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According to Wikipedia, passive income- this is an income that does not depend on daily activities. But this is not a complete definition.
Passive income is the income you receive even when you are not working. The simplest example is renting out an apartment. You can work at your main job, but receive passive income from your property.
However, there are a lot of types and sources for obtaining passive income, and their essence is to create passive income from scratch.
You need to understand that in order to receive a constant income and do nothing, at first you will have to work hard.
But 6-18 months of work can provide you with stable profits for many years to come, even when you are no longer working.
The principle of active work: did the job - got paid. He wanted more money - he did another job. For example the driver UBER, he gets money as long as he takes people. If he stops driving, he will stop earning.
The principle of passive income: created a source of income once - you get a profit on an ongoing basis.
Passive income is the dream of any normal person.
There are so many ideas for generating passive income that we will break them down by type and try to understand how much profit each option can bring.
What can bring us profit? An asset that we will create or buy. Most sources of passive income require some investment, and absolutely all assets require some initial effort.
Let's start with options for creating passive income from scratch, without investment.
There are a great many ways to get passive income here, and each of the options will be of interest to a certain circle of people.
Once you write a book, you can sell it for years. It is not necessary to write novels or detective stories, educational books are also in great demand.
There are many services for aspiring writers, such as writing a book online. You will receive instant feedback, and if your idea is successful, a publishing contract will be signed with you immediately.
An e-book can bring $100-200 per month, but the greater the interest, the greater the profits.
Do you think no one does it? Mike Piper wrote a book Investments plain language ” and started selling it on . The interest was so high that he went on and wrote a whole series of books. Now they bring him six figures.
Special services called microstocks , allow you to buy and sell unique photos and images ( created in graphic editors like Adobe Photoshop, Adobe Illustrator…).
If you like taking photos, editing images, creating interesting pictures in Photoshop, you can earn decent money just by selling your images.
The bottom line is that you put up for sale your photos, but the buyer does not redeem it, but simply buys the opportunity to download it in the highest quality. Thus, one photo can be sold an infinite number of times.
We will give an example of one of our familiar designers. Six years ago he drew icons, pictograms and other web elements. He did this for 3 months. All of his work is up for sale on Shutterstock. In the first months, he got into the tops and earned about $1000 per month.
Over the following years, his earnings fell smoothly, but Last year (sixth) his profit is stable at the level $100 per month. This is despite the fact that for 6 years he has not added new images for sale. Since it is Shutterstock's policy not to reveal the designer's earnings, we will not reveal the identity of the creator.
The most famous and profitable microstocks in the world:
This type of passive income on the Internet brings a lot of money: for example, a Youtube channel Mister Max who makes videos about children earns his owner 2-7 thousand dollars a day.
To create passive income from video clips, you need to create a series of useful and always relevant videos. It can be instructions like “How to make…”, “How to cook…” that people will find and look through in the long run.
You can connect Google contextual advertising to each video, plus YouTube itself will pay you for every 1000 views.
If you know something that others do not know, then you can start a series of training courses. The format of the master class can be different: a video, an audiobook, instructions on the site, an offline school. It is important that your students are satisfied with the quality of the material and receive new knowledge.
On video lessons, you can earn 20-50 or more dollars daily. For example, courses on playing the guitar and other musical instruments, drawing lessons, foreign languages and others are very popular. More highly specialized knowledge can be sold more expensively. For example, trading rates on the NYSE can cost from $500 .
On texts, photos and videos, creativity that brings passive income is not limited.
Music is an interesting direction, which is also not suitable for every user. To create music tracks, it is enough to learn how to work with programs like Fruity Loop or Adobe Audition, Steinberg Cubase and etc.
All presentations, sales, videos… are accompanied by background music. These are the first buyers of your tracks, without them they simply cannot.
Just as microstocks sell images, they also sell audio. The most famous audiostock is AudioJungle.
Anyone can create their own website. A little money will have to be spent on a domain name ( in the zone.ru - from 150 rubles. in year) and a hosting that will display your site on the Internet ( from 900 rub. in year).
The main difficulty is finding interesting information that will really attract readers. It is not necessary to maintain a blog or a live journal, some resources are gaining popularity thanks to convenient tools: calculators compound interest, parsing currency quotes, a free SMS widget, an online translator and much more.
The average monthly earnings on the site varies from $50 to $1000, depending on the number of visitors, resource popularity, citation index, etc. It will take from 6 months to 3 years to promote the site.
Let's take a closer look at how you can make money on your own website.
