Perhaps, you 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.
Do you want to have another source of income without being involved personally? It is quite the dream, but not impossible to achieve. This is what having a passive income is all about. Its concept is promising, but starting one is not an easy undertaking.
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 pretty high. You can also try affiliate marketing, selling ebooks, and offering online courses or masterclasses.
15 Passive Income Ideas for You
Here are some incredible passive income concepts you can try.
1. Rental Properties
It is the most common passive income idea to try here in the Philippines. Filipinos who are 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 help owners put up online listings that reach a broad audience and leads that convert. Now, what about the capital? It is safe to say that 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 Spaces
It is somehow similar to a rental space, except that it is for ads. Many companies still invest in advertising, and they 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 amount of 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. Technically, to earn money, you need to 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 genuinely believe is useful. Second, do your research, and lastly, 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, which in this sense, 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 (can be daily, weekly, or monthly).
Royalties refer to the percentage of sales you get our existing published works, recorded songs, artworks, and even business ideas. This is precisely 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 out of 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. Big 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.
In the end, having an available passive income is a great way to invest your extra money. It will give you something to look forward to every day, 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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