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3 Ways to Set Up a Passive Income

By Nisha Pillay - Nov 26,2021
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Billionaire investor Warren Buffet said, “If you don’t find a way to make money while you sleep, you will work till you die.”

Make money while you sleep? Doesn’t seem realistic, does it? But what if we tell you that it is very much possible to have a regular income without actually working? This is where passive income comes into play.

 

What is Passive Income?

Passive income is often confused with a side hustle, but they are two separate ways of earning extra money. Passive income is a steady stream of money that is earned through investments or work that has already been completed. Unlike active money that is earned from your typical day job, this income is usually earned by putting in little to no effort.

Here are the top 3 passive income ideas that can get you continuous cash flow.

Investing in Mutual Funds

Again, a high ROI instrument, investing in mutual funds is an effortless way to build your passive income stream. Once you determine your risk appetite and investment capability, you can start a mutual fund with as little as Rs. 1000 per month. The higher the investment and the longer the tenure can ensure that you get maximum returns. Most financial institutions have dedicated consultants who guide investors towards the best mutual fund options.

Fixed Deposits

One of the most trusted models of saving, bank fixed deposits are a sure-fire way of getting a lumpsum amount of passive income. If you’re unwilling to take risks, starting an FD is the safest option for creating a fund that requires no effort. With almost all banks offering the option of starting a fixed deposit online, the need for stepping into a bank is completely eliminated.

Generate Rental Income

Investing in a property nd leasing it out s one of the easiest ways of generating that extra income. With that initial investment needed to buy a land or a property, you can rest assured and have a consistent flow of money via rents. This passive income way is arguably one of the best ways to earn money without having to put in a lot of effort.

Put Your Passive Income to Work

Earning a steady passive income is not enough if you’re one of those people like me who’d want to get rich – fast! Once you’ve determined the right passive income model and have a regular source of income from these, you should then re-invest this passive money to gain higher returns. Making your extra cash work can ensure that you are making money on top of the extra capital you’re earning.

A recurring and sustainable passive income flow can not only help you achieve your financial goals but also can be an excellent emergency fund. The right investment options can help you in cases of a medical condition or even a job loss.

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