Have you seen the news lately? If you focus your search on the impact of coronavirus on the financial market, the results are anything but positive.
There's even a question of whether this crisis will cause a global recession.
To say that people were caught off guard is an understatement. There's no way anyone could have been prepared for such a hit.
Even the most powerful countries have been crippled by the devastating effects of COVID-19.
In the midst of all the uncertainties is the dwindling trust of investors on market conditions.
Times like this bring to the forefront the importance of a passive income. In the event that a crisis happens, you will continue to earn even if everyone else is struggling to make ends meet.
Have you yet to make an acquaintance with passive income? Jump right on it before the next crisis storms in.
Why is passive income important?
What is passive income, you ask?
It's an income stream that requires little to no effort from you. Think real estate rental income that is paid to you every month without you doing a lot of work to make this happen.
It's different from active income in the sense that what you earn is not a direct exchange of your skills and time.
Simply put, it's not a job, but you're earning just the same.
Pros
- A steady source of income
- Freedom to live and work anywhere
- Supports financial growth and stability
- Reduced anxiety, fear, and stress over your future
- Freedom of time and the ability to pursue your dreams
Cons
- Some investments may require attention
- Takes time to build
- Requires diversification
- May require a lot of capital
- May be high risk
Passive activities
There are three different activities where you earn a passive income:
- Cash flow
- Trade or business
- Royalties
Each activity involves different assets where you can generate money. Under cash flow, for instance, income may come from rent, property, and interests from financial assets.
Royalties, on the other hand, are money paid for the use of someone else's intellectual property.
Avenues to generate passive income and help you build real wealth
Based on the activities you choose, there are several income-generating avenues to explore. If your goal is stable cash flow, there are many options available to you.
Investing and trading
What better way to ensure you have the money you can tap into at any point in your life than through investing or trading?
Forex
This is an activity where currencies are traded in the foreign exchange market. You can do so actively or passively.
Now is a good time for you to learn Forex investing since it's done online. It can be automated, too.
Another option is copy trading, where you can copy an experienced trader's buying and selling strategy.
Trade with a demo account first to get a feel of the process and to build your confidence (you’ll be exposed to real trading conditions while using virtual money to trade!). Or, use CopyPip to start trading, even with little Forex knowledge.
Rental Properties
Once you get a rental up and running, you start earning a passive income. Set in the best location, your property will be a moneymaker.
Now, you may think you don't need to do much to earn from this financial vehicle, but you do need to ensure regular upkeep of your property if you want it fully occupied all the time.
Dividend Stocks
Some stocks from big companies pay dividends to investors or shareholders. How much you get will depend on the number of shares that you own.
Say, a company pays a 3% dividend for stocks trading at $150. You'll then earn $4.5 for every share. If you have 1,000 shares, then you'll earn $4,500 worth of dividends. Not bad, eh?
Before you make this much, however, extensive research on good stocks is crucial. You need significant capital to receive large dividends as well.
Peer-to-Peer (P2P) Lending
Got money that you can lend to people who don't qualify for traditional loans? Peer-to-peer lending will make a good source of passive income for you. Expect a median return of 4.1%. Using a P2P lending platform, you can spread the amount you invest to keep the risks under control.
Annuities
These insurance products come with monthly payments when certain conditions and terms are met. It is highly recommended for someone with zero risk tolerance for loss.
Online options
Many have made a fortune on the World Wide Web. You can too.
Affiliate Marketing
Earn commissions every time a sale is made through your referral. All you need to do is to point prospective buyers to the right merchant, ensure they close a deal, and then wait to get paid. Some affiliate products come with recurring commissions.
Most affiliate programs provide affiliates with fundamental marketing tools.
A good example of this is PipBox, a marketing tool that gives you access to sales funnels, shareable content, and other valuable resources that you can use.
Just share the content on social media. If any of your followers sign up and start trading, you earn from referrals. In addition, you will also learn marketing strategies that work and have access to a global sales team from a single platform.
Sell an eBook online
It may take a while before your self-published book becomes a source of passive income, but it will be easy money when it does. Just be ready to spend a significant amount on upfront marketing.
Create a course
Do you have the skills to educate? Create video courses and get paid by anyone interested in the subject you're teaching.
Sell stock photos
If you have some mad photography skills, you can turn them into a passive income stream when you sell photos on stock photo websites. Every time someone buys, you receive a commission.
You can also create illustrations or digital art and sell them on stocks instead of photos. You will need to learn graphic design for this, though. However, it is not a problem as there are a lot of available courses online.
Create apps
You can definitely cash in on this app-driven society. This is especially true if you have a winning idea for an app. Use it to build a residual income source.
There are plenty of other ways to make money online. With a bit of research and analysis, you will discover income-generating ideas from the web.
Increase cash flow
Pay off your debts accordingly
This means you only pay what is due rather than pay more in the hopes to reduce your loan capital. This way, whatever extra funds you have, you can put towards a savings account or emergency fund.
Consider refinancing your mortgage
If interests are low, you could free up a lot of income and save on loan repayments. This will put a substantial amount back into your pocket.
Pay yourself first
What better way to build cash flow than to set aside 20% of your income into a savings account before spending on anything else. Investors routinely do this. You should too. Done religiously, you will have a hefty cushion should a financial crisis arise.
Sell items on online stores
If you sell digital files or products, the fewer overheads you have to worry about and the more income you make. Even if you choose to sell physical products, however, online selling is a good source of passive income.
Now that you have the information and tools you need, including PipBox, put them into practice and discover what works best for a passive income earner like you. A combination of any of these options makes for good diversification.
Learn more about how you can start earning from PipBox here.
How else can you start earning income in times of crisis? Through a recession-proof vehicle like Forex trading, of course! Start trading with Fullerton Markets today by opening an account with us:
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