Passive income is the dream of a huge number of people. Many are trying to come up with and implement schemes that would provide stable profits without the participation of the creator. And some even succeed.
In this article we will talk about how to learn how to make stable passive income on the Internet.
Is it possible to earn passive income on the Internet without investments?
Indeed, a large number of people have achieved their dream - they have learned to earn passive income. But when other people look at them, they only see the tip of the iceberg. They see online entrepreneurs or investors who do not work, travel and live for their own pleasure, but at the same time they lose sight of how hard they came to such a life.
I want to disappoint those who believe that there are reliable and highly profitable ways of passive income without investments on the Internet that are accessible to beginners - there are no freebies on the Internet. In order to receive money on the Internet you need:
- To invest money.
- Invest your own time.
- Invest in self-education.
In order to increase your chances of success, you need to use all these 3 points. Success will directly depend on your diligence and determination.
How to make passive income on the Internet?
Yes, passive income online is quite possible. But we found out that without investments nothing will happen. The more money you want to earn in the future, the harder you need to work in the beginning.
To be honest, completely passive income is unlikely. But, at a minimum, you can delegate all your responsibilities to hired employees, devoting only a few hours a week just to analyzing your earnings.
Below we will look at the 7 best ways to earn passive income using the Internet.
1. Selling advertising on the site.
One of the most common ways to make passive money on the Internet is the creation and promotion of one or more information sites. This method has several advantages:
- High probability of making a profit. If you do everything correctly, then getting the required number of visitors is easy to predict and achieve.
- Stable results. If the site was promoted by “white” methods, then it will attract visitors without the participation of the owner for one to two years. And with minimal administration and updating for many years.
- Simplicity. Achieving results in promoting an information site is not very difficult. There are proven step-by-step instructions that will allow you to achieve results without professional SEO skills.
How to make money by selling advertising from the site?
One of the simplest and most effective ways to make money on a website is to place advertising blocks from Yandex and Google on its pages. You can see these blocks on most information sites that are presented on the Internet.
In these blocks, advertisements will be shown to site visitors, depending on what queries they entered into search engines and what sites they visited before. This means that this advertisement will be relevant to visitors, which will ensure a high probability of clicking on the ad.
As soon as a visitor clicks on an ad, a certain amount is debited from the advertiser’s account, which is divided in half between the advertising network and the site owner.
Earning money using contextual advertising greatly depends on the theme of the site and on the number and location of advertising blocks on the page. On average, from a resource with 1,000 visitors per day, a webmaster can earn about 3,000 rubles per month.
- Selling links.
Search engines actively combat the buying and selling of links. The result of this struggle was that the market for rental links was practically destroyed.
But perpetual links are still one of the most effective tools for website promotion. Therefore, a huge number of SEO specialists are ready to line up to buy a link from a quality site.
In order to sell a link, you need to register in one of the eternal link exchanges, for example: Miralinks.ru and Gogetlinks.net, or sell them directly by posting information about it on your website.
Miralinks link exchange.
- Direct sale of banners.
2. Earning money from affiliate programs.
Another highly profitable way to make money on the Internet is affiliate programs. The essence of affiliate programs is simple – attracting potential clients through referral links.
Many companies create multi-level affiliate programs. This means that if the referral you attracted attracts his own referrals, then you will receive money from the company for this. Under such conditions, you can count on passive income, because the more partners you attract, the more money you will receive from their partners.
Where to find referrals?
3. Investing.
We can say that earning money through investments is the most passive. After all, the very concept of investing is that your money works while you rest.
For those who want to try to invest their money and receive stable income from it, I have collected in one article all the best ways to invest and compared them with each other:
In fact, becoming a successful investor requires knowledge and experience. Therefore, for a beginner, it is recommended to choose the least profitable and least risky ways to invest money.
4. Passive income on social networks.
As with your own website, you can earn income from affiliate programs by selling advertising if you have a well-promoted group or account on social networks.
With today's competition, it is unlikely to be possible to do this for free, because social networks impose a limit on the number of free additions to friends or invitations to a group.
How to recruit members to a group on social networks?
5. Passive income on YouTube.
You can make money on YouTube by receiving money for views, selling advertising on your channel, or by placing referral links.
The first way to fill your channel with content is to shoot videos yourself. You don't need professional equipment for this. You can make high-quality videos using a regular smartphone.
How you record a video depends on your topic. You can simply record your screen. At the same time, you can film your face on a webcam and display it in the corner of the video.
You can also make your video as a presentation. Record your voice separately and add it to your slides using a standard presentation program or video editor.
6. Internet business.
Another way to make passive money on the Internet is to create and automate a business. The Internet makes it easy to automate business processes, which makes it easier to earn passive income.
Of course, at the first stage you will have to actively participate in the promotion and creation of your online business. But gradually, you will be able to devote less and less time to it, while receiving a stable income.
What types of Internet businesses exist?
- Online store.
In order to create an online store, you do not have to rent a warehouse and fill it with goods. You can use dropshipping and sell products that are in stock at another online store.
To do this, you need to create an online store. After this, agree with another online store that you will regularly buy goods from them and agree on a discount for what you will constantly buy.
After that, fill your website with products that are posted in your partner online store. Set approximately the same prices and start attracting visitors.
To attract visitors, you can use SEO optimization, contextual advertising, social networks, etc. After a client orders a product from you, you will buy it from a partner online store and resell it to the client, earning a discount.
You can arrange delivery yourself or arrange for a partner online store to send the package on your behalf.
- Services.
You can choose any service, even if you don’t know how to do anything. You can engage in design, legal services, repairs, etc.
To do this, you need to create a selling website or group or account on social networks. After that, find a specialist in the field in which you decide to create a business. You can hire him for a salary, as an employee, or take him as a partner.
After this, you will split up: you will promote a site or group and generate a flow of clients. The specialist will perform the work by providing services to clients.
If you cannot find such a specialist, then you can come or call any company and offer to attract additional clients to them, receiving a reward for this.
- Service.
To do this, you need to be an expert in the field in which you plan to build such a business. This could be access to a closed database or a useful service that solves a user problem.
- Infobusiness.
Selling information via the Internet is one of the most profitable ways to make money. The fact is that the monetary costs of creating information products are minimal, and they can be sold an infinite number of times.
The most common type of information products are training courses. In our information-overloaded times, it is becoming increasingly difficult to sell information. But with the right approach, this type of income is still very profitable.
7. Newsletter.
Many businessmen note that email newsletters are the most effective and profitable way to make money on the Internet. But we are not talking about spam, but about the case when users voluntarily leave their email address.
You can collect a subscriber base using the subscription form on the website, advertising the capture page using paid advertising methods, changing the e-mail with some useful information, etc. And the mailing is carried out using special services, such as Mailchimp.com, Smartresponder.ru, Justclick.ru, Getresponse.ru.
