Sources Of Passive Income

Nowadays, it is difficult to find sources of income. The gap between the rich and the poor is widening. Some say that if you work hard, you will always have income to survive. But what will you do if it is really hard to find a job? Actually, even the rich find it hard to keep their income. However, this is less of a problem for some who know where to find sources of passive income.

So, let us define passive income first. Passive income is a type of income earned from investment. There are two types of income - active and passive. We earn active income from the result of our labor. Salaries, commissions, and service fees are sources of active income. What are the sources of passive income? Sources of income have different forms. Some popular sources are: dividends, interest earned, rent, sales, land, equipment, and money itself.

DIVIDEND:

Dividend is earned from the net profit of a company. It is a form of profit sharing and it is more common in the stock market. When a company is owned by several people or more, the profit is divided in proportion to each owner's investment. These owners are called shareholders and such a profit is known as dividend. Dividend can be cash or stock. It is a cash dividend when the profit is distributed in cash through bank checks. And it is a stock dividend when it is distributed in the form of shares or stock. As one of the sources of passive income, dividend is also attractive especially during the period of growth. Not all companies give consistent dividends. It is important to remember that stock selection determines your future income. If the company selected is proven to give higher dividends, there will be a big possibility that it will continue. Most companies that consistently give higher dividends are called income stocks. Income stocks may not be large companies. In fact, even some large companies fall short in making consistent dividends due to their high cost of operation. So, not all stocks are a sure bet as one of the sources of passive income.

Among the many sources of income in the stock market is an "income stock" which is dependent on their good industry environment. For instance, if the IT industry is very attractive, any IT company can be a candidate as a source of passive income. This means that it is better to choose from those companies than to pick a very large company of which the industry has been suffering from economic turmoil. Therefore, a good source of passive income in the stock market is a company from a good industry.

  INTEREST  EARNED:

Interest earned is also prominent as one of the sources of passive income. When we deposit our money in a bank, our money earns interest rate. What is interest rate? Interest rate is the percentage charged when we borrow some money and it is earned when we lend. Although we are not necessarily a lender, we can also earn this because our money that we have deposited in a bank contributes to the amount that the bank has lent to borrowers. Of course, there is a condition before we consider our deposits as sources of income.

We can consider our savings to be a true source of passive income. This only happens when the interest rate is high and our deposit is in significant amount. Time deposit or bank bonds are examples of passive incomes. Savings account, too, can be one. Banks differ from one another in interest rates. So, to get an attractive income through the banks, we should choose the right bank and deposit at the right time when the interest rate is high.

  RENT AND LEASE:

Sources of passive income are numerous and complex, but the easiest one is through rent or lease. Everybody knows without any explanation that income we get from having our property rented or leased has proven to give us a reliable source of income. If you have an extra house and lot or a unit of apartment, you will only need to get somebody willing to occupy the place. Your sources of passive income here is not actually your property but a reliable tenant who can pay the rent consistently and can stay longer. The only consideration here is the profile of your tenant. If your property is a commercial lot, you may have it leased to those business people putting up a restaurant, a gas station, or a warehouse. The profile of your tenant here is more credible than the household ones. Commercial lot tenants will surely stay longer. This can actually become your concern because this type of investment is not liquid. It is a long term investment. Nevertheless, many of us will consider this as one of the best source of income.

Investment in transportation service however is hardly considered to be one of the potential sources. The risk involved here is high. But if you are just an ordinary individual who owns one or two units of taxi cab, it is good to rent them out provided that you invest a little in your vehicles' depreciation.

   SALES:

Buy-and-sell business can be some sources of income depending on the items or goods you trade. The bigger the things you trade, the more passive the income becomes. If we trade smaller things, that's marketing and a good source of active income. But if what we buy and sell our cars, houses and lots, stocks, and bonds, they are definitely great sources of passive income.

   LAND:

Land is the best source of income. It does not have to be from renting it out. Since time immemorial, it has been the most reliable source of income. In the past, fertile land could produce crops, trees, plants and grains without human intervention. Even livestock and poultry were products of fertile land. All these things that land could produce were sources of passive income. Such circumstances are still true until now, but with little intervention.

   EQUIPMENT:

In the country, equipment has become one of the sources of passive income.A rice mill is the most popular equipment that you can live off on the farm. During harvest season, farmers line their sacks of rice to a milling station. A rice mill owner will earn a certain amount per sack. After harvest season, the cash flow of rice mill owners is a lot healthier than that of the farmers. During this post harvest season, rice mill is hardly necessary. However, some other crops and grains are in demand of other kinds of equipment. For peanuts, shelling machines and graders are in front. Other kinds of equipment in the farm are farm tractors, grinders, and dryers.

