Passive income is money that flows into your pocket while you are sleeping. This is the opposite of active income, where you trade your time for money. The past 4 months of lockdown have shown us how much we lack control over income earned from trading our time for money (active income). Our earning simply stops when we stop working or when the business stops.
The first thing that comes to many people’s mind when they hear the word “passive income” is that you own a business or you are an entrepreneur. This assumption is not totally correct. Entrepreneurship is just one of the many ways you can earn passive income. Below are some other ways of creating self-sustaining assets for yourself while you sleep:
👉🏻Royalties from books, music and other creative works.
👉🏻Dividends from stocks, bonds, index funds and ETFs.
👉🏻Rental income from properties that others manage.
👉🏻Income from businesses you own but don’t operate.
👉🏻Selling products or services via a dedicated platform.
👉🏻Peer-to-peer lending or silent business partner.
👉🏻REITs and other income-oriented market investments.
👉🏻Affiliate marketing or sales generated from referrals.
👉🏻Owning vending machines or other hands-off income sources.
Not everyone is called to become an entrepreneur, but anyone can become an investor, a freelancer, a seller of stuff, a partner to another business, etc. Building passive income is no easy feat by any measure. It takes an enormous amount of effort and exertion of your time with very little return in the beginning. Still, it’s one of the most fruitful and worthwhile investments of your time that you could possibly engage in.
About Nike
Oyenike Adetoye (aka Nike) is an impactful speaker, author and personal finance expert. A Chartered Management Accountant by profession. Nike is the founder and CEO of LifTED Finance, a private financial firm that educates, coaches and supports people on their journey through financial fitness and wealth management.