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Income

Passive income

Believing in passive income is similar to believing in devils and watermen. A beautiful fairy tale for those who do not want to grow up.

Generations of financial advisors cannot afford the writer Robert T. Kiyosaki, who describes how to make a passive income in his book Rich Dad, Poor Dad. If you haven’t read this book, you haven’t lost anything important. In passive income, we do not see the answer to a carefree life in idleness, but rather an additional source of income through which you will reduce your dependence on your job or business.

Active activities

If you want to achieve passive income, you must generate a lot of effort before reaching it. And even when you get a source of passive income, you can’t rest on your laurels. Passive income needs to be taken care of. In particular, take care of its underlying asset, from which you receive income. We will show this with three typical examples, which commonly illustrate the benefits of passive income.

Rental property

The standard passive income is renting the property from which you obtain rent. In order to obtain financial resources from renting, you must own reality. You can either get it in a relatively easy way – for example by inheritance, or you deserve it hard. You just buy it for free money. It doesn’t matter if you have saved on the property over time or taken out a mortgage to buy it.

We will focus more deeply on the income from renting an apartment for which you have a mortgage. The investment apartment is nothing new for readers of the investia.cz financial server. In the case of mortgage co-financing the acquisition of an apartment, we would not label the resulting rental income as passive. This contradicts the initial thesis, in which passive income is separate from any related activity. In this case, you still have to make an effort to repay the mortgage properly. Revenues for loan repayments can be obtained from rent, or if the rent does not cover the repayment, then by additional resources. If you manage to cover the mortgage payments entirely with rental income, it cannot be described as a passive source of money, because the funds do not go to you, but to repay the principal.

Stocks

For stocks, passive income is more realistic than for real estate. With future income from dividends received, you gradually build a passive income asset. You also don’t have to spend a lot of money in the beginning, or get into debt as you do with real estate acquired on a mortgage loan. As with an apartment, when you buy shares, you will create an asset in the long run, from which you will one day pass passive income.

Unlike the previous methods, it is not necessary to create a source of passive income for the e-book through investments. Just make an effort to write and promote the e-book. An e-book infontaiment consists of writing a book, an e-book, and publishing it online. Most often it is a standard pdf file, which is wrapped like a book and its scope corresponds to it. Revenues from its sale fall into the category of liabilities.

To make a living in this way, you must either be known (at least in your target group or community). Getting to know is not a matter of one day, but of longer-term image building. Or create a truly unique e-book, which will be difficult in today’s postmodern times. An original idea is not enough. Alternatively, you will connect with a larger and better-known entity, such as a publishing house, and leave everything to it.

From this brief overview, it is clear that e-book infotainment is in fact probably the most difficult discipline leading to passive income. Nevertheless, it is popular mainly for low input costs.

A similar circle of thought, such as e-books, includes advertising on the web. For the highest possible revenue from advertising, it is necessary to take care of the website on which the advertisement is placed.