Even in the city, equipment is one of the good sources of passive income. Heavy equipment used in construction can be rented out to contractors and developers. If you are an average person, you can acquire a vending machine. A vending machine is being rented. You will actually earn from your sold products. But it is considered to be a passive income because it is your machine that works for you. The most popular and the most heavily rented equipment found in the city is the printing press. This is a business and at the same time an investment.

Now, we see that there are really many sources of income. Instead of spending so much money for consumption, it is wise to invest it on something that can give us income to spend. Our active income is something that we should save and our passive income is the one that we can spend. Therefore, our wise decisions are also sources of passive income.

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(edit: Russell Pittock - 10/11/2018 )

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5 Best Investments For Beginners

The adage goes something like 'the best time to start investing is now.' For some beginners, this can be painstaking, considering the volumes of information on the best investment with guaranteed returns. Other beginners will think this is an easy way to make a quick buck and plunge head first in the markets. 

This post is for the amateur investor who is ready to make a strategic decision to safeguard their investment against exposure to unsustainable risk, but with enough latitude to pursue conservative opportunities that yield capital gains, and learn the ropes of the trade while at it.

Apart from the theoretical understanding of how the financial markets operate, it is imperative that a beginner gets a realistic feel of the different strategies investors employ in pursuit of opportunities in the markets.

The following is a detailed explanation of five best investment approaches suitable for beginners:

1. ETFs

Exchange-traded funds (ETFs) offer a less rigorous opportunity for participating in the stock exchange. As a beginner, investing in ETF is ideal because an ETF pools together several assets including particular stocks, commodities and bonds, and the performance tracked against an index. ETFs allows you as the investor to trade several assets commonly as if they were a single stock. The diversification of the ETF enables beginners to access a broad portfolio of stocks and bonds providing the convenience and reduced risk. Consequently, the flexible nature of ETFs allows an investor to trade flexibly, with the choice of buying and selling at any time during regular trading hours.

2. Mutual funds

Mutual funds are pooled investment vehicles ideal for beginners because of its two primary characteristics. First, a beginner is able to access the services of a professional trader in the name of fund manager despite the meek amount of capital, some as low as $25. Secondly, the investor is exposed to minimal risk because mutual funds, like ETFs, invest in a diverse asset class portfolio of stocks, commodities, and bonds across different markets and industries.

3. Individual stock

After a detailed analysis of the past performance of an individual stock and the prevailing facts, individual stocks can offer a stable investment opportunity suitable for beginners. Caution should, however, be placed to ensure that the investment into the particular stock does not upset the risk tolerance level of your portfolio in case of a negative turn of events. Markets is not always predictable.

4. Certificate of deposit

Depositing money in a bank over a specified term length with a fixed and guaranteed return of capital plus interest is a sound investment opportunity for a beginner. Certificate of deposits is insured and hence the capital plus interest are guaranteed to the investor at maturity. However, it is important to understand that access to this money is limited during the stipulated investment term length and may attract fees or loss of interest in case of withdrawal.

5. High Yield Savings Account

This investment also entails saving for the sole purposes of earning capital gains from interest over a specified term length. However, unlike the certificate of deposit, the interest is not fixed and hence interest is according to the prevailing market rates. Funds in this account are however more liquid hence easily accessible.

Chris Bouchard is a strategic consultant who works with non-profit leaders and social entrepreneurs to apply concepts and techniques to identify complex strategic issues, find practical solutions, and devise strategies to create and win a unique strategic position. He also offers project development, proposal writing, and project evaluation services.

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Generate Passive Income

An average person can generate passive income in many ways. This means that it is not only the rich that can generate passive income. Everybody can but not in the same way. For an average person, his salary is the only source of income he can generate. Beyond his knowledge, it is also possible to get some extra income even without trying to start big.

Our salary is precious to us. But aside from our salary we can earn a decent amount from what little money we have. The first thing we should do is to save money. Saving money requires discipline. Around us, there are many things that force us to buy what is beyond our immediate need. We must agree that to generate passive income, we need enough capital. We are just confused how enough is enough. Whenever our income increases, we tend to spend more, too. This is the biggest challenge to generate passive income.

