Passive income is the money one can earn by putting in effort, investment and time upfront. Kavan Choksi / カヴァン・ チョクシ points out that passive income is meant to add to the main income of a person, and not replace it. As opposed to that, which usually grows slowly, passive income can provide people with a steady cash flow and help them to balance market ups and downs. Passive income can be a smart and strategic way to support one’s financial goals.
Kavan Choksi / カヴァン・ チョクシ sheds light on a few ways to earn a passive income
Passive income can be an excellent way to generate extra cash flow, whether one is renting out a property or running a side hustle. It can help people to earn a bit extra during good times, as well as be a valuable financial cushion in case they suddenly become unemployed, decide to voluntarily take time away from work, or even if inflation keeps chipping away at their purchasing power.
There are several ways to earn a passive income, like:
- Dividend stocks: One of the simplest ways to earn a passive income is by investing in dividend stocks, which distribute part of the company’s earnings to investors on an annual or quarterly basis. Many dividend stocks also increase their payout over time, enabling one’s future income to grow.
- Rental properties: Investing in real estate and earning rental income is another excellent way to build passive income. Long-term rentals, in particular, may provide stable monthly income and also have the potential for value appreciation over time.
- High-yield savings accounts: A high-yield savings account can also help people to earn passive income. It is especially ideal for growing one’s emergency fund. Because the interest earned is automatically added to the account balance, savings can grow steadily over time. These accounts are also federally insured, making them a secure place to store emergency funds while still earning a modest return. Since interest rates can vary between institutions, comparing available options can help maximize earnings.
- Selling digital products: Over the years, selling digital products has emerged as a popular way to generate passive income. Individuals with creative or technical skills can create products like eBooks, online courses, templates, or software applications. Once developed, these products can be sold repeatedly with minimal ongoing costs. Digital products eliminate the need for physical inventory, shipping, or manufacturing, and they can reach a global audience instantly.
As per Kavan Choksi / カヴァン・ チョクシ, due to today’s unpredictable job market, having multiple streams of income has become increasingly crucial for financial stability. Finding the time to juggle a full-time job and a side hustle can, however, be quite difficult. This is where a passive income source can help. By creating a passive income stream, one can keep earning money without having to constantly trade their time for it. One can continue working a full-time job, pursue their passions, or even go on a well-deserved holiday, while their passive income streams continue to generate revenue.
