Passive income | How can we generate passive income?

 

Passive income is the earning in which a person is not actively involved. In passive income, person does not require a little effort to earn. Passive income is usually taxable. Once, you have to do something to generate income and then you have to rely on that income. It requires a little time in the beginning and then it gives you benefit for a long time/throughout life. Physical appearance is not necessary for making passive income. Physical appearance is not necessary for making passive income. In passive income a person receives payment even after the work is over. With passive income you can make money, while you are sleeping or doing anything else.

Income

It is the money which an individual received after providing the services of any kind.

Types of income

There are three types of income

a- Active income:

Income for which services have been performed.

Examples:

 wages, salaries, commissions, and business income in which one participate actively.

b- Passive income

Passive income is the income in which one can earn regular income with a very small effort.

c-  Portfolio income:

It is the income from investment including dividends, royalties and capital gains.

              Examples

1.       Selling informative products

2.       Affiliate marketing

3.       Savings accounts

4.       Rental income

5.       Peer to peer lending

6.       Invest in high yield CD

7.       Dividing stocks Etc.

Sources of passive income

• Profit income
• Interest income
• Dividend income
• Rental income
• Capital income
• Royalty income

The internal revenue services (IRS) says passive income can come from two sources: rental property or a business in which one does not actively participate.

Importance of passive income

• It gives you the freedom of time
• It reduces stress, anxiety and fear of future
• You can do things that you want without any fear
• It gives you the ability to work from anywhere
  

Disadvantages of passive income

 1-At the beginning/setting up passive income take effort  and time 

 2-One cannot grow overnight

 3-It requires diversification to ensure that you have money flowing    in at all times

4-passive income can be too passive for some people.

How can you generate passive income?

·         By writing an eBook

·         Make YouTube videos

·         Try affiliate marketing and make sale

·         Sell your own products on the internet

·         Put your photography to work on the web

·         Purchase dividends stocks

Passive income can be made by writing an eBook. There also many other ways to make passive income that includes YouTube channel, through this we can make informative videos and get unlimited passive income for life time. BY affiliate marketing, in which we can also make passive income by generating sales. Passive income can be generated by selling others products in internet at different websites, by practicing photography we can also generate passive income and by purchasing passive income is generated. By purchasing dividend stocks passive income can be generated. So, these are some of the methods that are used to generate passive income.