In order for subscribers to willingly read your newsletter and not unsubscribe from it, you need to send them useful information in 70-90% of your emails. And only 10-30% need to send letters with advertising or a call to buy.
Concerns a lot of people. The explanation for this is very simple - everyone would like to be able to earn money without bothering with any work. This is the idea of passive income - getting money without working.
The desire to start looking for such a “source of money” especially intensifies during periods when a person encounters difficulties at his main job and understands that he does not want to spend his whole life engaged in routine shuffling of papers, but would like to devote more time to himself, his family, relaxation and self-development.
In this article we will try to describe the most accessible passive income business ideas. Perhaps those who read it will be inspired and find their own source!
Rental
One of the most popular and simplest, perhaps, is income from rental property. This idea is elementary in terms of resources for organizing such income - it is enough to find tenants for the property that you own. On the other hand, the difficulty is, firstly, obtaining ownership of what you would like to rent out; and secondly, achieving profitability. Let's explain in more detail.
A great idea for passive income is renting out an apartment in the city center. What difficulties might there be? Firstly, not everyone has such a property. This is the main problem. Secondly, if you have such an apartment, you need to find a tenant for it. Thirdly, this person should be offered a rental rate that he could afford and, moreover, that would be profitable for you. This should also include the costs of cleaning the apartment after the tenants move out, as well as depreciation costs.
In the apartment example, everything looks quite simple - it is for this reason that today so many people are engaged in such activities. Let's take, for example, a more complex object - some non-residential premises located on the outskirts of the city. It will not be easy for you, as an owner, to find someone interested in such a property.
However, to receive such passive income, you can sublease something. This is, for example, when you rent an apartment monthly and rent it out daily. The benefit received is the difference between the rent and the money returned to the owner.
Copyright
A good passive income can come from the creation of some unique protected object. For example, it could be a musical composition, a computer program, a film or an image. With the protection of music rights, of course, everything is very bad in our country - copyright holders can only make money at concerts. Films make money from theater royalties and television channels buying them. But with a program or picture everything is simpler. In the first case, you can, say, start selling copies of your development directly on the Internet, receiving money for each installation. In the second, by posting an image on photo hosting sites, you will also generate real passive income.
Ideas don't end with these objects - you can come up with something to patent it and live on royalty payments for its use.
Starting a business
Of course, another fairly common way to organize passive income is your own business. It could be anything - a store, a cafe, some kind of service provider, and so on. The advantages of this idea of passive income are obvious: by creating one working business and hiring the right staff, you can step back a little from control over it and engage in parallel development of other projects. Thus, we can talk about increasing the scale and growth of your income.
The disadvantage of owning your own business is the high level of risk and a lot of difficulties that novice entrepreneurs face. Also, we must not forget about the starting capital, which varies depending on what you would like to do. However, this is a topic for another article.
Online project
The development of the Internet has led to the emergence of another large and global area for business. Now everyone can start their own business online. It is noteworthy that the cost of creating such a business can be much lower than investing in a real business. But at the same time, you should not hope that working on the Internet is easy - the competition here is no less than in real life. But by launching a successful project once, you can get guaranteed passive income.
The ideas of what kind of resource this could be (news blog, service, catalog, store, etc.) are unlimited.
Investment
Another obvious passive income idea is investing. There are several disadvantages here - high risk and the need to have money for investment. Assessing the degree of risk, the investor makes a decision about where he would like to invest, after which he begins to receive dividends. The latter is the whole point of the idea of passive income.
Ideas for passive income in a small town are just as relevant as in a metropolis. Investing as a tool for passive income pays off everywhere and always; the main thing here is to correctly assess the likelihood of making a profit or losing money. This depends on the area of investment.
conclusions
Of course, the best passive income ideas always remain unknown to the vast majority of people. And only those who have them and who implement them begin to use them. This, on the one hand, is bad for those who do not know what to do to receive such income. On the other hand, everyone has the opportunity to launch their own source of passive income.
If you have money, this could be renting out an object or investing in something. If there is no money, then you can create one based on an interesting idea, or launch your own Internet project. In this case, long-term hard work awaits you, which will certainly lead to success.
And the best passive income idea is the one that works! Good luck in your endeavors!
Constantly and most importantly guaranteed, receiving a certain income every month is the dream of any investor. Money works without your participation or any effort and brings even more money. How to achieve this? The answer is you need to know where to invest money. Of course, the amount of profit will directly depend on the amount of funds invested. And let’s say, for novice investors, the profit received from their investments will be relatively small. But you have to start somewhere. After all, the very fact of generating very attractive. In order for income to grow, you need 2 things: periodically invest additional money and constant investment. In law - over time, even the most modest capital can turn into a fairly impressive amount, the profit from which will give you a significant financial flow in the form of monthly income from the funds placed.
Where can you invest money to receive a constant monthly income?
We buy with different coupon payment dates. It is on these dates that you will be accrued profit. You can create a portfolio of bonds in such a way that profits are transferred to your account every month. Typically the coupon duration is 91 or 182 days. Every 3 months or six months, the profit from the purchased bond will be credited to your account.
Advantages. Higher profitability. Clearly predicted and fixed income. High (you can instantly sell bonds without losing accrued profit).
Flaws. The probability of bankruptcy of the issuer that issued the bonds. For blue chips this probability is low. For OFZ (federal loan bonds) and municipal bonds it is practically zero. Usually (although very rarely) so-called third-tier companies (junk bonds) go bankrupt. Avoid buying them and everything will be fine.
4. Dividend shares
. Buy ones that consistently pay dividends. And not just dividends, but... On average, on the Russian market this size is 3-6% of the value of shares. There are companies (but they are few) whose dividends are slightly higher and amount to 8-10%. Judging by the latest payments, these are Surgutneftegaz, MTS and M-video.
The profitability, of course, is still small, but if you consider that you are buying a piece of a working (and successful) business, then with the further development of the company, the profit will also grow.
For example. The price of shares in the stock market is very volatile. They can “walk” within 20-30% throughout the year, both up and down. At the beginning of the year, SurgutNeftegazP shares cost almost 50 rubles per share, then the price fell almost 2 times within six months, to 28 rubles. Considering that the average yield is 10% per share (at a price of 45 rubles) or 4.5 rubles, if you bought at the “bottom” at 28, you would provide yourself with a future profitability of 17% per annum. And if the company’s profit continues to grow, then the annual profitability will easily exceed 20%.
Advantages. By purchasing a “piece of business” in the form of dividend shares, you will have the right to count on a share of the company’s profits. You can find it, thereby obtaining an even higher annual return. As the company develops, profits will increase, which means dividends will also increase.
