Explain Passive Income
What is Passive Income and why is it the secret of the very rich? Passive income – income that takes minimal labour to earn and maintain. The idea is that you only have one pair of hands, and you can only do one job at a time, so if you have multiple revenue streams that work even when you are asleep, then this will make you very wealthy. It is the SMART way to riches.
Examples of Passive Income
- Dividend-Paying Stocks: Invest in UK companies that pay regular dividends. Look for companies listed on the London Stock Exchange (LSE) with a history of consistent dividend payments. You are looking for dividend payments that are both over inflation and above the base rate you can achieve by just leaving your money in your savings account. If you choose a blue chip company, it is a safe bet. You can only lose your money if the company goes bust. However, with all low-risk investments, the returns are low.
- Property Rental: Purchase property for rental income. Consider residential or commercial properties, considering the responsibilities and regulations associated with being a landlord in the UK. Buy-to-let is very common, although getting increasingly less popular as the Government keeps changing the law to make being a landlord less profitable and more problematic. See the UK government’s war on landlords causing havoc in the rental market here.
Recommend Passive Income Ideas
- Holiday Lets: Perhaps one more popular property investment that is taking the UK by storm is purchasing second homes. Holiday homes is nothing new however, buying holiday homes as a rental investment is something different. Holiday home rents are high, especially in prime season. However, any property rental has one common element: tenants who complain.Holiday rentals have more short-term tenants, so an even greater propensity for problems. A solution is Management. Management companies specialising in providing all required services, advertising, clearing, dealing with complaints, reviews, and rental rates do it all. One of the best is Hello Guest in the South and Clark and Anderson in the North.
- Crowdfunding: Crowdfunding offers opportunities for low-level investments in start-ups. How it works. Crowdfunding offers high rewards but also huge risk. It is not for the sleepy investor just wanting to create an autopilot passive income.
- Create and Sell Digital Products: Selling products on eBay or Etsy is nothing new and, frankly, hard work. However, creating digital products is something different. Digital products never, become out of stock and can we duplicated perpetually. I sold a list of UK 6,000,000 domains for £49.99. I sold over 788, which generated £39,392. It cost very little to create but at the time it was the only list available.
- High-Interest Savings Accounts: The oldest and lowest return. It is passive income but with higher inflation rates, which is becoming the opposite of passive income: passive loss!
- Create a YouTube Channel or Podcast: Sound easy, earn money in your sleep. This is a great stream of passive income. However, you will have to create over 100 videos before gaining any traction. This is a penny passive income, as the amount of time required to make it happen is too great. THE ONLY PEOPLE WHO MAKE MONEY IS GOOGLE.
- Invest in a Business: Consider becoming a silent partner or investor in a small business. This may involve providing capital in exchange for a share of the profits. This is a really good idea but if you have no experience in business or SME finance, then the chances of losing your money are high. It is also a slow burn. Small businesses have small profits.r.