On almost all sites you can find ad units from Google and Yandex. Each click on them brings the site owner from 20 cents to several dollars. The more visitors you have, the more clicks on your ads.
If you add 1000 useful articles to the site and stop visiting it, you will continue to earn for many years to come, since your site will remain on the Internet and will work around the clock.
Many companies and just other sites order the purchase of links on other sites so that search engines see that many people are talking about their site, thereby increasing their ranking in search results. Customers buy paid reviews, praise articles, or just posting a link anywhere.
Selling space on the site for such reviews can bring the owner 100-300$ per month. However, for this, your site must have a lot of visitors and good search engine rankings. This way of earning is suitable for a site that is more than a year or two old, however, it will be an additional source of income that does not require special efforts from you.
Another way to make money available to everyone: maintaining a group in social networks. networks. To create your own public, just register on the site and go through a simple procedure.
This is where content comes first. Finding interesting unique information is difficult: be prepared for brazen theft of your content. But if you attract 100 thousand subscribers, then the monthly earnings will be in the thousands of dollars.
At in large numbers subscribers, advertisers will find you every day. For example, well-known bloggers have an advertising post on Instagram worth from 500 000 rubles. Even if you have about 30 thousand subscribers, you can already sell ads through special services.
Everything seems simple here: we buy a house or an apartment, put it on Airbnb or Booking, rent and make a profit.
Such passive income from each premises can bring 5000-30000 rubles per month and cover utility bills.
More profitable ways receiving passive income from real estate is the rental of garages and commercial real estate. A garage costs 5-6 times cheaper than an apartment, while the cost of rent is only 2-3 times lower.
That is, instead of one apartment, it is more profitable to rent 5 garages.
But the apartment is different. If you have a whole package of services - linen, cleaning, internet, TV, a beautiful view, food, parking, and so on, then the cost here will be different. A lot of people own several properties like this, hire 1-2 people to maintain them, and get a decent passive income.
By analogy with real estate, there are different options for earning money. If you have unused property that can be rented out, consider making a profit from it. After all, when a thing lies dead weight - it is a liability, if you receive income from its existence, it turns into an asset.
Thus, by investing in items that can be rented, you can recoup and then receive a net passive income.
Of course, this is one of the first options that comes to mind. You can buy stocks and earn on their growth in price. Many people think that this method is not capable of bringing in a lot of money, but we will show one of the examples of our transaction for the purchase of Peugeot shares, and what came of it.
In order to buy shares on the exchange, we went to the broker's platform, selected shares and pressed the button Buy(BUY):
Within a couple of days, the value of the shares rose and this brought us profit:
To get money into your account, you need to sell the shares back, that is, close the deal:
Now we have profit in our account. The results can always be viewed in the tab Deals, below the graph:
Buying shares can be a good source of passive income, even if you do not want to open trades often, you can buy shares for months and years, by the way, you can also receive dividends from a broker.
Trust management in financial markets is one of the most advantageous species passive income. can bring on average from 60 to 120% per annum in passive mode.
Many brokers offer trust management in the form of investment funds, PAMM accounts, copy transactions of managers.
If you look at the charts of stock indexes, you will see that their returns are not great, but they always are. - these are shares of companies that buy shares from a basket of stock indices and their value dynamics is fully correlated with stock indices. When you buy one share of an ETF fund, you buy the entire basket of the index.
At the moment, ETF funds are very popular in the US and Europe, because these are portfolio investments that are highly protected from all kinds of risks.
In addition, there are industry ETFs, balanced and uncommon, such as Whiskey ETF, where stocks of whiskey producers are in the basket.
This is a promising way to earn money, because it allows you to fully control investments. We do not mean an active business where you have to work yourself. You can organize or buy a company with an established work structure, with a director and his deputies.
If you turn to the Internet, then there are even more examples. You can hire developers and create some kind of automatic service, program or service, which will then bring you a stable passive income.
Now such types are services for checking the uniqueness of texts, analyzing sites, collecting data, creating presentations, logos, etc.
Consult with a lawyer: you may be eligible to participate in state program support. A nationwide youth housing loan project could make it easier to buy an apartment. BUT maternal capital and a family support program will help support children.
Find out if you are entitled to a benefit from the state, you just need to apply for it?
Many people do not notice the advantages in their work, they get used to it and it seems to them that no one appreciates it.
A striking comparison is the artists. Here they will draw a cat and everyone will say - wow, how beautiful ... but the artist believes that there is nothing special, everyone can do it.
