You may have heard about your friend or relative renting farmlands, fisheries, or other properties back in your province.
Or, someone who pursues a passion for baking goods during spare time and is now one of the known bakeshop owners in your area. There are many ideas to start a steady income flow without spending much of your time developing its business model and overseeing daily operations.
This is why having a passive income is a promising concept, but it is challenging. Do you want to have another source of income without being involved? It is quite the dream, but possible to achieve it.
Passive Income Defined
So, before discussing other possible passive income ideas, let us define first its meaning. According to Investopedia, passive income is “Earnings derived from a rental property, limited partnership, or another enterprise in which a person is not actively involved.”
Yet, we want to define it in a way that is simpler and more comprehensive: “Earnings acquired without direct involvement in daily operations.”
There you go. The simpler, the better. Now, what? Of course, discussing the types of passive income will help you understand it better.
Types of Passive Income
In general, passive income is categorized into three types: rental, investment, and online. Here is a more detailed explanation.
Any business you own that is into renting out properties either to other individuals or companies. It could be personal rental properties (e.g., condo, an apartment, or a house) or commercial spaces perfect for retail businesses or office areas.
Using a portion of your savings to investment that grows over time. If you are considering this option, start with investing with dividend-earning stocks.
Any online activities that can give you potential earnings over time are considered a great source of passive online income.
For example, if you have a blog that is nurtured for an extended time, with good traffic and domain authority, the likelihood of getting monetized is high. You can also try affiliate marketing, selling ebooks, and offering online courses or masterclasses.
20 Passive Income Ideas for You
Here are some incredible passive income concepts you can try.
1. Rental Properties
is the most common passive income idea to try here in the Philippines. Filipinos into real estate investments tend to follow this trend, putting up homes, condos, or apartments for lease.
Landlords who are lucky enough to acquire a significant portion of lands as their inheritance or as part of their investments indeed have a secure way of turning them into useful rental properties.
The advancements, too, in terms of listing and rental services online, help many property owners to gain extra money out of their properties. Rental platforms like Airbnb, FlipKey, Booking.com, and others allow owners to put up online listings that reach a broad audience and leads that convert.
Now, what about the capital? You do need millions to start renting our properties. You can start small, say a stall in a local market, or even the extra space in your garage.
2. Ad Space Rental
It is similar to a rental space, except that it is for ads. Many companies still invest in advertising and need areas to show them other than having them online.
For example, the spaces can range from the typical billboard ad to lighted signboards you see on top or back of taxis. Then, if it is online, you can post banner ads on the website and put affiliate links to gain commission.
3. Fixed Income Securities
Simplified, it means a type of investment that pays the investor a fixed interest at a regular schedule. Some examples are treasury bills (T-Bills), Treasury Notes (T-Notes), Treasury Bonds (T-Bonds), Retail Treasury Bonds (RTBs), Corporate Bonds, Dollar Sovereign Bonds, Dollar Corporate Bonds, Certificate of Deposit, and Long Term Negotiable Certificate of Deposit (LTNCD).
4. Building Websites
You can start building websites and then use them later on for advertising, e-commerce, and affiliate marketing.
5. Buying or Selling a Website
Online services like Flippa.com and Empireflippers.com are the best marketplaces for those looking to buy or sell a website. The analogy is simple: websites are like businesses that can either be sold or purchased. In the end, you can either run it or make income, then sell it later.
6. P2P Lending
In layman’s terms, P2P Lending is the practice of lending money to individuals or businesses through online services that match lenders with borrowers. Some of the popular platforms now in the Philippines are Blend PH and FundKo, which run at lower overhead costs versus traditional sources, like banks. This set-up lets lenders get higher returns and the borrower lower returns.
Microlending, also known as microfinancing, was technically designed as a financing system to help small businesses and financially challenged individuals. Unlike P2P, the risk in microlending is high. Yet, it is still a viable passive income option through interest gain. This is exactly true, especially if you have enough resources and a strong community or group supporting the business.
8. Dividend Investing
The goal of dividend investing is to pick and invest in stocks that yield dividends or the money that shareholders receive from the company for investing in them. It is somehow similar to a minimal cash reward, which equates to more shares mean more money.
