What is passive income
Passive income is an income that does not depend on daily work. That is, in order to receive passive income, one does not have to go to work or carry out any activity.
Usually passive income is the income from various types of investment. You need to invest money – to buy stocks, bonds, securities and already receive dividends from them.
Sometimes passive income includes rental income. But this is a very controversial statement, as the owner must service the leased property: repair the car, which is rented or contain an apartment. But this income is not passive.
Unlike cars and apartments, stocks and bonds do not need to be serviced. They do not break, do not deteriorate, they do not have depreciation. The only thing that the owner should do is properly keep their securities.
Bank accounts are also a stretch to passive income. The fact is that the percentage of profit that the bank offers is often lower than inflation. Thus, passive income turns into passive expense. Banks are a way to save your money from theft, break-ins, robbers, but this is not a way to increase income.
In no case, income from personal business cannot be attributed to passive income. Yes, a person invests in order to start a business, but in order for a business to develop and support an entrepreneur, he works and works a lot.
Passive income does not involve work. Once you have invested money and you are not doing anything, you are waiting for profit and you live on interest from the income.
But passive income can be obtained not only by investing money, you can invest in mind or work, create a creative product. Passive income includes deductions for the use of a patent, as well as deductions for the use of copyrighted works.
Passive income on the Internet
On the Internet there are many ways of passive income, which in fact are not passive income. By and large, the authors are deceiving users, claiming that once you create a product and the money will flow to you like a river.
So does not apply to passive income:
Creating your own website. Blogging A blog or monitor or any other site is a very complicated and hard work. To get income from this, it’s not enough to create your own website or blog, you need to constantly promote it, that is, work, fill it with material, look for something new. You will not support your site and people will immediately lose interest in it.
Referral system. Attracting people to the project is a big job. On various affiliate programs you can earn great money. Well, the main and key word here is to work. To do this, create sites, keep blogs and do a lot of work.
Network marketing. Advertising of any network marketing says that you do not need to do anything, as soon as you build your own structure and the structure will work for you. And all this time you will enjoy a lot of money and do nothing. But it is not so. Firstly, the structure must also be built, and this is work, and secondly, if you do not support the structure you built, it will quickly disintegrate. In any case, network marketing is a big job.
What can be attributed to passive income at a stretch:
Lotteries, casinos, prizes, winnings. With a very big stretch, this income can be attributed to passive. Yes, one does not have to work here, but one should not forget that passive income implies permanent income. And winning in a casino or lottery is a one-time promotion. If you find a way to constantly win at the casino and in the lottery – this will be your passive income.
Which is clearly passive income:
Various types of income from investing activities are classified as passive income. A person invests in the development of an enterprise, in return the enterprise pays him a share of the profit.
Types of Passive Income
Income from securities. There is a wide variety of securities: stocks, bonds and their derivatives: derivatives. These financial instruments can be bought through exchange brokers, and many banks also work with such financial instruments. But unlike bank accounts, holding securities gives its owners a big profit. In addition, many brokers and even banks have financial advisers who help to choose the right investment portfolio in order to make big profits.
Revenues from cryptocurrencies. Thanks to the advent of cryptocurrencies, investors have a new opportunity for excellent earnings. In 2017, Bitcoin grew 20 times, Ripple grew 400 times, and some cryptocurrencies grew even 1,000 times. No other assets showed such growth.
Token revenue. With the advent of smart contracts on Ethereum, such a direction of raising funds as crowdfunding has developed, that is, crowd funding. Now any startup can issue tokens and conduct ICOs, where tokens will be sold. Token owners are co-investors of the startup and receive income from its future activities. As well as the shares of enterprises, tokens grow on cryptocurrency exchanges in price, if the startup is successful and the need for tokens is large.
HYIP income. HYIP – highly profitable investment projects. Most of these programs are pyramid schemes. However, with the right investment and the distribution of the investment basket on such projects, you can make good money, as medium-interest highs pay 30% profit per month, and high-interest 60% per month or more.
Sources of Passive Income
In order to receive stable income from investment activities, you need to be well versed in this investment activity. First of all, you need to decide in which area you want to receive income: whether it is the stock market and securities, the cryptocurrency market or highs.
The principles of earning alone, once invested and you make a profit, but the features in each area are different.
The most stable exchange market. But even the shares of large companies are highly dependent on market conditions and stock market news and can both go up in price and sag. Therefore, it is very important to understand what you are doing and choose the right investment basket.
The cryptocurrency market is subject to sharp fluctuations. For the day, the price of cryptocurrency and tokens can fall by 25%. On the other hand, in 2017, Bitcoin grew 20 times, and Ripple grew 400 times. This is a great chance to both make money and lose it. With cryptocurrencies and tokens, you need to be very patient, be able to wait and not panic when the price falls by 25% per day. After some time, it will recover and again begin to grow.
In HYIPs, you need to constantly withdraw profit. You should never forget that any hype over time becomes a scam. Therefore, in order to invest in HYIPs on a stable basis, you need to constantly look for new projects. Thus, passive income is gradually becoming active and requires a lot of time.
Ways to get passive income
You can’t invest in everything in a row. You simply don’t have enough money for that, and time too. Indeed, to be a successful investor, and not just to throw money, you need to understand the subject of investment and choose the direction of activity that is closer to you.
You need to choose depending on your personal character traits, on what is closer to you – stability or risk. And also depending on the amount of investment. In the stock market with 100 dollars you can not meddle, even $ 1000 is not enough for investment. And in highs – $ 100 is the normal amount to start and try yourself as an investor. Also, through exchangers, you can buy small amounts in cryptocurrency.
Having chosen the direction you need, you need to carefully study it. To do this, there are blogs, monitors, forums. You can read special articles on blogs and subscribe to the newsletter.
The more you know the topic, the better you navigate it, the more confident and successful your investment.
How to create passive income
Passive income gives Internet users great opportunities. The main thing is to choose the direction of generating income that interests you more and is close to you in spirit and carefully study everything. After all, your income will depend on your desire to better understand the topic and figure it out.