“If you
don’t find a way to make money while you sleep, you will work until you die” –
Warren Buffett
Passive
income can become a tool to cover your costs. That will allow you to focus on
things you want to do rather than earn to meet sustenance. Here are just five
of those for your review:
(i) Own dividend payment shares
As a shareholder of a dividend
paying company, you collect cash rewards for the financial risks of your
investment. That’s passive income from hard work of employees and management.
(ii) Own rental real estate
Being a landlord is a time-honoured
approach to generating cash. Rental income has to exceed cost of owning the
property. Otherwise invest in Real Estate Investment Trust, which are generally
bound to payout high dividends.
(iii) Silent partner in a viable business
This limited partnership approach
will mean financial support without being involved in the day to day
operations. Hopefully, the business adopts a high distribution to encourage
investors.
(iv) Loan money to Company/Government
Investing in corporate bonds or P2P
structures could be reasonably lucrative. And bondholders always rank ahead of
shareholders. Select the P2P funder carefully by reviewing track record and
default rates.
(v) Pay off Debts
Paying of debts is the biggest effective
raise of all. Money no longer is going towards debt service. That means you
have more breathing room to meet any new costs.
The aim is to work to cover costs of
living and hopefully have something extra. And if you get to control your time
and have better financial flexibility, then you are making money while you
sleep.
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