9. Crowdfunded Real Estate and REIT
Crowdfunded Real Estate allows pooling of money from different investors and then using that money to buy or improve real estate properties, a concept very similar to P2Ps. On the other hand, Real Estate Investment Trusts or REIT is a company that invests in real estate by financing and operating real estate properties, or even owning them, eventually.
10. High Yield Savings Accounts
Putting your money in the bank is still one of the easiest ways of saving and growing money. However, you should choose an account that yields higher interest rates compared to others over the years. So, the answer: research thoroughly.
11. Cryptocurrency Mining
Cryptocurrencies are associated with Bitcoins, Altcoins, and others that work similarly to “mining cryptocurrencies.” Hence, if you are unfamiliar with the concept of cryptocurrencies, we recommend that you learn it first.
To earn money, you must do more hashing power to the network. However, building a powerful mining farm could be an expensive endeavor, with the cheapest one costing around P80,000.
So, how to ace this field? First, you should invest in cryptocurrencies and technologies you believe are useful. Second, do your research and use mining profitability calculators to assess your potential investment’s feasibility.
On the other hand, a masternode is a server within a decentralized network that can perform more advanced functions than regular nodes.
In this sense, it refers to a computer connected to a cryptocurrency network. Here are the steps to become a masternode operator: (1) lock a significant amount of coins in a crypto wallet, (2) set a storage space to house the blockchain, and lastly, set up a server and dedicated IP to host the wallet 24/7.
It works by keeping a certain amount within the network, and then you get rewarded and paid by the system, depending on the schedule set (it can be daily, weekly, or monthly).
Royalties refer to the percentage of sales you get from our existing published works, recorded songs, artworks, and even business ideas. This is the good thing about owning something that anyone may need. Other examples of things that have royalties are photographs and video footage.
If you are a freelance photographer and videographer, you can make good money from your shots and clips by allowing others to have rights. Still, they should give you a percentage of the total sales, mainly if the materials are used for commercial purposes.
14. Digital Products
Digital products can include ebooks, online courses, and applications. This is the best for developers whose passion is making useful apps that sell. You can also share your knowledge on existing teaching platforms and get paid with your tutorial videos. There is so much you can do digitally based on your niche and expertise.
Another passive income idea you should eye for is franchising. This is the best option for you, especially if you plan to own a business that has a proven system and business model.
Technically, franchising requires you to spend time overseeing the operations, but not now anymore. Thanks to the franchising co-ownership option offered by some franchisors today - you can already relax at your home and wait for your shares quarterly or monthly, depending on the contract and schedule.
16. Storage Rental
If you have unused space in your home or property, such as a garage or attic, you can rent it as storage space for individuals or businesses. This can provide a steady stream of passive income, especially if you have multiple rooms that can be rented out.
17. Stocks Investment
Investing in stocks can provide long-term passive income through dividends and capital gains. You can do this by opening a brokerage account, researching and selecting individual stocks, or investing in a stock index fund.
18. Mutual and Index Funds Investment
Mutual and index funds are investment vehicles that pool money from many investors to purchase a diversified portfolio of stocks, bonds, or other securities. This can provide a passive income stream through distributing dividends and capital gains.
Dropshipping is a retail fulfillment method where a store doesn't keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer.
You can start a dropshipping business by creating an online store, sourcing products from suppliers, and marketing your products to potential customers. This can provide a passive income as orders are fulfilled, and payment is received.
20. Freelance Services
If you have writing, graphic design, programming, or marketing skills, you can offer your services as a freelancer on platforms such as Upwork, Fiverr, or Freelancer. This can provide you with passive income as clients will pay you for your services on an ongoing basis.
Ultimately, having an available passive income is a great way to invest your extra money. It will give you something to look forward to daily rather than relying on your monthly paychecks.
Remember, there is nothing wrong with only using your income funds, but it helps to have other avenues to get additional funds to help you become more financially stable.
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Disclaimer: Franchise Market Philippines strives to provide relevant and accurate information in all its articles. However, some information in our articles may differ or might be outdated from what you can see or read directly from the establishments' or businesses’ websites. Please get in touch with us directly for any discrepancies.