hat is passive income? Is being able to earn passive income while lying down? Not only those who like investing and managing money need passive income. Daily income business without investment
Petty bourgeoisie can also have financial freedom! Compare the advantages and disadvantages of 10 “passive income” options, which one is suitable for you?
What is passive income? Is being able to earn passive income while lying down? Not only those who like investing and managing money need passive income. As the average life span increases, how to save enough funds to support a senior life and avoid becoming a dirty old man is a topic that everyone must face. There are many ways to create passive income. Only by planning your goals and choosing the method that suits you best can you create the greatest benefits. This article compiles 10 sources of passive income. Which one is suitable for you?
What is passive income? Passive income does not mean earning money while lying down. Developing multiple incomes is the future trend. 10 sources of passive income, find the one that works best for you.
Three things you can learn after reading this article:
As life expectancy increases and the need for long-term care increases, creating passive income will be necessary.
Everyone can find the option that suits them best among the 10 ways to increase passive income.
Before thinking about passive income, saving a pot of gold with a goal is the key to getting closer to financial freedom.
Why have passive income?
First of all, we need to understand what passive income is?
Passive income refers to income that can be generated continuously whether you are working or not.
The importance of passive income can be understood from the classic saying of Warren Buffett: “If you don’t find a way to make money while you sleep, you will work until you die. You will work until you die. )”
In other words, not only those who like investment and financial management need passive income, but if you have the dream of retiring and welcoming the second half of your life, you should pay attention to passive income.
In addition, as the average life span of human beings increases
According to statistics from the Ministry of the Interior , the average life expectancy of Chinese people has reached a record high of 109 years, reaching 81.32 years. However, the latest “Actuarial and Financial Assessment of Labor Insurance Ordinary Accident Insurance Rates for 2011” report released by the Bureau of Labor Insurance of the Ministry of Labor of the Executive Yuan points out that it is estimated that by 2017, the accumulated balance of the labor insurance fund may turn from profit to loss .
This does not include long-term care costs that workers may have to pay in their later years. The latest statistics from the Ministry of Health and Welfare found that the “unhealthy years lived”, that is, the time an elderly person is disabled and bedridden before death, reaches a record of 8.41 years.
With the Labor Insurance Fund, one of the sources of pensions for workers in Taiwan, a bankruptcy crisis is imminent; on the other hand, the average life expectancy of workers has been extended, and the cost of maintaining a living after retirement has only increased. How to create “passive income” is an issue that everyone has to face.
10 Ways to Create Passive Income
Common investment methods include stocks, funds, and ETFs, but for petty bourgeoisie whose income is not generous enough, there are other easier ways to get started. Here are 10 ways to create passive income compiled by “Cheers”.
advantage shortcoming Suitable
stock market High degree of freedom and can be operated with a mobile phone Unstable and high risk Those who can pay attention to investment market trends every day and can tolerate greater risks
fund Leave it to the experts, it doesn’t take much time Need to pay higher professional management fees Those who lack financial knowledge and tend to spend money to hire a professional team
ETF Leave it to the experts, it doesn’t take much time Need to pay higher professional management fees Those who lack financial knowledge and tend to spend money to hire a professional team
self-publishing The threshold is lowered, allowing your works to circulate in the market It takes a lot of time and effort to create Those who are interested in writing, or have the ability to enrich words and images
Licensed digital content Diverse applications may bring a series of other benefits Pay attention to the originality of the work to avoid disputes Creators who are interested in long-term business, are interested in creating content, and are willing to continue to produce
Operating self-media Opportunities to combine interests and bring fame There are so many online competitors that they are approaching saturation Creators who are interested in long-term business, are interested in creating content, and are willing to continue to produce
Place ads The threshold is low and existing resources can be used Poor ad quality reduces impact Creators who are interested in long-term business, are interested in creating content, and are willing to continue to produce
affiliate marketing No need to prepare your own services or products Because services and products are not produced in-house, there is a lack of autonomy Key opinion leaders or users of some products
automatic machine Lower cost, does not take up time Lack of specialness, also reduces profits as rent increases Those who have a dream of opening a shop, or have a shop at home and do not need to pay rent
Online courses Good content can bring long-tail effects and continuous income It requires a certain level of expertise or popularity, otherwise it will be difficult to win. Authoritative experts in a certain field who are eloquent and have teaching concepts
10 Ways to Create Passive Income
Passive income method 1: Invest in the stock market
When it comes to convenience and diversification, investing in stocks can be said to be a market within reach of most workers. In Taiwan, stocks, mutual funds (including stock, bond and balanced funds), and ETFs (including Taiwan and US ETFs) are the investment tools most commonly used by ordinary people.
