The concept of Passive Income is no longer an alien to the Indian Population. People now know that the money they earn without putting much of their time and efforts into it, is their Passive income, and the most common passive income source that even a layman would understand is the Rental Income. Most of the common masses consider this as their Active income but that is not the case. The person is not putting any effort into earning that income other than the fact that he/she owns it and rents it as a once time activity. Now, those who understand that rental income is their Passive Income are now exploring other ways of earning more especially post COVID-19 as their rental income has been deeply affected putting more pressure of income on their profession which has also struggled to produce income in such times.
Even though there are many sources of Passive income in India, not all of them come with minimalistic efforts, in fact most of them require a certain set of skills and need a lot of time for it which makes it no less than an active income source. There still are many ways to earn Passive Income without putting too much of our time and efforts in it. They are :
- Income from Equity (Gains and Dividend) : Gain is the money received due to increase in the price of a stock and dividend are smart ways to make passive income. Dividend refers to any distribution of company’s earnings to shareholders from the stocks you bought. Few people might argue that it too requires a lot of research and study etc. to earn this type of income, which is true in most cases but not all. But there is a way to invest in stocks without constantly doing research for this. One may invest in Index funds for a long period of time to get good returns without doing that amount of research which would have been required otherwise.
- Interest Income: Interest Income is the amount paid to an entity for its money or funds. It can be earned on bonds and other debt funds. It can also be received on Fixed Deposits. Both Fixed Deposits and Debt funds are considered to be a safer asset class as compared to equity in terms of volatility. Interest income can be earned without having to learn a new skill or having a set-up to earn it, you just have to invest in the right place.
- Rental Income : This type of income is the most common source of Passive Income. Rental income can be obtained from both residential and commercial properties both having their own pros and cons. Income from residential property can be steady but long-term whereas income from a commercial property can be high but require high-maintenance charge and always has higher threat of the business getting a better deal or location.
- Gains from Metals like Gold : Gold is another great asset to invest your money in. This asset is an appropriate app for conditions like recession or any other economic crisis because of its several features such as having an inverse relationship with the market interest rate. It is considered one of the safest and high-yielding assets. One can invest in Gold by investing in Sovereign Gold Bonds, Gold ETFs and Other Gold funds. The interest income that comes from this asset is also one way to earn money without doing much.
Along with these above-mentioned sources of passive income, there are other sources like affiliate marketing, royalty income from a book that one published, online income from various platforms like YouTube, Instagram, etc. by making videos and other content, putting your photographs on social sites which might get picked up by media houses, creating online courses, etc. One thing that is highly noticeable in all of these mentioned Passive Income sources in India is that they are all based on some skill or set-up whereas the other four explained above simply require your money and the rest is the job of your money to earn for you.