Perhaps your job can provide a lot of people with some kind of bonus, as if along the way to your main job. Maybe it will be Additional services or knowledge that would be useful to people.
If you work in the tax office, then your outside advice would be useful to many. If you are a chef, then many people would benefit from your advice on recipes that you can sell - write a column on the site, publish a book or blog ... And so on.
Make money doing what you would do anyway. For example, if you like to play games, then you can also earn money on this. In addition to tournaments, there are many games where they sell characters, items ... that you can earn in the game, and then sell for real money.
As we can see, the ways to get extra income weight. But they are always associated with the use of existing resources or the creation of a new product.. Before organizing new source passive income, ask yourself a couple of questions:
The choice of a source of passive income ultimately depends only on you, do not shift this responsibility to others. In addition to the well-known methods, you can come up with something of your own, and this will be an even better option.
And finally, a couple of tips:
Passive income is the key to a good life. We have listed a dozen ways to create your own source of extra income, but the list goes on and on.
The fact that you have thought about the need for passive income already elevates you above most of the people around you. There are many methods available to each of us to improve our financial condition, but they need to be worked on. We wish you good luck in organizing sources of passive income and achieving financial independence.
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A few decades ago, in our country, the concept of income was almost one hundred percent consistent with wages at a state-owned enterprise - almost without options. The accumulated savings people kept on the passbook. Now, the ways to ensure existence are just a wagon. Someone has opened his own business, someone has invested in securities and lives happily ever after (why work now?), unless he has already gone bankrupt. Someone profitably rents an apartment in the center of the capital and also does not hurry to the machine every day. Well, someone (and most of them) still gets up a little light and goes to the office or to production.
We all somehow receive some kind of income from our own activities, on which we live. But not everything is so simple. It turns out that income is different. And it can be different - active or passive. What sometimes the modest Russian rentier, renting out the "extra" odnushka on the outskirts of a provincial town, does not even guess. Well, let's talk about this topic - today's article is devoted to the type of income that any working person has encountered.
The term "active income", derived from the English active income, refers to one of its types, based on the provision of services. The nature of its receipt is opposite to other types - passive and portfolio income. The name itself suggests that the recipient is in an active role.
With passive income, the sources are those in which the recipients are not directly involved. Here is an example: a specific person works for a salary and at the same time rents out an apartment. That is, both types are available. Income from active operations- this is wages, the second - rent payments. Portfolio income, which is considered by some economists as a kind of passive income, involves investments as sources.
All the various types of active income come down to money paid out in the form of wages. It can be a fixed salary or an hourly wage. This also includes all the available variety of overtime, bonuses, tips and so on. Commissions paid for the services of agents (for example, for the sale of real estate) are also included in this article. That is, it is quite within the power of everyone to create an active source of income - it is enough to get a job. After all, no one took away the ability to work from us.
This form (active income) also includes your profit if you "rule" your own business and participate financially in it. We are not talking about buying a ready-made business with the sole purpose of making a stable profit without the intention of developing your own business. In particular, in tax office It is customary in the United States to consider regularly doing business with financial investments as the basis for classifying the income received as active.
If you do not fully understand what the difference is, is it active or passive income (when it comes to profit from your activities), you can resort to the services of a financial consultant. You can figure it out on your own by analyzing the criteria that are used for the same purpose tax services states.
The vast majority of options involve the payment of active income to its recipient in its pure form, that is, after all possible tax deductions. Salary in this case is a typical and most common example. This rule does not apply individual entrepreneurs or those who work as an independent contractor. These people, when receiving money, are personally responsible for the taxes paid and the timely declaration of income.
Now let's touch on the concept of active income, its advantages and disadvantages in more detail. We will also consider the current topic "active and passive income - specific differences" in order to finally clarify for ourselves all the nuances of the issue.
In fact, all types of income to the personal budget can be attributed to only one of its two types - active or passive, since the investments mentioned above (portfolio income) are one of the varieties of the latter. At the same time, types of active income are all those ways of earning money when the flow of money into a person’s personal budget depends on his own labor.
These are all types of traditional work, part-time work, part-time work - both in real life and on the Internet. The main cardinal difference between active and passive income is that the latter allows you to replenish own budget without daily labor efforts, but at the same time it requires investments of initial capital, sometimes very, very significant.
Is active income possible on the Internet? And if so, what is it? For some reason, many ignorant citizens think that nothing can be earned on the Web - everything is completely a scam and attempts to scam money. Others go to the opposite extreme and, having read the tempting promises of instant enrichment, with which the World Wide Web is now littered, for months and years they are looking for a magic money button.