The reason is that the stock market is highly volatile, which can sometimes bring huge investment returns quickly, but the risk is also high; and there are many people who specialize in buying official stocks with relatively low unit prices and receiving cash dividends, so many people regard it as Create a source of passive income.
The stocks that are most commonly included in stock investment portfolios include financial stocks (prices are close to the people, business is stable, and there is government support), telecommunications industry (oligopoly advantage, stable profits) and people’s livelihood industry (have channel advantages, and are less affected by the boom).
However
investors should note that in addition to fundamentals, individual stock investment must also take into account chip aspects, technical aspects and international trends. Chen Zhiyan, who once served as vice president of Citigroup and founded Alfa Financial Technology in 2017, reminded that stocks that are performing well now do not mean they will be good in 10 years. Therefore, when buying stocks, you must not put your eggs in the same basket.
Passive income method 2: Buy funds
Financial products that can also bring dividends to investors include mutual funds. In Taiwan, 6 of the top 10 overseas funds with the highest subscription amount in September 2022 are fixed income funds or balanced funds with dividends. The first is “Allianz Income Growth Fund”, the second It is “UBS Fund”.
However,
fund investment is not without risks. If the economic climate is good, the fund can obtain dividends that are better than the market; but if the market climate shrinks and an unexpected situation such as a collapse in oil prices occurs, the default rate will increase, which may affect the fund’s operations.
In recent years, funds have also been criticized for their relatively high expense ratios . Even if they are professionally managed by fund managers and bring high dividends, handling fees, fund custody fees, distribution fees and other fees must be deducted before it can actually fall into the pockets of investors. , the total expenditure exceeds 2%, almost eating up most of the performance.
Passive Income Method 3: Buy ETFs
In response to the problem of high fund fees, ETFs have become a hot product among global investors in recent years. The investment concept of ETFs is similar to funds. The biggest difference is that funds select stocks by professional managers, while ETFs buy shares based on existing indexes in proportion to market value. The shareholding list is transparent and the expense rate is relatively low.
The total number of domestic ETF beneficiaries will exceed 5 million in August 2022. The top three largest ETFs in the first half of 2022 are “Yanta Taiwan 50 (commonly known as 0050)”, “Yanta High Dividend”, and “Cathay Sustainability” High Dividends”.
Method 4 of passive income: operating self-media
With the popularity of social media, the channels for obtaining information are diversified, and becoming a self-media creator has become an emerging source of income. Common ways for creators to make money include “traffic monetization”, “industry matching”, or relying on personal influence to accept projects, endorse products, create brands, etc.
Platform attributes are factors that creators need to consider before operating an account. Social platforms such as YouTube, Meta, Instagram, and Douyin are all based on videos and pictures. People who are not good at performing in front of the screen and prefer to communicate through text can consider blogs such as Medium and Pixnet; if you only If you want to “show people with your voice”, you might as well consider podcasts, which have become very popular in recent years.
Passive Income Method 5: Self-Publishing
Self-publishing is still niche so far, but it is still an option. As e-books become more and more popular, the barriers to independent publishing have been significantly lowered.
Currently, Taiwan’s e-book platforms, such as Google Play Books, Kindle, Rakuten Kobo and local players Readmoo and Pubu, have launched self-publishing services. In terms of profit sharing, Kobo and Readmoo charge 30% service fee, while Pubu charges 35%.
Passive Income Method 6: Licensing Digital Content
All text, pictures, music, videos, and even all kinds of electronic creativity are digital contents. When you have good works, you can collect relevant fees through “authorization”.
Since licensing involves “intellectual property rights”, creators must pay attention to the originality of their works to avoid disputes. The channels for licensing digital content are quite diverse, ranging from digital images to NFTs, which are very popular this year.
The advantage of licensing digital content is that it can easily generate a stream of passive income. For example, you can collect your drawings into a volume and publish an e-book, or you can authorize it to be made into an IP by a playwright. After being made into various peripheral products, you will also have the opportunity to draw a commission.
If you are a photographer, illustrator, graphic writer or other artistic worker, you can register and upload your creative content to a public content library to increase business possibilities. For example, on the world-renowned photo gallery Shutterstock, many designers and photographers will Upload your work as commercial material.
Passive income method 7: Advertising
Assuming you choose to run a blog or website, not only will your content have the opportunity to be monetized, but when there are a certain number of visitors, you will also have the opportunity to place ads on the website to earn income.