Flaws. Uneven payment of dividends. The lion's share of payments occurs in the second quarter. Some companies pay dividends twice a year. High volatility in the stock market. Shares purchased may drop significantly in value. But if you are focused (several years), then this will give you the opportunity to purchase additional shares at bargain prices.
In custody.
It is possible (and even necessary) to receive passive income every month. There is nothing complicated about this. The listed methods are available to everyone. And don't forget. Divide your funds into several parts and use them to make a profit in each way. This will, of course, reduce the overall profit, but you will greatly reduce the risks when investing.
Hello, dear readers! With you again and today we will examine the main topic for everyone who has firmly decided to break out of the trap of financial dependence on the employer and finally begin to create their own small factory for producing money. So, the topic of this material: passive income. By the way, if you are still racking your brains about how to get an active income to begin with, I recommend reading the article:.
Probably everyone has heard this quote from Rothschild:
He who owns the information owns the world!
In relation to our topic, it can be paraphrased:
Whoever has information about how to make passive income owns the money!
And here a somewhat paradoxical situation arises. There is more than enough information about this on the Internet, but what quality is it?
I was surprised to discover that the simplest passive income without investments is social benefits and, in particular, a pension. Imagine, here we are racking our brains about how to create a source of constant profit, but it turns out that everything is so easy - you just need to grow old! But this is not the only misconception that can form in the head of an unprepared reader.
Therefore, in my material I will not just list the most common ways of generating income, but also provide real figures and facts about whether it is possible to earn money from them and how much. Along the way, you will have to debunk a couple of myths about the most popular methods: you will find out why you not only do not make money on bank deposits and real estate, but also lose money. Surprised? It will be more interesting later.
So, let's move on to the practical part of our opus. The first, most popular and simplest passive income is opening a bank deposit.
There are more than 650 credit institutions operating in Russia, and almost all of them attract deposits from the public. In general, their range of deposits is approximately the same. You can open deposits in rubles, euros, dollars, pounds sterling, less often in Swiss francs and even yuan. There are deposits with the possibility of replenishment and with monthly transfer of interest to a separate current account. That is, in principle, you can put money in a bank and live off the interest, although I do not recommend doing this and I will further explain why.
Average rates of large banks are 7-8% per annum. Players of a lower rank have a slightly higher profitability - 9-10%. But the real rate always depends on the size of the deposit and the term. That is, the larger the amount and the longer the term, the higher the rate.
The profitability is, frankly speaking, modest. At least in my opinion. I think so: why give money to the bank at 8% per year, if you can learn how to work with binary options and achieve a profitability of 80-100% per month. In general terms, I described this method of earning money in the article:. Here is an example of a successful transaction: 
Benefits of a bank deposit!
Even a child can receive such passive income in Russia. Of course, a child will not be able to open a deposit personally, but the procedure itself is extremely simple and does not require any special knowledge, so deposits are suitable for everyone. This explains their popularity among the general public.
You don't have to do anything. You just come to the bank once, enter into an agreement, give the money to the cashier and after a couple of years you take it back along with interest.
Reliability. Firstly, your passive income is guaranteed, and you will receive a strictly defined profit specified in the contract. Secondly, it is believed that it is almost impossible to lose money on a deposit, that is, the risks are very low. This is both true and to some extent misleading. Next, I will explain what problems an investor may face in the coming years.
How much can you earn?
The answer is not at all. Surprised? Yes, almost all materials examining examples of passive income tell you how easily you can get an income of 100,000 rubles per year through bank deposits with 1,000,000 rubles. But this is a superficial look at the situation.
To understand why a deposit is not capable of generating significant income, you need to understand several terms:
Money. It is a measure of the value of goods and a means of payment.
The purchasing power of money is the amount of services and goods that you can purchase with a certain amount.
Inflation. This term refers to the general increase in prices of goods and services.
Devaluation. This is what they call a depreciation of a currency, in our case the ruble.
Money itself, that is, banknotes, is of no value to you and me. They matter only insofar as we can buy something with them. Right?
Now look. In 2015, according to Rosstat, the official inflation rate was 12.9%. Since Rosstat employs those same storytellers, we make allowances for reality and get actual low inflation at a minimum level of 20-25%. At this rate, the purchasing power of your money is decreasing. That is, a year ago you could buy 100% of some goods and services with the amount you have, but today you can buy 20% less.
Attentiveness test: what is the average deposit rate? By the way, I mentioned it above. In the country's largest banks it is only 7-8% per annum. So, if you had opened a deposit at the beginning of 2015 in the amount of 1,000,000 rubles, by the end of the year you would have been paid 1,080,000 rubles. And the purchasing power of money during the same period decreased only by 12.9%, according to official data. Thus, the purchasing power of your million fell by 129,000 rubles, and the bank’s interest amounted to only 80,000 rubles. Net loss – 49,000 rubles.
Yes, nominally the amount has increased by 80,000 rubles, but with this money at the end of 2015 you will be able to buy as many goods and services as you would have bought at the beginning of the same year for 951,000 rubles. So what good is it to you that there are more banknotes (cut paper with watermarks) if you can buy less with them?
Of course, such calculations are somewhat arbitrary, but I do not strive for mathematical and economic accuracy. I just want to show you that if the annual rate on a deposit does not cover inflation, such a deposit does not bring real income at all. Moreover, you are actually losing money. Plus, if you open a deposit for five years at once and withdraw interest every month, the purchasing power of the original amount will be significantly reduced, and monthly passive income will turn from modest to meager relative to real prices of goods.
Another problem is devaluation. In our case, the depreciation of the ruble relative to the bi-currency basket, that is, relative to the US dollar and the euro. For the period 2014 – beginning of 2015. The ruble depreciated by about half against the dollar. This means that if previously you could buy 100% of imported goods with your million, now their quantity has decreased by about 50% in just two years. And our deposit rate is still 8% per annum.
If the figures I have given seem implausible to someone, look at the dynamics of prices for imported electronics. In more than two years since 2014, everything has approximately doubled in price, and in some places even more.
Why and how to open deposits so as not to lose money?
Despite everything said above, deposits can still be used. Firstly, this instrument is suitable for temporary placement of free money. For example, you are saving money to start a business. If you put money under your pillow, it will depreciate faster than on a deposit, since the deposit rate at least partially compensates for inflation. Secondly, you need to have a certain amount on hand in case of unexpected expenses. For example, they will offer you to buy a small stake in a new promising company, but all your money is already invested in other assets. What to do? This is where your deposit comes in handy. In addition, foreign currency deposits, unlike ruble deposits, can still generate passive income.
And now practical advice on choosing the conditions for placing funds in a bank.
Tip #1. Only systemically important banks. These are the largest credit institutions in the country. Their deposit rates are lower than those of small banks, but the Central Bank will definitely not take away their license. In addition, if such an institution begins to “fall,” it will certainly be supported by funds from some National Welfare Fund or other state fund. I won’t disclose the specific names of banks - I don’t do advertising. But you can look at the ratings of credit institutions yourself.
