Passive income – ways and sources of income, types and ideas of investment

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Improving well-being is a natural desire of any person. However, for the rich and for the poor, there is a limit that the work establishes; there is a ceiling on the level of salary or pension. One of the ways to overcome it is passive profit – from automatically occurring operations.

What is passive income?

In contrast to active (linear) profit, residual income does not require constant action from the owner. A well-established scheme of passive earnings will bring money independently and constantly. Unlike daily trips to work, where a person does not need financial investments, building a source of alternative income requires one-time material and intellectual efforts.

Actually, passive profits in Russia, for example, include:

  • investments in securities;
  • rental of real estate, machinery, transport;
  • obtaining interest income from a bank account;
  • royalties for intellectual property;
  • selling your own ideas;
  • the provision of Internet sites to third parties.

How to create passive income from scratch

The desire to make a profit and gain financial freedom is the most natural of all possible. However, here lies the main problem for lazy people – creating passive income from scratch requires material, financial or intellectual investments, depending on the chosen line of business. However, even without a minimum of tangible property, you can organize regular income and put it on stream.

Coins and tree sprout

Sources of Passive Income

In the desire to receive money and do nothing, the main thing is not to get lost among a huge range of opportunities. At first glance, it may seem that there are not so many: investments, rent, copyright. In fact, only on the Internet there are more than 100 different types of options to earn money. The list will indicate the main ways of passive earnings for the average person:

  • index funds specializing in metals, energy, developing technologies;
  • advertising: you can make a video blog on any popular video hosting;
  • rental housing / car;
  • passive marketing – distribution of third-party advertising on its site;
  • investments in high-yield securities;
  • write an e-book (you don’t even have to spend money on publishing);
  • organize or join a ready-made passive business partnership;
  • professional recommendations and advice – create online courses, a textbook, articles or maintain a thematic blog.

Smart investment

This method of income can be considered the simplest and most undemanding. All that is needed from the investor is to choose the direction of capital injection. Investing in intellectual property has been profitable for many decades. The difference from any tangible forms of ownership is enormous: intangible objects of ownership are not subject to obsolescence and destruction, are easily reproduced / copied.

With this method of investing, the following options for owning property are possible:

  1. Ownership of rights to a unique trademark, logo, design layout or style concept. An example is promoted brands like McDonalds, MTS or Beeline – everything is covered by copyright: colors, slogans, logos, even design schemes for company stores.
  2. Purchase of a patent right for an invention, technical tool or technological method of production. The term of a patent under modern law is 10 years with the right of subsequent extension.
  3. Creating your own educational or artistic products. Profit is possible not only from authorship, but also from the distribution of material or digital copies of the product.

Check out the online patent calculation and purchase service..

Marketing investment

The essence of this method of investing is to create your own business project that will be interesting and necessary for a specific target audience, establish a management chain and ensure functioning that will require minimal impact from the owner. This is the creation of your own business with subsequent profit. Such business plans with creativity can be created constantly, gradually selling them in the form of clean projects, and receive additional income from owning an idea.

Revenues from marketing begin to bring real profit only after the initial investment has paid off. This means that you can’t get fast money in this way. Depending on the field of activity, the yield on residual income may take several years. If the business is in demand and properly organized, then in time you can enjoy profit with minimal impact on the process.

Man with tablet

Real estate for rent

Almost every resident of the country who owns unused space rents it out. There is no fundamental difference – the source can be an apartment, a house, an office, a plot of land, a warehouse and even a factory. Passive income from real estate is that the owner makes a profit when another person uses his property. In the modern world, this is the simplest and most effective option for making a profit without additional capitalization (provided that you have unused private real estate).

Income from financial investments

This type of investment refers to risky and volatile processes. Investing in securities, precious metals, precious stones and other analogues of the money supply is profitable in the presence of start-up capital. At the same time, passive investment income will fluctuate after the mobility of the stock market. Sudden ups and sharp drops following political actions and the appearance of new players on the exchange are possible. At the same time, there will always be profit, since there are no analogues to monetary relations yet.

Separately, it is worth mentioning investing in shares of developing companies. It is extremely risky to invest in an AO with an unpredictable future. You can either lose all the share capital, or instantly get rich (as was the case with Microsoft). In any case, you need to carefully assess the risks. Even regular market players can suddenly go broke for one reason or another..

Passive income with investments

To obtain a guaranteed income required minimum financial investment. In this situation, almost 100% is guaranteed at least a return on money spent in case of unsuccessful investment (you can go to zero). Types of passive income with initial capital – investing in a bank, securities, Forex (PAMM-account), mutual funds. Profit is calculated from the number of assets invested initially.