However, there are two major things to note when placing ads. One is the source of advertising . If you are new to running a community and cannot find advertisers, you can use Google AdSense to find ads that match your website keywords.
The second is the arrangement of the advertising layout . If there are too many pop-up ads, the advertising layout is too cluttered, or the advertising content is not closely related to the readers themselves, it is likely to affect the readers’ reading experience and stop visiting the website. Therefore, it is necessary to place ads. Evaluate carefully.
Passive Income Method 8: Affiliate Marketing
Affiliate Marketing means earning referral fees by introducing other people’s services and products.
There are three roles in this business model: service/product provider, promoter and consumer. The promoter attracts consumers to purchase by introducing services or products. For each order completed, the promoter can obtain a certain percentage of the introduction fee from the service/product provider, which is also called bonus or rebate.
If you are not a creator and do not have your own products, you can consider this method. Most of the sales scenarios of affiliate marketing are online, so promoters only need to promote once, and consumers can use search engines, social sharing, etc. See the content repeatedly, thereby stimulating consumption.
Overseas, Amazon is a giant in affiliate marketing, and countless promoters make money by promoting products in the Amazon mall. In Taiwan, Bloglai has also launched the “AP Strategic Alliance”. Users only need to obtain an exclusive website to share, and consumers purchase from the website, and the promoters can get 2% of the purchase amount as a rebate.
Passive income method 9: Invest in automatic machines
In recent years, claw machine shops have sprung up in major business districts and night markets, with a density comparable to convenience stores. In addition, self-service washing machines and vending machines are becoming more common. These machines are potential opportunities to increase passive income.
Investing in a new claw machine is about 20,000 yuan per month, and a second-hand claw machine is about 10,000 yuan. The cost of replenishing a claw machine ranges from about 3,000 to 5,000 yuan. The store rent depends on the location. It is usually about It fell to 30,000 yuan. Compared with opening other stores, not only is the operating cost low, but it also does not require human supervision. Only replenishment and maintenance costs need to be considered. If you open it in a popular area, you may be able to earn thousands to tens of thousands of dollars per month.
Method 10 of Passive Income: Offer Online Courses
According to the foreign media “Real Passive Income Ideas”, “running online courses” has a profit rate of up to 90%, which can be said to be the highest-paying passive income channel.
The business model of online courses is that once you create a course, you can sell it to potential customers all over the world . If the quality of the online course is high enough, you may earn tens of millions of dollars from one course.
Of course, setting up an online course is not easy. In addition to the organized and systematic teaching content, there are also marketing costs, finding potential customers to buy, and paying for settlement with the platform.
However,
Real Passive Income Ideas” found that although the time cost of running online courses is 5 times higher than that of e-books, the income can be 10 times higher. In Taiwan, the price of an e-book is about 300 yuan, and an online course can cost 3,000 yuan or more, which shows that there is indeed a return on investment.
Taking the global course platform Udemy as an example, the number of popular courses can easily reach tens of thousands of students. Assuming that a course costs about NT$2,500, one online course can bring in NT$25 million in revenue, which is an astonishing profit.
Passive income ≠ “Earn while lying down”
The passive income model does not mean “earning money while lying down”, but it means adding a source of income for yourself with the least amount of effort.
To move from passive income accumulation to financial freedom, the only condition is “let passive income be greater than living expenses.”
Once this formula is established, workers can gradually get rid of the shackles of “working for money.” However, in order for passive income to grow enough to cover living expenses, it is necessary to prepare a certain level of assets in advance.
According to the 110-year Household Income and Expenditure Survey by the Accountant General Office of the Executive Yuan, the average monthly consumption expenditure per person is NT$23,513. Assuming that the average remaining life after retirement is 15 years, the annual living expenses of a couple are about NT$600,000 . This is equivalent to preparing a pension of 9 million yuan. If you want to pursue the popular goal of FIRE (financial independence, early retirement), the capital you need to prepare is even higher.
Example
, “If you want to roll a big snowball, not only must the slope continue to have snow, but the length of the slope must also be sufficient.” In other words, if you are not a “Honda wins” group, then time compound interest is what workers can best do A weapon to rely on. The longer the investment time, the greater the compound interest effect, the smaller the amount required, and the smaller the impact on daily life.
Regardless of the reason for accumulating passive income, workers must allocate their assets. Only by being prepared for danger in times of crisis and preparing early can you have the opportunity to achieve true financial freedom.
(Original title: 10 ways to create passive income, so that petty bourgeoisie can also achieve financial freedom )
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