Tip #2. Select the deposit currency. The ruble is extremely unstable and will steadily slide down in the coming years. Whether you like it or not, this is a fact. What's the conclusion? You must open a deposit in dollars or euros. Indeed, this sharply increases the profitability of the deposit in ruble terms, allows you to completely cover inflation and even get a small profit of about 3-3.5% per annum.
But this is not an ideal option either. Why? There is a risk that the authorities will decide to forcibly convert all foreign currency deposits into rubles at a fixed rate. You understand that this course will not be in your favor. There is only one way out - a multicurrency deposit. According to the conditions of opening such a deposit, you can, if you smell something fried, convert currency in one click directly in the Internet bank. Please pay attention to the conversion fee.
Tip #3. Option to close the deposit early. All deposits are term deposits. The longer the term, the higher the profitability. Therefore, it is much more profitable to open a deposit for 5 years than for 6 months. But there is also a downside to this. If you urgently need money, if you withdraw early, all accumulated interest will be lost. Therefore, you need to choose a deposit with preferential early closure. Some deposits provide for the fixation of income after a certain period. For example, once a year the accumulated interest is fixed and if the deposit is closed early, it will not expire.
Another reason why it is better to choose deposits with this option is the possibility of privatizing part of the funds. Something similar happened in 2013 in Cyprus. There, depositors were forcibly made shareholders of banks and 6.75% - 9.9% of the amount of deposits was confiscated from them. Thus, Russian depositors of Laiki Bank lost approximately $10 billion. The possibility of applying such measures is already being discussed in Russia. So, if there is a risk of a collapse of the Russian banking system, you need to urgently withdraw money before you become a forced shareholder of a bankrupt bank. This is where the option of preferential early closure of a deposit comes in handy.
Tip #4. Confirmation of source of income. In connection with the strengthened fight against money laundering, banks will have the opportunity not to give depositors their money if they cannot explain the origin of the funds and document that they have paid all required taxes on this amount. So, prepare your documents in advance.
Method number 2. Apartments. Gold. Diamonds. How to create passive income from valuable property?
The next most popular passive income with investments after a bank deposit is real estate. But in fact, any property that tends to increase in value over time can act as an asset. This may include:
Antiques.
Art objects.
Precious metals and stones.
Collectibles from coins and stamps to vinyl records and comic books.
Of course, in order to create a portfolio from antiques or paintings, you need to have a deep understanding of this. Personally, I cannot boast of such knowledge. But if among my readers there are experts or at least amateurs, then you can try. The main principle is simple: invest in something that you think will appreciate in value in a few years. Moreover, the profitability can be simply fantastic. So, in 2014, a certain Darren Adams sold the first issue of Action Comics on eBay for $3.2 million. And, by the way, it initially cost 99 cents, although this was already in 1938.
I will not stir up topics that are unfamiliar to me, so as not to mislead you, and I will tell you about those types of property suitable for building passive income, which I know first-hand.
How much can you earn from real estate?
If we talk about Russian real estate, the answer is the same as with bank deposits - not at all. It made sense several years ago to extract passive income in Russia from Moscow and St. Petersburg real estate. But now the situation is fundamentally different. In order not to be unfounded, I will explain in detail how real estate buyers and landlords usually make money.
On transactions with housing you can receive residual income three times:
At the construction stage, an apartment costs 15-30% cheaper than at the time the house was put into operation. That is, in 1-2 years, while construction is underway, without doing anything, you can increase your investment by a third. The only catch is that the construction is unfinished. Therefore, you need to choose only properties of large developers and builders who have access to borrowed capital.
Rental income. Actually, this is the rental of housing. After expenses, the average annual return is approximately 4-6%. Note that this is even less than interest rates on deposits.
Increase in price of the object. If in the case of deposits inflation “ate up” our money, here it plays into our hands - real estate rises in price along with all other goods by about 10-12% per year. But even in this case, not everything is so simple, which I will discuss below.
So how much can you earn? If you successfully buy an apartment in a building under construction at the foundation pit stage, in 1.5-2 years you will receive an increase of 7-15% per annum. Not much, but not bad. Then, every year, the property, subject to the growth of the real estate market as a whole, will increase in value by up to 12% per year. Passive income from renting out an apartment is about 5% per year. Thus, in 5 years, ideally, you can return on average 70% of the money invested. That is, the total return is about 14% per annum.
This is barely enough to cover inflation. But in reality you will not receive such income. Why?
There are several reasons:
New buildings no longer bring such high returns during the period of construction of the house, and the risks of running into long-term construction are constantly growing.
When renting out housing, a lot of side expenses arise, including the cost of finding tenants, purchasing and periodically updating furniture, major and cosmetic repairs, taxes, and finally. Also, don’t forget to take into account periods of downtime when there is no tenant yet and utility bills continue to trickle down. As a result, the real rental yield barely reaches 3% per year.
Property markets around the world tend to develop into what are known as bubbles. While these same bubbles were forming, Moscow new buildings were steadily increasing in price by 10-12% per year. But in 2015, the holiday ended - the balloon began to deflate, and at a rate of 14.5% per year in rubles and as much as 33.6% in dollars.
Thus, in 2015, Russian real estate owners received negative returns. Rental profits are pitiful, and the assets themselves have fallen in price by a third in dollar terms. As you can see, dealing with real estate is even less profitable than opening a bank deposit.
Does all this mean that you can’t make money in real estate at all? Not really. You can create a good passive income business from housing in the EU countries, USA, Canada, as well as in popular resort regions.
In Europe, the average rentier profit is 3-5% per year per property. The numbers seem to be the same as in the case of Russian apartments, but in euros. This means that the profitability of European real estate will completely cover not only official, but also real ruble inflation and will even bring quite tangible income. In addition, investing in housing allows you to protect your investments from the consequences of ruble devaluation.
How to make passive income in real estate correctly?
If you do decide to invest in housing someday, here are some recommendations:
in the coming years, buy housing only abroad;
Why do I recommend using gold as a source of passive income?
Gold does not have a fixed price or any stable rate of return. Therefore, in certain periods one can observe a decline in prices for the yellow metal. However, if we take long-term dynamics, gold has been steadily growing in price since 1938, when its rate was set free to float.
Now about the size of profitability. In the period from 04/01/2015 to 04/01/2016, that is, in exactly one year, gold at the rate of the Central Bank of the Russian Federation increased from 2,185 rubles to 2,691 rubles per 1 gram. The annual return was 23%. As you can see, this figure completely covers official inflation and gives a good profit. Of course, the numbers in dollars or euros are not so impressive, but you can get decent passive income there too. 
