A passive income is an income that a person receives on a regular basis, with little or no effort to maintain it. Essentially, a person makes an initial investment, then sits back to reap the benefits of a passive income that comes from the initial investment.
As was mentioned above, passive income can be earned by gathering interest. By saving money in a financial institution, a person can gain a certain percent of interest off of the money in that account. By choosing a bank or financial institution that offers a high interest rate, a passive income is easy to grow.
A CD is much like a savings account, but often has better interest rates. Building a CD ladder, or getting multiple small CD’s instead of one big one, is a great way to generate a passive income.
A purchasable investment that will pay a person a certain amount for each year of the rest of their life. This is usually a percent amount of the original investment purchase price.
By utilizing a personal talent, a person can begin to jump start their passive income in that way as well. For example, if a person is good at writing, they may be able to publish a book that they can gain royalties from.
Having a plan is the cornerstone to successfully growing a passive income. Of the ten different ways to grow a passive income, this step is going to need to occur every time. By planning to create and maintain a passive income, a person will know exactly what they need to do to continue to gain the passive income, and how long they will gain that passive income for. They will be able to get a decently accurate figure for how much passive income they will grow over X amount of time. With successful planning, even a small amount will grow over time.
Invest in Rental Properties
A common way to grow a passive income is by investing in a rental property. Simply meaning, a person buys a property, then rents it to tenants, or uses a rental company to rent to tenants for them. To decide if it is a plausible passive income source, they would need to figure out how much to charge to make a profit after paying property taxes, a mortgage, and any potential repairs. They also need to choose a good location that has a good market for renters, and choose good tenants.
Invest in Real Estate
Much like investing in rental properties, start by buying a property. The idea is to buy a property for as cheap as possible, fix it up, then re-sell instead of renting. For this to be a plausible source of passive income, the market must be good, and the person investing will need a decent sum of money for initial investment.
A P2P loan is between a lender (the person trying to make money) and a borrower, which is facilitated by a third-party. A person loans the borrower money, then gets back the original amount, plus a percent of interest.
Use Cash Back Credit Cards
If a person uses credit cards to make day-to-day purchases, this is a good way to grow a small passive income. Instead of buying and getting nothing back, many of these cards offer 5% back on purchases. By immediately paying back what was used on the card, a person can avoid interest fees, meaning they made 5% on something they were going to buy anyway.
Use Rebate Programs
In the age of the smartphone and internet shopping, there are a variety of companies that, much like the cash back credit card, offer a rebate for certain products purchased. Yet again, a person is making money on something they were going to buy anyways. All they do is submit their purchase to the rebate program and wait for the cash to accumulate.