After all, who wouldn’t want to earn money without lifting a single finger? Given the rapidly rising cost of living coupled with an increase in wants of people, it always helps to have other sources of income when you are having a family in the 21st century.
A great person had said: “The greater the value, the greater is the challenges one needs to pass to get it.” Absolutely apt for this sector as one needs to really work hard at the starting stage before returns start flowing in at a seriously good level – be it investments or running a YouTube channel which has become the latest hot tech startup arena today thanks to Popstar Lilly Singh, Travel Vloggers Kara and Nate Buchanan as well as Aviation expert Sam Chui. You can even check out Journal Review – Passive Income Guide to know about other business opportunities which can generate passive income.
Selected cases below from Investment to Business Sector will give you an idea on how to strategize your work to be able to generate passive income returns at a seriously good level.
CASE #1: Start a Youtube Channel or a Blog
Starting a Youtube channel sounds cool, but the only catch is that in an already crowded market: How do you stand out? Before starting on this article, I had a conversation with a famous Digital Marketing expert at College. He said that he was able to earn his first bucks only after working hard to promote his channel for 3 years.
To keep things simple, there are 2 very important rules for running your Youtube Channel especially on a standalone basis:
- Promote your channel to your target audience AS MUCH AS YOU CAN.
- Be clear about the content which your channel deals with. Keep a Research team if you have to if you need assistance in building content.
YouTube has an ad partner program through Google AdSense which helps channel owners earn revenue from their channel. The only catch is that to initiate the process, you need to have completed 4000 hours of video viewing and have gained 1000 subscribers in the next 12 months since you register for the monetization process. Like I said- follow the rules above, work hard for a period. Just keep promoting your channel to your users and you will definitely win.
CASE#2: Investment in Monetary Assets
I was having a chat with my father sometime back over this. Monetary assets might have certain risks but there are certain options amongst them which might help you out of trouble. I will be descriptive because the data related to each of the Instruments is subject to change.
In my opinion, the best starting point is through investment in FDs. The reason being that they are safe and going by Indian tax laws, the FD interest earned by the holder (could be your college going kids) won’t be taxed unless he/she is working anywhere. This gives you the option to partition your earnings and lock them in FDs in the name of your spouse or children. Planning for the future, eh?
The next best option is the Provident Fund. It is a Fund where periodically both employer and employee make contributions to the fund which in return pays back to the employee on retirement a lumpsum amount subject to fulfillment of certain conditions. A very secure, easy to withdraw Fund system where a tax deduction is allowed to account holders under Sec 80C of Indian Income Tax Act (for instance). A safe way to start investing as soon as you start working. As of now, Employees’ Provident Fund Organisation of India is considering hiking EPF Interest rate to 8.65 % per annum. If it gets approval, then a big benefit awaits for you.
Shares registered in Stock Exchange work on the concept of Demand and Supply which comes up when companies do well individually thanks to their innovations working wonders (Apple Inc anyone???) or when certain Sector does well (IT Boom in 2000-2010) which helps companies belonging to that sector rake in the money.
Apple today has become among the most valued in the world in terms of share valuation simply because of the popularity of its products which earn money for the company plus its financing policies which make the share price go up as prospective investors believe they can earn rich dividends from Apple shares. Similarly, IT sector in India went through huge demand from 2000 to 2010 due to low cost but high quality technical labour availability which won contracts to their respective employers (TCS, Infosys, Cognizant) leading to rise in share prices at abnormal heights (TCS currently running at 2015 Rs per share in FY 2018-2019).
So, to do well in the share market one needs to be up to date with how the Business Environment is in each sector and how the Financials of the company is where he wants to invest.
Companies like Kingfisher Airlines have had fallouts simply because they couldn’t pay their creditors resulting in liquidation of the Business and shareholders losing their money. Also one needs to be prepared to keep investments in shares for long periods and not look for fast short term gains which are taxed at good levels in most national tax law systems.
Next up is Mutual Funds. Companies running such Businesses earn a fee over returns earned by investors. They collect money from potential investors in a common pool and allot units to each investor equivalent to the money invested by him. The benefit is the transfer of work of deciding on where to invest is passed on to experts, but there are legal hassles during withdrawal subject to company policy which must be followed.
So these are the top ideas from where you can earn passive income. Let me know your views and ideas if you come up with something different.