If we consider the long-term perspective, then over the 7 years from 04/01/2009 to 04/01/2016, a gram of gold at the rate of the same Central Bank of the Russian Federation increased in price from 1,001 rubles to 2,691 rubles. The cumulative price increase for the entire period is 169%! Thus, the average annual passive income is 24%. And note, this takes into account local declines in the gold rate.
In my opinion, this is one of the best tools for conservative investments. Buying gold, like opening a bank deposit, does not require special knowledge, while these instruments are incomparable in terms of profitability, and the risks of investing in the precious metal, it seems to me, are much lower than those of deposits of Russian banks.
The only problem with gold is that it is advisable to invest in it for a long time. That is, they bought a bar or coins and forgot them in a safe or safe deposit box for 5-10 years. Essentially, these are strategic investments. If you want to start receiving passive income right now and monthly, then precious metals are not suitable for this. Then it’s better to try binary options: . Moreover, this tool allows you to make money on gold, too, only through short-term speculative transactions.
Either way, gold is definitely worth using to diversify your asset portfolio. This will significantly reduce risks for assets with higher returns, but, accordingly, with increased risks.
Let's move on to the practical side of the issue: how to get passive income by investing in gold? There are two options: buy coins or bars, or open an impersonal metal account.
In the first case, directly upon purchase of coins or bars, VAT of 18% will be included in the price. That is, at first it can be considered a net loss. However, as I noted above, gold is suitable mainly for long-term investments. So, if we spread this 18% over 10 years, we get 1.8% per year. With an average return of 24% per annum, these are quite acceptable losses. Plus, when selling, if you follow all the rules, you will have to pay personal income tax - 13%. This is another 1.3% per year. The total total passive income minus taxes when investing in gold for 10 years will be 209%. In my opinion, it's not bad that even with annual inflation of 13% you end up with a 79% gain.
Now let's say a word about the impersonal metal account. You can open it at most banks. The account will count your gold in grams. In theory, you can pick it up in kind at any time or sell it to a bank and immediately receive cash. True, in reality, banks are not very willing to issue gold to the client and often delay the fulfillment of this legal requirement of the account holder. Again, the question arises about trust in the banking system as a whole and a specific credit institution in particular. By the way, the deposit insurance program does not apply to compulsory medical insurance.
And one could say that buying gold in kind is definitely better. Agree, it’s nice to hold your own gold bar in your hands. However, there are three “buts” at once. Firstly, when opening a compulsory medical insurance you do not have to pay VAT. Secondly, you can open a fixed-term account that accrues interest. That is, passive income will be a little higher, although interest rates on compulsory medical insurance are more than modest - on average 1% per year. A small thing, but still nice. Thirdly, there is the issue of security. Bullions or coins need to be stored somewhere. You can rent a safe deposit box, but these are additional costs and again a meeting with the bank. So all that remains is to bury your treasure on some island.
By the way, there is an alternative to strategic investments in gold - speculation on fluctuations in precious metal rates. Forex brokers provide this opportunity, but there is one catch: to trade gold, you need a fairly large capital, and errors in predicting changes in quotes can lead to the loss of your deposit in a matter of minutes. Therefore, I would advise choosing binary options. They also allow you to work with gold, but the size of the entrance ticket and the risks are much lower there, although the potential passive income remains at the same level. You can find out what binary options are from this article:.
Method number 3. Creating an intellectual product!
Alas, it is almost impossible to create residual income without at least minimal investment. Actually, there is only one way: to create something valuable. The choice seems limited, but in fact it is extremely wide. You can make money from writing, inventions, photography, blogging. Particularly successful mobile application developers are making good money these days.
Of course, there is no single monetization recipe for all of the above endeavors, but in many cases you can find at least an approximate strategy for creating and promoting a sought-after product. The Internet is literally teeming with recommendations on how to earn passive income on the Internet by blogging or creating an information site, or how to make a fortune as an iOS application developer. I admit, I am far from an expert in these matters, and the format of the material does not allow us to consider in detail all the many quite sensible recommendations for creative people who want to create a source of passive income.
Here I will give several examples of how real people, like you and me, create billions of dollars in capital from scratch and how much they manage to earn:
YouTube blog author Felix Kjellberg's videos are regularly watched by 40 million subscribers. The channel's annual revenue is $12 million.
Ethan Nicholas, a developer from North Carolina, USA, earned $800,000 from a simple iShoot game.
Canadian Danielle Fong has come up with a new way to accumulate and store energy obtained from wind generators and solar panels. Peter Thiel and Bill Gates have already invested over $30 million in her startup.
German photographer Andreas Gursky managed to earn $4.3 million from the sale of one photograph alone. Of course, his income is not limited to this.
Damien Hirst, one of the most successful artists of our time, is worth about $1 billion.
Probably the well-known writer JK Rowling earned $1.5 billion from her wizard Harry. This is the total income from the sale of all copies of the book series and the film adaptation of bestsellers
Unfortunately, such methods of passive income do not offer any guarantee of commercial success. So doing photography, painting or writing makes sense mainly for the soul, and turning the results of creativity into millions and even billions of dollars is mainly a matter of chance.
As for the practical side of the issue, do not forget about such little things as copyright registration. In particular, to obtain a patent for an invention or utility model, you need to contact the Federal Institute of Industrial Property. And if you've written a book and want to protect your interests before pitching it to publishers, print it out, dated, and mail it to yourself.
Method number 4. How to become Warren Buffett: passive income on securities!
Where can I get money to start my own business? This is exactly the problem that 95% of new entrepreneurs face! In the article, we revealed the most relevant ways to obtain start-up capital for an entrepreneur. We also recommend that you carefully study the results of our experiment in exchange earnings:
Warren Buffett is the most successful investor in the world. The fortune of this Oracle of Omaha in 2008 was $68 billion. Only a genius could repeat such a success, but history knows thousands of other examples when multimillion-dollar fortunes were created on securities. Can you use this method? To answer this question, let's first get a basic understanding of the main types of securities.
Stock. Companies use this type of securities to attract investment capital. In this case, each shareholder becomes, in fact, a co-owner of the enterprise, although the share of the majority of shareholders, of course, is negligible. Stocks generate income in two ways. Firstly, there are dividends. At the end of each reporting period (usually a year), the company sums up its financial activities and decides on the distribution of profits. The latter goes to shareholders in accordance with the size of their stake.
Secondly, you can receive passive income from the rise in price of shares during the period that elapses from the moment of purchasing securities to the moment of their sale. Of course, there is a risk here, and quite a high one, that stock prices will fall, that is, instead of profit you will receive losses.
There are two types of shares: ordinary and preferred. The former give votes at the shareholders' meeting, the latter provide their owners with higher income, since they involve the payment of either a fixed amount or a strictly defined percentage of the profit.
