Passive Income

Passive Income, I know when you heard this for the first time, you might have been a little bit awkward. It is obvious. The people who had throughout their lives worked hard in traditional ways to earn their livelihood may not digest this. In doubt, they will always think, how can any income be a Passive Income? But, this is possible.

So, what is a passive income?

An income that does not require the active participation of someone to earn is a passive income. Passive income meaning in Hindi is “nishkriy aay“. It means even when you’re sleeping, you can earn a passive income or nishkriy aay. Yes, you’re निष्क्रिय while sleeping.

So, how does it work?

Here are a few passive income examples that can help you to understand it better.

Suppose you buy some units of a mutual fund scheme for an NAV of 10 Rs each. After a few months or years, the NAV increases to 12 Rs per unit, you’re total investment has grown by 20%. Isn’t it? Did you do anything for this raise? No, you earned that 20% passively. This type of increment is called a passive income.

Example 2,

You design a website and start selling affiliate products. You don’t work round the clock on it. But, your website is making sales even when you’re sleeping, this is also a type of passive income. And if you have more websites that earn money, you will have multiple passive income sources.

What are the different passive income sources in India?

There are a number of ways where young adults or even older people can earn money without actively participating all the time. What you need to do is refine how will you start and how will you grow your ideas to income earning streams.

1. Earning money from blogging- Yes, a blog is an asset that can earn money when you’re even sleeping. If you put hard work into it, you don’t need to go and find a daily 9-5 job. For most of people who are new to earning money online or who have never experienced receiving a paycheck for their online work, this may sound crazy. Many bloggers are earning money online in different ways. They have even quit their jobs a long time ago and now do it full-time because they earn good money from it.
2. Earning from dropshipping- The Internet has opened up lots of opportunities to earn money from your home. Dropshipping is one such way to earn income working from your home.
3. Affiliates- If you don’t have any product to sell, you can become an affiliate to reputed vendors and earn commissions when you sell their products. You get paid a fixed sum on every sale.
4. Stocks and mutual funds- Along with appreciation in values, they also earn dividends which is often a type of extra income without your active involvement. Many people have become rich investing in stocks and mutual funds (We don’t give any advice on it and neither we recommend what types of stocks or mutual funds you should have in your portfolio. It is only for your information).
5. Index funds and other types of funds that are managed by professionals- Index funds appreciate over time with fewer expenses. They also earn money without your participation. Professionals work for you there.  

So, a passive income is a wonderful way to get rich and get most of your time and money in comparison to other income streams where you have to be present. So, which one do you think is a good income stream?