Both of them are wrong. You can make money on the Internet - just like in real life. We are talking about performing specific actions - writing articles, remote work by anyone - a designer, an accountant, a consultant. It's not about whether you're online or not. If you perform certain tasks, receiving a stable linear income for this, that is, changing your own time and labor for banknotes(albeit in electronic currency) - we are talking about the same active income, that is, about the most ordinary work, albeit with the use of the latest technologies.
Another thing is an Internet business, when, for example, you create your own e-book(or by purchasing the rights to resell a similar one, which is called reselling), launch it into circulation. Such an information product can be sold an unlimited number of times.
Once you've got your business up and running from a technical standpoint (payment, customer feedback), you can relax - no further regular effort is required on your part. Why not passive income?
As examples of it, not in the virtual, but in the real sphere of our life, one can name receipts from deposits, dividends on securities(the same portfolio income), the rental of property (not just housing), the income received from investing in any asset management companies.
The traditional source of it, known to our parents in Soviet times, is the placement of money on Bank deposit(on a passbook). This option has all the signs of passive income. This is the need to have initial capital, the ability to choose an investment object and all the inherent risks in the form of instability on financial market and the likelihood of a major or even complete loss of the invested. Whereas no one will take away the ability to work and sell your own working time (we are not talking about old age or loss of working capacity due to illness).
Based on constant labor, the value of the income (active) considered by us in the article is directly proportional either to the results of the expended forces or to the spent working time. But common feature it is the cessation of receipt of money in the personal budget immediately or after some time after the termination of employment - when the active sources of income run out.
What does "after some time" mean? Let's say you were fired, and you become registered with the employment center. You'll be on welfare for a while. But, formally speaking, these payments can already be attributed to passive income, which you receive on the basis of the previously invested capital - your work at your previous job.
What is the difference between active and passive income? In contrast to the first, the second assumes the possibility of income even when you do not have to work. To create such a source, one way or another, you will need to invest a considerable amount of labor or money - passive income does not come from nowhere by itself.
For active income this requirement appears only when it comes to creating your own business. Basically, people sell their own labor - most of us have nothing more to sell and invest.
I wonder how to classify the situation with the receipt of a pension? Formally, this can be attributed to passive income. But if you think about it, it's an illusion. The lack of investment in this case is deceptive. In order to receive his modest income for life, the pensioner spent his whole life investing in the form of contributions to the pension fund.
Are you familiar with the concept of diversification? This is synonymous with diversity, and in the case of active income, there are very few options. Indeed, human capabilities are by their very nature limited to fairly narrow limits. You are physically unable to combine active earnings in two or three or more jobs. Most often, we receive active income from only one source in the form of the main job and occasionally earn extra money (but these amounts are no longer fundamental).
Diversification of another income - passive - is much wider and is not subject to restrictions. No one is forbidden to break the available capital into parts, each of which can be invested in absolutely any project that can bring passive income.
It is the weak diversification of sources with active income that carries a high risk of losing both it and the capital invested there. A typical example is that you were fired from your job or the authorities closed the business you organized. In this case, you will lose both.
With strong diversification inherent in the reverse option, the situation is much better. If one of the sources of passive income is closed or goes bankrupt, its owner will receive profit from the rest.
Almost always, active income is characteristic mainly for those who, in their own way, financial condition exists below the poverty line. The few exceptions are those who occupy a serious position or have a valuable specialty with a high salary, and the percentage of those who are not too high. These people can count on a certain financial stability, but at the same time they run into a permanent ceiling, that is, dependence on their own well-paid work becomes decisive in their lives. If, due to some unfortunate set of circumstances, a profitable place is lost, the source of income will instantly cease to exist for them.
Those who are well above the poverty line tend to have some capital and tend to move from active to passive income. They create at first a small source of it, then gradually increase it. With a skillful approach to business, such people have every chance of financial independence in the future.
School, the state and parents taught us that in order to achieve success in life and financial stability, one should work hard, having first mastered a good specialty that is in demand. In practice, the situation looks completely different. Take a look around: are the most financially successful people the ones who work tirelessly? On the contrary, these honest workers most often cannot break out of poverty for years and decades, living life from paycheck to paycheck.
The winners are those who managed to save at least some amount as initial capital, then profitably invested it and continues to look around in search of new promising sources of investment. It is from the layer of such people that millionaires and billionaires come out. Rereading their success stories, you come to an unequivocal conclusion - if there is only active income in your life, and you haven’t had to think about anything more than that, your chances of success, alas, are minimal.