We don't necessarily save all our hard-earned money to raise the needed capital to invest. What we need is to calculate the cost of our daily necessities and identify the priorities. More often than not, we prioritize which we should spend for. To generate passive income has been forgotten by many as the first thing in mind. If we set aside a little every time we receive our salary, such money will become big over time. It is easier said than done. However, that is not a hard thing to do. Our first priority must be to generate passive income.

Usually, we believe that only a big capital is able to generate passive income and it is beyond our limit. Perhaps, it is true. It is true if we continue to believe so. These days, everything is possible. Long time ago, we had to prepare large amount of capital because the required minimum capital for almost all types of investment was also large. Nowadays, the internet offers many options to generate passive income.

In stock market, we can start trading if we have at least $2,000 or even less. If you choose to invest in stock market for a little amount of money, the dividend will not be much attractive no matter how good the company is. However, you can generate passive income through buying and selling of stocks. There is risk involved in trading stocks. But if you are very familiar with the basic tools on how to manage the risk, stock market will be very much exciting and promising.

If you are a conservative type of investors with little amount of money and who are willing to wait for long, you may choose a managed portfolio such as the mutual fund. In mutual fund, you can put your money in and pull out any time you prefer. The minimum capital is not large, either. Your money invested is pooled together with the money invested by many individual investors. This money is the fund being used to invest in different portfolios of investment. You may generate passive income here through stock valuation and through stock dividends of the fund's portfolios. When the fund grows, you money will, too.

Now, if you are a risk taker who wants to take advantage of the profit potential of a volatile market, you may also trade currencies for as little as $500 or even less. To generate passive income here, you must be a carry trader type of investors who speculate a long-term bull trend and earn from a currency's roll over rate while enjoying your price margin or floating profit. But this is only true in a very good market condition. In this type of investment, only 5% or so of those who try become professional traders. It doesn't mean that it is impossible to earn here. In fact, currency trading has the highest profit potential due to high leverage. What actually this market requires is a deep understanding of the underlying fundamental and technical reason why a certain currency moves in one direction. In other words, skills are required here. On the other hand, this is the cheapest way to generate passive income. It is also the most liquid market you may invest in. But this is the least passive of all types of passive income. Investment here is neither dependent on the market, nor on a currency. It depends on you and what kind of trader you are. If you choose to generate passive income here, you should try a demo account first in order to test your trading strategy before investing in live account.

However, there are still many of us who resort to the traditional way to generate passive income. One can put up a food cart business, or buy a car to make it a taxi cab. If you already own a small unit of apartment, you can have it rented. You may procure some cheaper sports equipment and put up a gym in your community. Business is by far the most popular source of income. The problem is that most people try the same. Thus, competition gets even tougher.

A food cart business can be a very lucrative option to generate passive income. Inside the malls, a lot of food carts line up. One may think that such a business is not permanent. Surprisingly, these small carts have been growing in numbers. To operate such a business is not really difficult. Since it is small, the operation is simple and the cost is less. But it sells like hot cake.

Operating a taxi cab is as easy as ABC. The ideal circumstance in this is when the taxi unit is 100% owned by you. This alternative source of income is suitable for those who already have at least one fuel-efficient car.

An average person who has inherited a small house and lot or an apartment unit may rent it out to generate passive income. The proceeds from renting out your apartment can be used to pay another housing loan. Such a system is for a long-term investment. Using our properties to generate passive income for longer investment is a wise decision we can make. Using them to earn a living can be short-lived because our property depreciates overtime. Though the value of land is appreciating, structural maintenance is costly. Aside from that, tenants may come and go. So, you have to be more creative in utilizing your possessions.

You can also convert your property to a fitness gym. Sports equipment depreciates very slowly. Nowadays, many people are crazy about health and fitness. There is a big market for that and this industry has been growing consistently. As our society becomes more and more stressful, people give more and more emphasis on coping up stress. Such a growing demand is a good opportunity to generate passive income. While your customers pay for the energy they consume, you are paid for the less effort you exert.

Now, there is also an alternative to traditional business. This business is known as online business. You may create and sell digital products. All such transactions are now done online. There are wide varieties of online businesses you can choose from. What online business requires is your creativity. Everybody here is doing everything to drive the traffic to their sites and that will force us to think of better strategies. Though the competition is tough, the room for growth is big. What is important is that you can start here any time with less capital and less risk.

So, for an average person looking for an opportunity to generate passive income, options are always available. Let us not forget that we should first study the things we want to do before we start doing them. Everything is possible for everyone everywhere and every time.

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What Is Passive Income And Wealth Building?

