courses both provide popular forms of passive products.
Etsy is a popular website to promote and sell your products, however their could be website / apps related to your niche to sell your product.
Investing in the stock market can provide both growth and dividend income, with the greatest benefits provided over the long run.
It has never been easier to invest, with low cost platforms and even managed portfolios such as Nutmeg meaning you do not even need to pick your funds. To make this an even more form of passive income – create standing orders so your money is automatically invested and choose dividends to be automatically reinvested so you do not have to do any work!
As always, do your research before investing and read this guide on how to start to invest.
Cashback is when you get a small amount of money back for a purchase made.
Getting used to using cashback when you make any purchases will help the passive income add up overtime. Do note – don’t just spend on things you do not need, just to receive the cashback rewards.
Cashback can also be an additional benefit to using an credit card. Some credit card companies, including American Express offer cashback credit cards. Sign up to American Express Cashback credit card using this link and you will receive £20 cashback for just spending £1 on your card. Remember to pay your card off in full every month, and only use the amount you can pay off.
A buy to let property is another form of passive income, and if you are new to it – there are rental agents you could go through who could help you find tenants. There are also website you could advertise your property on. Moreover, you can rent a room in the property you live in and utilise the tax-free threshold you are given in order to rent a room in your property.
Another popular property rental idea is using AirBnb, which could allow you to reach a wide audience of potential renters (for the short term).
Renting out parking spaces could be another form of passive income – especially in areas with high parking demand or located close to tube / train stations.