Deposit income

If the owner has a liability in the form of cash that is not claimed, he can put it in the bank at interest and make a profit. Deposits can be called the most profitable investment for residual income. The main thing is to verify the reliability of the bank and determine the terms of the contract. Bank deposit income will be determined by the specifics of the deposit – replenished or not, with interest capitalization or permanent, with the possibility of withdrawing money before the expiration date or closed.

Man counts bills and coins

Revenues from mutual funds

Mutual investment funds have become popular among investors because of their profitability with full legality and proper use of capital. The essence of these organizations is simple – there are a number of equity holders who have invested their funds for the general cash desk (not legal entities and not banks). The management company seeks to increase capital, from which interest will be paid to shareholders. This is a kind of cooperative for profit. Profitability of mutual funds directly depends on competent management and successful investment.

Flower Business – Passive Income

This example will well illustrate the implementation of marketing investments. A passive business makes a profit after the owner adjusts it to the point where its constant intervention is not required. For example, for the flower business you need to find a supplier, florist, equipment and premises. If these factors interact normally, then it remains only to make a profit and sometimes make adjustments.

Another modern original source of seasonal alternative income on flowers is the rental of bouquets for the holidays for photos. No matter how funny it may seem, in 2016 one of the owners of the flower business in 2 bouquets with a total value of 5,000 rubles made a profit of about half a million in less than a month. So even a seemingly permanent business can bring a one-time income.

Passive earnings without investments

One of the most popular queries on the Internet for a segment of work in Russia. This does not mean that the country has a large number of loafers. In a crisis situation without a material base it is very difficult to start earning. The ideas of passive income on the network are widely known, but it is important to remember that the number of scammers is several hundred times greater. You should carefully choose the method of passive earnings on proven sites with real recommendations and reviews..

Passive earnings on the Internet

To start making money through the network, you need to exist and understand it. Passive income online is based on the fact that a person owns his website, blog or just a channel on the hosting. Further, there are two options for making a profit – advertising, selling your own finished media materials. All the rest (affiliate programs, investing, selling link masses, etc.) require direct participation, therefore it is no longer possible to call them passive.

Dollar bills on laptop screen

Network Marketing – Passive Income

Any network marketing is a peculiar way of making money, which is criticized by many. People with a certain mentality and character will be able to successfully work in this area. Initially, SM is direct sales, and there is no talk of any residual income. Take for example Oriflame. The seller invests in the purchase of goods and reference books, pays for seminars and courses, receives profit on resale (at the same time it is fixed by the company). Passive income in Oriflame begins from the moment when attracted customers start working for the seller (they themselves start selling).

At this point, non-linear revenue begins in any network structure. At its core, SM is a typical pyramid scheme where you need to hire even more workers for profit. At the same time, someone is already making a profit from you, out of your interest. Paradoxically, there is nothing for passive workers in this field of activity to do. You will have to work hard until your final income..

Passive Income Games

Making money on the game is the dream of any active gamer, because a hobby that brings money cannot but rejoice. In the current state of the network, the income of online games (popular and in demand) allows active players to earn real money. There are a huge number of online sites where they sell virtual things from games for real rubles. This business is developing rapidly and inevitably..

New network – games with real payouts and passive earnings. Most of them are primitive in appearance and are an offshoot of an investment fund or company. Obviously, this is not advertised by anyone, but such game projects not only increase basic capital, but also depersonalize it. In such games, the player’s activity is minimal, but the profit is also negligible. To speed up the process for real money you can buy special tools, and the costs are offset by game progress.

How to organize passive income

First you need to really want to get more money and decide on the scope of activity. The organization of passive income on direct capitalization requires minimal financial education, the marketing approach requires a ready-made business, and the intellectual approach requires creative thinking or specialized knowledge that is required. After setting the task, only legal registration remains (even for games there is a registration and an agreement with the terms of the turnover of real money). On this active activity can be considered completed.

Coin put in a piggy bank

Passive Income Tax

In most cases, the tax on passive income is already included in the settlement process upon receipt. This means that dividend income will be credited to the account already with a deductible tax percentage. However, when filing a tax return, all types of income must be indicated. Almost all of them are taxed at a rate of 13% in Russia. Difficulties arise with patents and intellectual property licensing – the tax rate is calculated separately for each specific case..

Selling passive income

The easiest way to sell a business with passive income. The seller increases the cost by the amount of potential profit for a certain period, and then follows the standard procedure. It is more difficult with non-linear methods of income through the network – for this process, legislation is practically not developed. Therefore, when selling a serious source of residual profit through the Internet, you need to attract specialists. Securities are traded through specialized brokers.

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