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How to Make Passive Income?

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The idea of passive income is getting more and more common as the years go by and with good reason too. Changing economy makes it hard to survive or live comfortably with just a single source of income for most people which is one of the reasons why people are turning to passive income sources. Another possible reason is that nowadays the realization that time is money is prevalent in most people. So people wish to generate assets even while they do nothing.

There are three main types of income – active, passive and portfolio income. In this article, we shine the light on passive income.

Passive income is a term loosely used these days. So, what exactly is passive income?

Technically, it is defined as the ‘net rental income’ or ‘income from a venture in which the taxpayer does not materially participate’.

Passive income includes earnings from sources other than one’s employer or contractor.

If you have a business on the side along with your regular job, then your earnings from the business is a type of passive income.

Another good example of passive income is trading like stock dividends. You do that for yourself in your own time.


Popular types of passive income include peer-to-peer lending, real estate, business and dividend stocks. People who actively make passive income usually follow ‘work from home’ and ‘be-your-own-boss’ lifestyle.

Earnings from this type of work are not always in the form of money. In fact, they are usually in the form of gains on stocks, retirement pay, lottery winnings, etc. Another point to keep in mind is that just as with active income, passive income is also usually taxable though there certainly are exceptions.

But just because passive income means earnings from doing something extra, does not mean that it is a way to earn money without putting in any effort. Like everything, to make considerable income, you have to put in enough effort and time. If you have a business on the side, then you need to pay attention to the business to actually get some good profit out of it. Just starting a business and letting it go running on its own won’t do much for you.


Now that we are aware of passive income, how it works and some basic information,




  1. You have some money set aside for emergencies – passive income acts as a cushion that you can fall back on when you need some urgent cash. You never know when something might happen. It is always a good idea to be prepared.
  2. You can spend your earnings from your passive income source without worrying about it affecting your current expenses.
  3. Passive income gives you the freedom of time and allows you to live a stress-free life without worrying about making your ends meet at the end of the month.
  4. You are the boss of your business when it comes to passive income. You have the power to decide what and how much you spend on it. Sometimes your passive income may generate more profits for you than your active income in which case you can decide to give it your undivided attention. It is all up to you, really.
  5. Last of all, you don’t have to put in a whole lot of effort into it as you would on active income. Doesn’t mean you ignore it totally. Usually, you just need to keep an eye on it and act at the right time to maintain it, which is quite simple and comfortable.


Now that you know its benefits, can’t wait to try your hand at generating some passive income? If that’s the case, we have even more information for you.




  1. Selling information products such as courses on Udemy or Coursera, e-book, audiobooks, etc. You just need to put the information out there and hang back while the money flows in.
  2. Affiliate marketing – Affiliate Marketing needs a whole lot of explanation but for the sake of the article, let us keep it short. Basically, you promote a third-party product by including a link to the product on your website or social media account. The more the number of people who visit the link, the more money you get.
  3. Multi-level Marketing – MLM  or Direct Selling is one of the easiest and popular ways of generating passive income. Here, you choose a company you trust and sell one of their products or services that you love. You will be able to make money through direct selling as well as by recruiting more people to sell the products.  Read More: MLM Software
  4. Rental income – you can invest in rental properties, maybe rent out your room and earn money from the rent paid. This is fairly straightforward but if you don’t take the time to learn how to make this profitable, you may lose your investment and then some.
  5. Savings accounts – passive income doesn’t get easier than this and it is almost impossible to lose your money if you choose your financial institution correctly. Just put some money in your savings account. Then sit back and watch the interest grow.


While all of this information is legit and can help you get started with your source of passive income, everything comes with its own risk. Be mindful of that, research well and invest smartly whatever it may be.

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