Daria Nikitina
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is one of the key terms in investing. Passive income is closely related to financial independence. One way or another, a solid part of the articles on our site comes into contact with the idea of passive income. Active and passive income are two sides of the same coin, but there are fundamental differences between them. Also, both of these types of income have their advantages and disadvantages. We will talk about this in today's article. We will pay a lot of attention to passive income, because this is what we are striving for.
In this article:
Active income- what we are all used to. The salary that a person receives while working in a hired job refers specifically to active earnings (it is also called linear). This also applies to all sorts of "part-time jobs", freelance, business (in part). That is, you did the job - get a reward (one-time). As soon as a person stops working (leaves his job), the income stops coming.
In the case of active earnings, you need to spend your time and (or) energy on getting it - this is a prerequisite. That is, if you stop fulfilling your official duties (refuse to work) and sleep instead of work, then you will certainly be fired and your income will dry up. But this is understandable.
The main advantage of active income is that you get everything at once.
We summarize the pros and cons of active income.
Note that most people know only one way to get money - work at an enterprise (the notorious active income). The word “sign” here means that in real life (and not somewhere in dreams), in practice, most people can only earn money in an active way, that is, by working in the generally accepted sense. However, this is not the only way to generate income. There is another, much more pleasant way, well known among rich people.
- this is income received without serious expenditure of time and effort on your part. Roughly speaking, this is when you do not work, but the profit continues to flow to you. How is this possible, you ask? The fact is that passive income (also called residual, non-linear income) can be obtained from the assets that you have. Strange, right? In theory, active income should come from assets, not passive income. And everything is just the opposite.
However, not everything is as rosy as it seems at first glance. The problem is that before receiving passive income, you need to acquire an asset that will bring it. And there is no asset - there is no passive income! Thus, the whole difficulty is to create a source of your income. To have a profit from capital (real estate, shares), you first need to take money from somewhere. And the beauty is that you need to do this once and then just “milk the cow”.
Passive income is a reward for work done once.
As a rule, the creation of passive income, the level of which is at least comparable to the level of salary (or other type of active income), requires much more effort and (or) time than active earnings. And how did you want? You have to pay for everything in this life.
Also, creating passive income is a very slow business and can take years.
Example. Borya works as an engineer and earns 20,000 a month. But Borya wants to accumulate capital, put it on a deposit in a bank and receive all the same 20 thousand, but no longer working. In order to “turn a fairy tale into a reality”, a capital of 2 million 400 thousand rubles is needed, invested at 10%.
And how much does he have to hunchback to earn 2 million? Not everything is as bad as it seems. Firstly, this is a very primitive example, a yield of 10% is very small. Secondly, as mentioned above, creating passive income is not a quick business, so you need to be patient and purposeful. Thirdly, there are methods (rules), the use of which leads to acceleration and increase in income. If a person has set himself the goal of creating a passive income for himself, then he will slowly and confidently go towards the goal, increasing his income. Fourth It's never too late to start - after all, you can start
To achieve financial independence, you can use one of two ways to make money - active and passive income. There are differences between these types of income and both have their pros and cons. Let's go in order. What is active income?
In simple terms, active income is a monetary reward for the work done by a person. All types of additional part-time jobs can also be attributed to active income. The principle of operation of this scheme is simple, performed the work - received a salary, did not perform or fired - was left without a source of income, it works when hired labor is used.
Consider the positive aspects of active income:
Negative points in obtaining active income:
Along with all the usual types of work in enterprises or in any commercial firms (that is, active income), there is an alternative - passive income. This type of profit is very common among wealthy people. Here we will talk about it in more detail.
Passive income is a profit that comes to a person constantly, for the work he has done once. For passive income, there is one condition - the presence of assets. An asset can be various kinds of real estate, shares, interest-bearing bank deposits, and so on. That is, a person does nothing, and money flows to him in a stream.
But the whole difficulty lies in the presence of this asset. That is, there is no asset, and there is no passive income. This is the main difficulty in obtaining passive income. It is paramount, and for this you need your initial cash investment.
Also, in order for passive income to begin to bring real profit, it is necessary to make a lot of effort and spend a lot of time on it (maybe a year, or maybe several years). But the reward for this will be a constant stream Money at a time when no action is required from a person.
One of the most pleasant differences between passive and active income is that you can make a profit with a minimum of effort and doing what you want.
normal">Active and passive income available to everyone to varying degrees. You just need to believe in your strengths, abilities and have enough time to implement all your plans.
Mikhail Arslanov