Bonds. These securities are debt obligations. Essentially, the issuer (the person issuing securities) borrows money from you for a certain period, after which it undertakes to buy back its bonds from you, usually with a certain fixed income. Bonds are also perpetual and with periodic coupon (income) payments throughout the life of the debt obligation.
The advantage of this type of securities is that you are guaranteed to receive a certain return. The risk is limited only by the solvency of the issuer. That is, if the state or company does not decide to declare itself bankrupt, the money you paid will definitely return to you, and at the same time the income established by the issuer. It should be noted that bond yields depend on the degree of risk, but they are usually low.
Now let's discuss derivatives - derivative financial instruments. These are securities for securities or for goods. Unclear? Now let's look at everything in more detail, and you will understand.
Futures. These are contracts for the purchase or sale of specific assets. They indicate the quantity of goods, currency, shares or bonds, delivery time and price. When the contract expires, either the actual delivery of the asset or cash settlements take place. That is, you do not have to pick up the goods themselves; you can receive monetary compensation.
The essence of operations with futures is to buy a contract with a lower strike price, and sell it when the market price of the underlying asset, and with it the contract itself, increases significantly. For example, you bought Brent oil futures with a strike price of $28 per barrel, and after a couple of months it rose to $35. We sell the contract and take profit. By the way, oil futures are one of the most popular investor instruments.
The advantage of futures is that the value of the contracts is much lower than the value of the underlying assets. This allows you to get by with a smaller initial investment and get more passive income than, say, from investing directly in stocks. Meanwhile, losses in the event of a change in prices for the underlying asset not in your favor will be higher.
CFD. This is another contract, but this time not for the delivery of the underlying asset, but for changing its price. One side bets on an increase in quotes, the other on a decrease. When the contract matures, one party pays the other the difference between the current value of the underlying asset and its price at the time the contract was concluded.
For example, when a CFD was concluded, the cost of the underlying asset (stocks, commodities, bonds, etc.) was $100. You bet on an increase. Now, if the underlying asset is worth $110 when the contract matures, the other party will have to pay you $10.
The list of existing securities, of course, is much wider, but I have listed the most popular types of assets, and this is quite enough for everyone who is interested in how to receive passive income from investing in securities.
How much will you earn on securities?
Let's start with bonds. The profitability, frankly speaking, is modest. For example, on Gazprom's currently in circulation medium-term ruble bonds, the annual yield is only 7.55%. For some VTB 24 bonds with a par value of 1000 rubles, the income is 9% per annum with payments 4 times a year. A little better, but the problem is the same as with bank deposits - your passive income will not cover even inflation.
Now for the promotions. As an example, I will take one of the most profitable stocks in the world at the moment - Apple securities. The cost of one share of the company in April 2016 reached $108. Dividends for 2015 were 47 cents per share. You understand, it’s not a lot, at least if you don’t have several million dollars to invest.
In fact, dividends are never big. The main profit comes from rising quotes.
So, 6 years ago, that is, at the beginning of 2010, the cost of an “apple” share was only about $28. Thus, during this period, the company’s shareholders received a passive income of 285%, not counting dividends. The average annual return was more than 47%. Not weak, right?!
But I emphasize once again that Apple shares are one of the most successful examples on the market. Most corporate securities, unfortunately, cannot boast of such indicators. In addition, there is always a high risk of a significant drop in quotes, and it is not always possible to predict it accurately enough.
The profitability of futures and CFDs depends directly on you and your skills in forecasting changes in the rates of underlying assets. So it makes no sense to give specific numbers here. Let me just say that successful derivatives traders earn very, very impressive capital.
How to buy stocks and bonds?
Some securities can be purchased directly from the issuer. In other cases, you will have to turn to the services of professional market participants - brokers.
All companies set their own minimum initial investment. Most brokers won't lift a finger if you come in with less than $50,000, but you can find companies with entry fees starting at $200. True, with such a modest amount you can’t really go wild, and you can’t count on big profits from a long-term investment of a couple of hundred dollars in securities.
Although you can start with this, I would recommend getting into binary options with a small capital. This tool allows you to work with both stocks and bonds, but the investment required is many times less than if you were buying securities, and the profitability is many times higher. In order not to be unfounded, I publish on my transactions.
When choosing a broker, it is very important to check its reliability, quality of technical support, and most importantly, inquire about the amount of commissions for transactions, deposits and withdrawals of funds.
Just the truth: can you make money on securities?
For a private investor, the easiest way to invest in securities is to buy and forget for several years while income accumulates. This is strategic investing. The problem is that for a long-term investment of capital in science, you need to look for a “safe haven”, and there is currently no such place anywhere in the world. Thus, in the early days of 2016, we could observe the largest collapse of the Dow Jones index since the Great Depression. And, by the way, this index takes into account the prices of shares of the 30 largest US companies, such as Coca-Cola, Boeing, General Electric, Intel Corp., Nike, etc. So investors received multi-billion dollar losses as a New Year's gift.
One might, of course, think that the range of securities is not limited to American companies. But in other countries the situation is no better. In particular, on the same days when the Dow Jones suddenly fell ill, its Chinese comrade, the Shanghai Composite stock exchange index, collapsed even more.
So, there are virtually no “safe havens” for capital in the stock market today. True, you can try to identify the money in shares of “new economy” companies. These include payment systems, search engines, social networks, software developers, and device manufacturers.
If you absolutely do not understand anything about all this and are not too eager to constantly monitor economic and political news, it is easier to transfer the money to trust management. Brokers and management companies offer different investment strategies, provide diversification of the package and its adjustment depending on the market situation. Of course, for all this happiness you will have to pay a commission, but this is easier than delving into all the jungle of strategic analysis of the stock market yourself.
Mutual investment funds.
This is an alternative to direct trust management of your money in a personal account. We are talking about collective investment here. The fund sells its shares, thereby forming the total investment capital. This money is invested in assets: stocks, bonds, real estate, etc. The fund's natural goal is to extract as much profit as possible from these investments. Income is divided among shareholders in accordance with the number of shares.
The main advantage of mutual funds is the ability to invest in expensive assets with a small amount. For example, you have 30,000 rubles. With this money you can buy only 4 shares of Apple. It seems good, but the risks are extremely high - remember, we talked about diversification. You can go another way: buy 3 shares worth 10,000 rubles each, choosing a mutual fund with a strategy of investing in “new economy” companies. Our beloved Apple, Facebook, Microsoft and many other interesting things will be there. Of course, having lower-yielding securities in your portfolio will reduce your overall return. But, at the same time, risks will also be reduced, many times over, and we must always strive for a reasonable balance of risks and profitability.
Method: 5. Passive income from your own business!
I think there is no point in talking about how much a successful entrepreneur can earn, given that everyone knows the clearest examples: Jobs, Gates, Branson, or personally my idol Elon Musk. The only question is how to turn a business from an active income, when you spend days and nights in the office or travel around cities and villages visiting representative offices of your company, into a passive income business.
