Today I’m going to talk to you about the subject that I (and you!) care most about, money and passive income ideas, and I do so by addressing one of the most interesting issues in this regard.
I will deal with passive and automatic income, that income that becomes cash inflow without being linked to a specific job activity.
It is everyone’s dream to have a passive income of this kind but, unfortunately, there is so much garbage circulating on the web that sometimes I don’t know where to start when answering some of the blog readers’ questions.
If you’re attracted to this theme too, you can read on to find out if what you’ve heard about it is true.
First, though, let me welcome you to Just Money Tips, the #1 personal finance blog dedicated to anyone who wants to take care of their interests.
Coming now to us, I have prepared 10 best ways to have a passive income without strong efforts that deepen the theme of wealth.
Become an online investor
Online is full of opportunities and investments have become simpler thanks to specialized platforms suitable for both beginners and experts. One of these is definitely eToro, a very simple to use platform that allows you to independently purchase stocks, ETFs and indices.
Operating in the investment field is certainly one of the best ways to generate passive income as there are many financial instruments that are capable of generating an income without you being very active.
The eToro platform also allows you to activate a DEMO account with which you can operate using virtual dollars and then switch to the real version.
Open an account is very simple, you have to:
- visit the official website (click here);
- choose a DEMO or REAL ACCOUNT (in this case you have to deposit the minimum amount od 200$);
- start to invest.
Learn from the rich because they did it before you
The rich are not just people to be envied, but people from whom to learn how to move in the world of work and the economy.
No, I’m not talking about the great families, those who have accumulated wealth for generations, I’m talking about those who have become rich in the course of their lives, with the entrepreneurial implementation of an extraordinary idea, or simply with hard work and an idea perhaps not even that brilliant.
Remember that most of the world’s billionaires are first generation wealthy, which means they have not inherited substantial wealth from their parents and families. The latest statistics speak of 80% of billionaires who started from scratch, perhaps just like you.
Either invest time, or invest money
In order to have a passive income you must necessarily have an asset (or better yet, more assets) that generate an incoming cash flow.
These types of assets and assets are purchased with capital, capital that you either already have or you have to start working hard to accumulate it.
If you don’t already have a passive income, the only alternative is to work hard by increasing your income from your profession and start saving, to accumulate the capital needed to start buying those assets that can really help you generate a passive income.
Education matters, but do you really know which one?
Education is of fundamental importance in order to emerge, including economically. It is equally true, however, those hundreds of thousands of Italian graduates do not end up getting a good job or a good income at their disposal.
There are great entrepreneurs and great wealthy people who receive very important passive annuities that do not have degrees!
What really counts is the concrete education and not the famous “piece of paper”. Never confused education and a title.
With the former you can get ahead in life and make the right investments to really generate a passive income. With the latter at most, you can enter a public competition.
The first step is to invest in your own person
As you have understood up until this point, money doesn’t lie on the ground and automatic income doesn’t generate itself.
If up to now you have been able to bring home a normal salary and nothing more, it is because you do not have adequate professional skills that can allow you to earn more money.
At this stage, as I have explained on several occasions, rather than thinking about creating companies and/or quitting, you need to understand how you can immediately increase your income.
It becomes essential, therefore, to invest in yourself by attending courses that help you improve professionally or that allow you to develop a skill that others are inclined to buy.
Risky, yes, but only when you know what you’re doing…
It’s not easy to generate a passive income and it’s not enough to take risks to get important returns on the capital you’ve invested.
There are no profitable assets regardless (otherwise everyone would invest in them, don’t you think?) and there are no risks that are easy to calculate.
But you can limit your mistakes (and thus grow your capital much faster) if you decide to just do what you know. Don’t worry, no one was born a scientist and no one knows all aspects of modern economics.
On the one hand you should force yourself to choose areas you already know; on the other hand, you should invest time in your training: the real secret of the rich is that they have never really stopped learning.
You can generate a passive income even without money
It is not true that only those who have money can make money, especially through a passive income. I remind you, as I said before, that about 80% of the world’s rich population is first generation wealthy and therefore has had fortunes different from economic ones:
- An inclination for hard work: no one has ever managed to get rich with a stroke of luck – you could do that with gambling, but it’s always mathematically unbalanced in the dealer’s favor;
- A right mentality, that of generating wealth through processes and not through events.
The secret is the leverage
What do rich people do to secure cash inflow? They buy assets such as real estate, companies, shares, financial security of all kinds. With this type of activity, they can gradually replace their work with passive income.
Activities of this type have a great deal of leverage, while those that are closely linked to work have a very limited one: they are always linked, no matter how well paid, to the hours you work. And for everyone the day has 24 hours!
Savings are the best investments
Saving is the best of all earnings, because it can be generated with a little care and because it allows us to have more capital without having to work more for it.
With a few small adjustments you can save up to 40% more than you are able to set aside now.
What could you do with that extra money? It’s simple, you could start investing it in activities and assets that can help you generate a passive income.
Not all securities generate annuities, although…
Financial security can basically be divided into 2 families:
- Credit activities, where by necessity, unless the debtor goes bankrupt, you will have to regain possession of the paid-up capital and the interest that you have agreed on. This family includes bonds (government and non-government bonds), deposit accounts and postal passbooks;
- Risk assets, where you aim to grow your capital by increasing the value of the asset you bought. In this case you do not have an “annuity”, but you hope that the market will agree with you. Shares, ETFs, mutual funds and many other instruments belong to this family.
Only the first family is strictly revenue-generating, but it’s not the only one you should consider. Even with the second, with a sufficiently diversified strategy, you will be able to generate interesting annuities over a very long period of time.
As you may have noticed, it’s not so easy to create a passive income, but it’s not impossible either. In the hope that my article has helped you, I wish you good luck with your investments.