Have you ever thought of keeping on 'earning money while doing nothing'? Isn't it a great idea? O yes, it is. All of us want to earn and keep on earning money in abundance without doing a job or work. Some people may feel this thing like a dream, not reality. But, it is quite possible. However, it needs a lot of intelligence, smart work, the right usage of time and energy, experience and knowledge, and a long journey, no doubt.

Today I'm going to talk about passive income and wealth building. There are two types of income: active, and passive. Active income needs you to keep on working constantly like a regular 9-5 job. If you are jobless or fired from the job, unluckily, you will stop getting paychecks. No work; no paycheck. It is that simple. On the other hand, passive income doesn't need you to go to office daily and work for 6-8 hours.

So, how is it possible to have money in abundance and coming continuously while staying at home and having fun? For this type of income, you need to build assets and wealth, like:

• Purchase a property, plaza/shop/mall etc. and rent it out. You will get a handsome amount of rent money every month.
• Set up a gym, beauty salon, wellness club etc. and hire a team of professionals to run it. Your team will work and earn for you.
• If you have writing talent and can write good books, you can earn money with this talent. Once you write a book, you will keep on earning the royalty as long as the book is on sale. Amazon online book store gives you an opportunity to publish your book there free of cost.

These are a few ideas for earning passive income. But the ideas of purchasing a property and setting up a gym/beauty salon/wellness club needs a great investment. And the idea of book writing requires a great writing talent. Investment and writing capability is not possessed by all of us. Therefore, all the three ideas are not possible for everyone. So, how can you earn passive income and build wealth?

One of the easiest and the most feasible ways of building wealth and assets, and creating a source of passive income is to join a Direct Sales and Network Marketing company.

First of all, let me give you the idea what Direct Sales and Network Marketing companies are:

A direct sales company sells its products through individual distributors. It has authorized shop/dealers to run the business. Its products are not available on retail stores and common shops. You won't see any type of advertisement of the company and products on media. If you want to have their product(s), you need to join them as distributor or purchase through any authorized distributor. That's why, it is called direct sales company.

You join such a company through a distributor who performs as a 'sponsor' for you. He/she introduces you to the system and products, and you join as his/her 'downline' or 'network'. An authorized distributor can spread his/her network to thousands of people by sponsoring them. When you join a company under one's sponsorship, you too become an authorized distributor. Then you also invite new people for purchasing company's products and join it also. The bigger the network grows; the more you and the company earn. If you have an initial network of three people, they will make their network of three persons each. That way, you all will grow. Each of the individual distributor will get his/her own profit as well as a fixed chunk of the sales done by the 'downline'. That's why, it is called a network marketing company. Generally, all the companies in this category work on both the models: direct sales and network marketing.

If you want to join such a company, first of all, do research about the Network Marketing companies in your state/country. Have answers of these questions first of all.

• Which field you like the most and the feasible one for you? Like there are the fields of health, food, fashion accessories and cosmetics, electronics etc.
• How much time can you spare for it like a few hours daily or weekends only?
• What skills and right strategy do you need to achieve success in the respective field?
• What talent and characteristics you already possess and can polish to help you in the work, for example, do you have presentation and communication skills?
• What products you are excited about; you need and want to use yourself?
• Are the products beneficial and interesting enough to persuade common people to use them?
• How much time you need to start earning, a few months or more than a year for example?
• What is the company's compensation plan? How much can you earn on monthly basis?

Don't forget to check out the rules and regulations of the company you want to join. This is very much necessary for avoiding any misconduct and breach of rules.

21st century is called the century of Direct Sales and Network Marketing business. The beauty of this business is that it doesn't need a business administration degree, huge investment, and hiring an office building etc. It just needs determination, a burning desire for freedom of money and time, willingness to learn new things, and a strong will power to do anything to achieve success. Direct Sales and Network Marketing companies give you training which won't be free of cost. This training is going to let you know how to work as a distributor and develop a network.

Around the world, there are hundreds of Direct Sales and Network Marketing companies. Some are working on country level and some on international level also, allowing any person of any creed, color, religion, and nationality to join. This is declared a superb source of passive income and wealth building. A few of the initial years are tough but after that, you have to do nothing. Money will automatically come to you.

If you want to have a great source of passive income, join a Direct Sales and Network Marketing company in your area.
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Rizwanaa Shaikh is directly involved in network marketing business. She closely follows network marketing trends and can be contacted for any relevant assistance on Twitter: @Rashwriter.

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