In general, there is no great science here. First, you need to clearly formulate the company's mission, core values and strategy. Secondly, it is necessary to adopt a process approach to the internal organization of the enterprise. That is, all the work of the company should be divided into separate simple processes and written down in the form of job descriptions for each employee. Such a system involves the creation of control points, the verification of which is sufficient to monitor the company’s activities and its results. In this way, you will be able to manage your company with minimal time investment. She herself will work like a clock. All you have to do is course correct.
When the company has already been built and brought to cruising speed, there is no need to manage it yourself. You can hire a CEO (Chief Executive Officer) and shift the burden of leadership onto him.
Of course, such methods of passive income involve one pressing problem - the question of finding initial capital arises. I outlined my thoughts on this topic in the article:
How to create a business empire through franchising?
Imagine you have created a company. Successful. Effective. Profitable. But I want more. Give up the dream of transferring your business to passive mode, and at the same time giving up your dolce vita for profit from an autonomously operating company? Roll up your sleeves again and take on the development of the enterprise, expanding its presence in other regions? To do this, you will have to spend months on business trips, increase your administrative resources, and with it, by the way, costs will also increase. In addition, the problem of raising money to expand the business will arise. You can use my modest recommendations: . However, for the full-scale development of the company, it is unlikely that it will be possible to do without borrowed funds.
This path has a much more profitable and simpler alternative - franchising. Its essence is that you sell your ready-made business model along with the right to use all technologies, brand, and documentation templates to other entrepreneurs. They, in turn, open representative offices of your company in the regions at their own expense.
This solves three problems at once. Firstly, franchise buyers invest in the expansion of the company. Secondly, they also provide management of enterprise divisions without the need for strict centralization and constant control from the center. Thirdly, unlike hired managers, franchisees treat the company's division as their own business. He is personally interested in achieving maximum efficiency and profitability of the enterprise. As a result, there is no need to inflate the management staff to control the work of regional divisions and rack your brains over methods of stimulating managers.
What do you get? Firstly, the franchise buyer pays an immediate lump sum fee. Secondly, you will receive royalties from the profits of all branches - this will be your passive income. The parent company requires precise step-by-step instructions for opening a company, technology for creating a product and sales, a marketing strategy, in a word, everything that you should have done in the process of creating your enterprise. Additionally, you only need to organize a small department that will promote the franchise, interact with potential buyers, as well as advise them and help them solve problems.
How to create a passive income business through franchising is approximately clear. The question remains - how much will you earn? It is hardly possible to estimate the potential profitability of the network. It all depends on the quality of the business model and development strategy. But as a sample, I will list several well-known brands, the development of which is carried out using this technology: KFC, Subway, Traveler’s, 2GIS, Yves Rocher, Well, Expedition, Sbarro.
Now a more specific example in numbers. The lump sum fee for purchasing a Subway franchise is 600,000 rubles. Monthly payment to the franchisor (royalty) - 8% of revenue plus 1.5% of turnover as an advertising fee. The turnover of one point varies between 5-9.5 million rubles, and the total network in Russia is 673. Thus, the total income from the entire network is more than 390 million rubles, excluding advertising fees.
MLM. Is it possible to create passive income through network marketing?
About 20% of American millionaires made their fortune through network marketing. Here is the answer to the question about the possibility of making money on MLM. I think that today it has become even easier to use this model of building a business than 10-15 years ago. This is due to the relative simplicity and availability of tools that allow you to quickly develop a network of partners via the Internet.
Network marketing, in fact, is one of the options for business development strategy. The same franchise, only simpler and much more accessible to partners. This option is suitable for products whose sale does not require a retail outlet or office.
Yes, for many such examples of passive income cause some irony. But this is rather due to the somewhat intrusive and even clumsy nature of the work of distributors. In fact, the model is quite working. Without significant investments, you get a product that you can sell without organizing a point of sale, recruiting staff and other difficulties. You just make each of your regular customers a partner, he continues to buy products himself and sell them to his friends, and for this you receive income without the slightest movement.
MLM has enough advantages:
Minimum initial investment. In most cases, you can get by with $200-300. That is, your risks are limited only by this amount.
There is no paperwork, and, therefore, there is no need to spend money on the services of a lawyer, accountant, etc.
There is no need to master the intricacies of the art of personnel management. In fact, you have many people from whose purchases and sales you generate income. Moreover, they all act independently without additional motivation, as is the case with a franchise.
No hassle with the tax service, numerous inspections by regulatory authorities, business disputes with counterparties, etc.
You can create an extensive multi-level structure in literally 2-4 years, and then it will, at least for several years, generate impressive passive income without much effort.
Of course, a lot depends on the choice of brand. For example, I don’t see the point in joining such painfully familiar structures as Avon, Amway or Herbalife. It seems better to bet on a brand that has been promoted abroad, but is new to the Russian market. This way you will have a better chance of creating a large pyramid of partners.
Method number 6. Don’t know how to create your own business? Make money on someone else's!
We have looked at almost all the examples of passive income that I wanted to discuss in this material. The last one left is investing in someone else’s business. It would probably be more correct to call this investing in venture capital, that is, high-risk enterprises, since we have already touched upon investing in shares and bonds of developed, stable companies above.
The idea here is to find a promising startup, help it with money in exchange for shares and either regularly receive some share of the enterprise's profits, or wait until its securities increase in price many times over and sell them. There are plenty of examples of successful investments in venture capital companies. Of course, the most famous are large investors. Thus, Jim Goetz turned $60 million into $3 billion by investing in WatsApp. Douglas Lyon made a fortune of $2.2 billion from Google, YouTube, WatsApp. Peter Thiel earned roughly the same amount from PayPal and Facebook.
All these respected people, as you understand, “graze” in Silicon Valley, where you go with your $1000 and they will drive you out like a beggar. However, this does not mean that you cannot, with a small amount of money, join the ranks of venture investors.
How to become a venture investor?
Try on the role of a business angel. In my opinion, for a non-professional investor with a small capital, it is better to choose other methods of passive income, since this option is the least profitable and at the same time extremely risky. The bottom line is that you find budding entrepreneurs among your friends or just online and provide them with financing. The chances of success are extremely low, unless you yourself are an experienced businessman and are ready to take part in the project.
Crowdfunding platforms. Angellist and StartTrack and other platforms allow you to invest a relatively small amount in several startups at once, and transactions are carried out through a special online service. An additional advantage is the ability to focus on the decisions of other investors, including professional ones, when choosing projects.
Syndicated deals. These are joint operations of groups of investors existing on the same crowdfunding platforms or investment funds. This approach allows you to invest capital together with professional players and gain access to higher quality and promising projects. The disadvantage of syndicates is the commission for related services.
