13 Ways To Make Money While You're Sleeping
“If you don't find a way to make money while you sleep, you will work until you die.” -Warren Buffet
There are two types of income that people confide in:
Active income refers to income received from performing a service and includes wages, tips, salaries, commissions and income from businesses in which there is material participation.
⦁ You work for money
⦁ High effort to reward ratio
⦁ Lower hourly rate
⦁ Low upfront investment
Passive income is quite the opposite. Here a person creates an asset that works for them. There can be multiple assets that will be discussed in detail. But you should know one thing - Money likes to stay with people who know how to multiply it!
⦁ Money works for you
⦁ Low effort to reward ratio
⦁ Higher hourly rate
⦁ High upfront investment
⦁ More time for self growth
Let's talk about the Active Income Mentality!
It is known that a person's energy and productivity reduces over a period of time. It is pretty common that not everyone understands the concept of making money work for them and not the other way around.
Liability is something that takes money out of your pocket. An Asset on the other hand is something that puts money in your pocket.
Spending more on Liabilities than Assets for momentary pleasures or benefits will affect a person’s savings in a negative way. If you want to be rich, remember that you cannot buy something if you can't afford to buy it twice.
I would like to show you how you can make money work for you and the power of compounding!
Power Of Passive Income:
You can become rich or broke depending on how you handle your money. Money spent on liabilities will depreciate in value with time. Whereas, money invested on assets will appreciate in value with time.
It is key to know the difference between money spent and money invested.
A luxury car bought is a liability which will take money out of your pocket month on month and also reduce in value with time. Whereas, a property bought and rented will be an asset which will put money in your pocket and increase in value with time.
Power Of Compounding:
“Compound Interest is the eight wonder of the world. He who understands it,earns it...he who doesn't...pays it.”
10 Lakhs invested for 10 years at the rate of 20% along with 10,000 per month will yield you 1.11 Crore. That is the power of compounding!!!!
Different Sources Of Passive Income:
Real Estate: An essential asset that increases in value with time.
Rental Income: Income from renting out properties.
Stocks, Bond and Funds: Assets that increase in value with time as good companies show great performance.
Stock Dividends: A sum of money paid regularly (typically annually) by a company to its shareholders out of its profits.
Social Media (Youtube,Instagram,Blogs etc): Regular payments through advertisements based on the reach of the population.
Fixed Deposits: Banks pay 6-8% on your capital kept with them annually.
Rent Out Vehicles: Unused vehicles can be rented out as a source of passive income.
Education Videos: This field has a large scope. If you possess a good skill, it can be sold to people who are willing to learn it.
eBooks: Write a book, Sell the book!
Buy and Sell products online: Buy products in bulk for cheaper rates and sell it on various internet platforms at a marginal profit.
Invest in Business as a sleeping partner: Have capital to deploy? Find out good businesses with good management and become a silent investor.
Develop an Application: Mobile apps are a HUGE hit if you can find the perfect idea.
Build Online Courses and Guides
I hope this article gives you some ideas and ignites a spark in you to make the money work for you. There are numerous other methods of increasing your passive incomes. Please feel free to share your thoughts or methods to increase cash flow!
The Only Difference Between A Rich Person And A Poor Person Is How They Use Their Time And Money!
Article by: Aditya Mundada, a research analyst and finance enthusiast.
Check out his instagram profile for daily stock trading updates and hit him up for finance tips!
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