Passive Income is basically the income you earn with little effort or almost no active involvement or energy after the initial work is done. By making the passive income you can retire early and can focus on things you really enjoy. WealthDrift brings you the 10 best ways to build passive income source that you can choose to build for your happy and rich future. Let’s start this article with a very beautiful quote by Mr. Warren Buffett.
If you don’t find a way to make money while you sleep, you will work until you die.
Warren Buffett
1. Investing
a. Invest in Stock Market – Start markets have a good hand in the economic growth of the country. You can choose to invest for the betterment of yourself and your country.
Average Returns – 12% – 15%
Platforms to open Demat Account– Zerodha, 5Paisa, Angel Broking, Upstox, Sharekhan, etc.
b. Invest in Mutual Funds – Mutual fund is an investment fund managed by a company wherein the company pools money from many investors and invests the money in securities, usually stocks and bonds. It is one of the most popular investment options these days.
Average Returns – 8% – 11%
Platforms for Mutual Funds Investing– ETMoney, Groww, myCAMS, etc.
However, people find it difficult to take out money from their monthly budget to invest. But it is easy to invest 1000$ a month if you have the right guidance and mindset.
c. Buy Real Estate/REITs – What more best can be done greater than owning real physical property and earn rental from it. You can invest by buying properties for residential, commercial, industrial, raw land, special use, etc., and invest through Real Estate Invest Trusts (REITs).
Average Returns – 9-11%
For guidance and best property to buy in Real Estate, you can Contact Us.
d. Invest in Business – If you have a good amount of money for investment then you can choose to invest in new start-up businesses and local entrepreneurs companies. Herein the risk is huge however the returns will be extraordinary.
Average Returns – 20% – 40%
Check our article on “Great investors of all time & their tips to invest in share market” to know the best investing tips.
Also, check our article on “Things to consider when buying a commercial property” for the best Real Estate investing tips.
2. Create videos and monetize them
If you are good at creating videos then you can start uploading them to the below platforms to earn passive income. In the long run, when these videos will take off in the public, they will start to pay you recurring money.
Platforms for Videos – Youtube, Facebook Ad Breaks, Vimeo, Dailymotion, Twitch, Amazon Video Direct, MetaCafe, Brightcove
Average Earning – INR 350/- for every 1000 video views
3. Create and outsource your business
By conducting a thorough market search, you can come with a brilliant idea to start a business of your own. After setting it up in the market for a few years you may choose to outsource it to some competent person to enjoy the passive income this business will give you in the future.
Pro Tip – Thinking business ideas is the easiest task, what matters the most is its implementation without giving up on yourself and your idea.
What to do, if you are not able to think of an innovative idea and have low capital to start a business then you can start with these income streams if you have under 1 lakh rupees. For this, read our article on “What should I do if I have 100k extra cash (INR) as savings?“.
4. Rent out your Car/Bike
You can also create a passive income source if you have a car or bike or furniture or any rentable items. In the case of a car/bike, you just need a driver that you can hire easily at a salary.
Platforms for renting out –
Rapido/Ola/Uber (Bike) – You can keep a bike rider at a monthly salary of INR 15,000/- whatever earn after is your profit. On average a bike rider earns INR 23,000/- monthly that means you get INR 8,000/- at the end of the month.
Ola/Uber (Car) – Hired driver monthly salary – INR 22,000/-;
Average monthly earn (Car) – INR 35,000 to INR 40,000/-;
Your monthly earning – INR 13,000 to INR 18,000/-
5. Write a Book/E-book
Another very nice way to build a passive income source among these 10 ways is to write a book/e-book. Books are the practical teachers of our life, they are our most knowledgeable and loyal friends. Therefore, you may choose to write a book and approach a publisher to publish your making.
Earning on a book sold (Hardcopy) – 7.5% to 8% of MRP
Top Publishers (Hardcopy) – HarperCollins Publishers India, Penguin Random House India, Rupa Publications, OM Books International, Tara Books, etc.
Earning through e-book – You can expect a commission of 70% on the list price of an e-book. Pro Tip – Write a specialized topic e-book.
Top Platforms (E-books) – Amazon Kindle, iBooks, Lulu, Smashwords, etc. You can also do Self-Publication of your e-books on your own.
6. Make educational courses
If you got some specialized skills and appropriate knowledge then why not teach those skills to the world. You can make educational courses and sell them to people outside to earn money.
The list of topics you can teach is huge which includes, but not limited to, teaching musical instruments, singing, art or photography, communication skill enhancement, gardening, cooking, marketing, technology, specialized curriculum discipline, and more.
Platforms to upload your content – Udemy, Skillshare, Stackskills, Thinkific, Digital Class World, etc.
You can also create your own content and sell it. Create a course and charge a fee for it or create a course, offer to people for free to watch but charge for certification.
Average earn – INR 15,000/- to INR 20,000/- per month
7. Royalty Income
This is probably the most unique passive income source among these 10 ways and very few people are aware of it, we also did not know at first. In spite of investing in stocks, properties, or securities, you’ll invest in royalties of various industries such as oil, gas & other minerals, music, videos, TV programs, solar energy, pharmaceutical, etc. You will earn royalty income by investing in these products or ventures.
Average annual return – 10%-20% of your investment
Platform to earn Royalty Income – Royalty Exchange, Lyric Financial, SongVest, Petrodip, etc.
8. Reverse Passive Income
You must have heard this quote, “A penny saved is a penny earned”. Herein in this strategy, we are not focusing on generating the income directly instead of working to cut down our own monthly expenses to save the money, that will become our income ultimately.
Idea is to pay off debt as an investment in reverse. For e.g. Let’s say you have a personal loan on Rate of Interest (ROI) 13% yearly, then if you pay it you will have that 13% return in reverse as your income.
You can also read our article on “Personal financial management tips with 20 advice to save money” to know the best money-saving tips.
9. Create an App and a Blog Website
Good in programming then you can create an App and monetize it to earn passive income. You can put In-app Ads and also set a price for the premium version of that app in AppStore.
If you made an App based on a service model like Yousician (Musical Instruments Learning App), then you can charge a subscription fee for its use to your users which will bring money to your pocket passively. The same goes for creating a Blog Website with unique and great content.
Platform to monetize your App for ads- Google AdMob, Smaato, Media.net, InMobi, etc.
Platform to monetize your Blog Website –
For Ads – Google Adsense, Media.net, PropellerAds, etc.
For Affiliation – Join Amazon, Hostgator, Coursera, etc. Affiliation program.
10. Become a lender [Peer-to-Peer(P2P) Investment]
Have a good amount of idle cash with you, you may choose to lend the money to the needy ones to earn interest on principal money. Since the loans are made to individuals therefore there is a risk of default. The best way to safeguard your P2P investment is investing in a platform that is RBI Certified P2P NBFC.
Average annual return – 12% to 24%
Peer-to-Peer (P2P) Lending Platform where you can lend your money – LenDenClub, Cashkumar, i2ifunding, OMLP2P, Lendbox.
Initial research and efforts required to build passive income are huge and time taking, however, it is worth going for a passive income looking at the benefits and time-freedom they provide in the long run.
Well guys this was our article on the 10 best ways to build passive income source. Hope this article gave you the ideas for building passive income for yourself.
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