In simple terms, residual income or passive income is one that you continue to receive even after completion of your income-generating work.
To define residual income in simpler terms: let us consider an example.
You have some dollars left and you decide to invest them into dividend-paying stocks. The money that you will be receiving until you have the stocks in lieu of your investment, will be your passive income. Examples of residual or passive income include: royalties, rental income, interest, dividend income, or income you receive from sale of consumer goods. This is how you understand and define residual income.
Well, if the idea of making passive income sounds good to you, and you are craving to know about different ways to accumulate passive income, check out the four best ways to make passive income.
We will first start with what we have mentioned in the above example – investing in dividend-paying stocks.
4 Ways to make passive income
Invest in dividend-paying stocks
If you have some money, a better idea is to invest it in dividend-paying stocks. Why? Because when you invest in dividend-paying stocks, you get dividends on monthly, quarterly, bi-annually, or yearly dividends, making it a good source of passive income.
Apart from that, dividend-paying stocks keep the regular cash flow active, while offering capital appreciation as well. Keep your cash flow stable, while enjoying capital appreciation simultaneously.
Real Estate Investment
Investing in real estate is always an intelligent move because everyone knows, the value of real estate only appreciates. There are two major benefits for you as an investor. First, once you invest in real estate, you can rent it out, and collect monthly payments. It will not only bring in extra income for your household, but these monthly payments can also be used to pay off mortgage.
Moreover, the second most important advantage you will have is, while you enjoy stable residual income, you get profit. Apart from these two, once you pay off your full mortgage, you have two choices: either rent the property and keep receiving the rent, or sell the property to get a wholesome amount.
Sell online courses
E-commerce has become a huge market. You can sell anything on the internet these days. If you want to make residual income, without breaking your back, then, you should develop online courses and sell them online. It’s a great idea.
If you are a good teacher and can explain the concepts clearly, you are at an advantage. All you have to do is: develop a course, record it with a good camera, and upload the course on different sites such as Udemy, Coursera, etc.
Moreover, if you want to go overboard, you can also create your website and upload the course there. Using digital marketing tools, you can attract many aspirant visitors who would want to enroll in your course. This is your opportunity to turn the visitors into your customers. Continue with this practice, it will pay you dividends in the long run. It’s another good idea to earn passive income for yourself.
Put your money into buying Royalties
You must have heard about actors getting royalties for the shows or movies they did years back. However, did you know that you can also buy royalties and enjoy passive income as the actors do? Well, if you are not aware of what investing in royalties means or how to invest in it, read further.
When you buy royalties, you invest in licensing arrangements. Here is what it means: there are many revenue-generating ventures, which include TV programs, videos, oil and gas, capital financing deals, music videos, etc. You invest into one or multiple ventures by paying the original investor immediate cash. In return, you receive the return on investment.
The process is similar to investing in a dividend-paying stock. The only difference is, you buy a share in stock, and you buy licensing in royalties. It’s another good option you can opt to generate your passive income. Once you feel you don’t need royalty of a particular venture anymore, you can resell it and make more money out of it.
If you are interested, then you can visit Royalty Exchange website and start investing in royalties. This website has already crossed 1000 transactions and generated a revenue of $84 million.
Making residual or passive income has become quite easy nowadays. Keep looking out for good investment opportunities. Once the opportunity comes, take advantage of it, and start earning your passive income. It will help you in the long run. Remember, a stitch in time saves nine.