Venture funds. If you don't already have, say, $1 million, then this option won't suit you. But we are working for the future, right? So this method is worth considering. It’s good because you don’t need to understand existing projects and personally select startups - professionals do everything for you. You are only required to transfer money to the fund for 5-7 years.
When considering venture investments as passive income, keep in mind that to ensure an acceptable level of risks, you need to distribute capital between at least 10 projects. At the same time, it is necessary to select only high-quality startups. To do this, follow competitions for venture projects, and also read articles in the media with selections of promising companies.
Passive income. How it works?
Each of us has a basic set of resources: time, physical strength, the ability to perform simple tasks. Many can also boast of a good education, experience in some field and simply a smart head, which in itself is not as common as we would like. So the difference between a dollar millionaire and an ordinary hard worker who lives from paycheck to paycheck is how they manage these resources.
An employee, the vast majority of whom, essentially makes a direct exchange of their time for money. Moreover, the cost of each hour or day directly depends on the value of his skills, knowledge, experience, and productivity. And this is called active income. Rich people, in turn, directly or indirectly invest available resources in the creation of assets - values that can generate income without further investment of the owner's resources. Therefore, passive income is also called residual income from the Latin word residuus - remaining, preserved. The work has already ended, but the profit remains indefinitely.
Why does this method of extracting financial benefits bring in many times more money than regular hired labor? It's simple: you can create a package of assets, the total value of which for the market will be hundreds of times higher than the value of your personal time with all the skills and knowledge combined.
3 types of sources of residual income!
What can act as assets? I have already given specific options for passive income above, but now I will try to explain the essence. So, I would divide all assets into three categories:
The first type is things that become more expensive on their own. That is, receiving passive income or other currency is earning money from the difference between the price you paid when purchasing the property and its value, say, in a year or simply by the time you decide to sell this property. For example, you bought shares at $15 per share, and after 5 years they are already worth $115. The total return is 766%. This is a brilliant result, I tell you.
In the second group I would include property that can be sold an unlimited number of times. An example is a patent for an invention. You can sell the right to use your invention to multiple companies during the life of the patent. At the same time, you worked only once - when you created your invention. And it can bring stable passive income for decades.
The third category is assets that themselves create new value, and you receive income from its sale. Any company can serve as an example. Once you have created a successful business, you can retire, but the activity of the enterprise itself will not stop. It will continue to produce goods or provide services, make a profit from their sale, and part of it will safely end up in your fattening pockets.
I would like to note that this is not a free retelling of some scientific classification, but my own view of the types of passive income. And I’m telling you all this so that you understand the general principles of asset formation and can find and choose for yourself the most convenient and interesting methods of creating sources of residual income, without limiting yourself only to my or someone else’s advice. In the end, you have to do something that you really enjoy, otherwise you won’t be able to achieve truly great success.
What's stopping you from creating passive income?
Sorry, but now I'm going to be smart. Or rather, demonstrate your modest knowledge of economic theory.
In the interpretation of the Austrian school of economics, capital is defined as resources that we do not consume right now, but use them in order to obtain a higher level of consumption later, in the future. And profit, in turn, is a payment for the risk of losing these very resources, as well as for the fact that you will have to be patient a little and postpone the moment of consumption until later.
Actually, these definitions contain four main problems that prevent you from creating residual income.
Problem #1. We absolutely do not want to endure and postpone the sweet moment of consumption for the future. We want to eat, drink, use everything right now. Life, in fact, constantly offers you a choice: grab one dubious-looking caramel right away or wait a week and get a whole box of delicious chocolates. So what do you usually choose? There will be no hints here - answer yourself, only honestly.
Problem #2. Poor time management. Instead of correctly scheduling and investing part of the time in our assets, that is, future consumption, we either give this time to our uncle, for whom we work overtime and on weekends for a “thank you”, and often without any thanks, or we bring precious hours and days as a sacrifice to the gods of the Sofa and TV. There is only one way to overcome this problem - time management. It must be said that time management is a whole science, although it is easy to understand. I advise you to read books on this topic by a recognized guru in this area, Brian Tracy.
Problem #3. Poor financial management. Remember Matroskin’s phrase: “To sell something unnecessary, you must first buy something unnecessary. But we have no money!” Here comes the third problem of creating residual income. For this you need at least a small capital, but where can you get it? I have already outlined some of my thoughts on this topic in the article. In general, you need to learn to plan your budget and save. Just make it a rule to save, say, 10% of all your income every month, and no matter what happens, stick to this principle.
This rule is directly related to the third problem of residual income, that is, risks, and is expressed in just one word - diversification. The essence of this approach is to distribute your capital across several assets with different levels of risk. For example, you can build a portfolio of stocks, bonds and precious metals.
Why is this necessary? – This is how we achieve risk minimization. For example, if you invest all your money in shares of a promising young company, then there is an extremely high probability of losing all your capital if the company does not live up to expectations. But you can do it differently. Part of the money goes into high-risk securities. Another part is in gold. The risks here are much lower and in the long term the yellow metal shows stable and very decent growth. And finally, put another part of the money into bonds, which have a small but fixed amount.
Having such a portfolio, on the one hand, you provide yourself with the opportunity to receive high and stable passive income from shares. On the other hand, you protect yourself from a complete loss of capital with bonds and gold. Thirdly, at least part of the invested funds will certainly bring some return, which will compensate for potential losses from loss or fall in the price of other assets.
What passive income options did I choose?
You can learn about my entrepreneurial story from this little autobiography: . In short, I have already built my own business, and it is this that serves as my main source of passive income. But, since marking time is not good for a real entrepreneur, I, firstly, planned to expand my company, and secondly, I mastered a new way to increase my capital - trading on the binary options exchange.
This option is not entirely suitable for receiving passive income itself, since it requires the trader’s personal participation in each transaction. However, I will still say a word about it, because, in my opinion, binary options have several advantages over each of the above methods of making money:
Low entrance ticket price. Unlike the minimum required costs to create your own business or a diversified portfolio of stocks and bonds, $300-500 is enough to start working with binary options. Of course, to ensure good returns and minimize risks, it is better to allocate a slightly larger amount.
High profitability, many times higher than inflation. Profit from speculation with binary options can reach or even exceed 100% per month of the initial capital. None of the above methods brings such income.
Anyone can master working with binary options and achieve consistently high profits in 1-2 months.
However, it should immediately upset lovers of freebies - it is not here. It will not be possible to do without preliminary study and quite a lot of painstaking work at the very beginning. You can learn more about how to get started from this article:. But then you can make several profitable trades a day quite easily, spending no more than an hour in total. Here is one example of my transactions:
I hope my recommendations on creating passive income will help you decide on ways to develop your personal financial empire and avoid common mistakes. I wish you good luck and all the best.
Sincerely, .